Himanshu is a content marketer with 2 years of experience in the life insurance sector. His motto is to make life insurance topics simple and easy to understand yet one level deeper for our readers.
Anchita has over 6 years of experience in content marketing, insurance, and healthcare sectors. Her motto to make health and term insurance simple for our readers has proven to make insurance lingos simple and easy to understand by our readers.
Updated on Mar 18, 2025 7 min read
Term insurance is the most affordable form of life insurance that offers financial coverage to your family in case of your uncertain death during the policy tenure. Along with financial coverage, there are several other benefits of term insurance including low-cost premiums, long-term coverage, tax benefits, multiple payout options, and a lot more.
Let’s understand each of the benefits of a term insurance plan in detail:
The most common benefit of a term insurance plan is financial security for your loved ones. In case of your uncertain death during the policy tenure, your family will receive the sum assured chosen at the start of the policy. They can use the amount received to fulfill their financial responsibilities such as debt repayment, higher education, marriage, buying a home, etc. Buying a term life insurance plan is the first step to achieving financial freedom.
A term plan is the most economical life insurance plan as it provides high coverage at an affordable cost. You can get a 1 crore term insurance plan starting at monthly premiums of just Rs 600. The earlier you buy a term plan, the lower your premium amount and vice versa. The affordability of term insurance is one of its major benefits. Buying term insurance online is cheaper as compared to buying it offline. Moreover, you can compare various plans online and choose the one that best suits your needs. You can calculate your term insurance premiums using a term insurance calculator.
With a term insurance policy, you have the option to choose how you wish to pay your premiums. There are various premium payment modes available including yearly, half-yearly, quarterly, monthly, or a single premium. You can choose the mode of payment that best suits your requirements. There are multiple payment methods available including debit cards, credit cards, UPI, Bima ASBA, net banking, etc.
Term insurance provides you an option to choose additional riders with your term plan. These riders enhance the coverage of your term plan. Each rider benefit provides specific benefits and costs you an additional premium amount along with the base premium. For example, an accidental death benefit rider provides an additional sum assured to your family in case of your death due to an accident.
A term insurance policy offers tax benefits on the premiums paid and death benefits received in case of the policyholder’s uncertain death. The tax benefits are offered under Section 80 (C) and Section 10 (10D) of the Income Tax Act, 1961.
You can claim tax benefits on the premiums paid under Section 80 (C). The maximum amount you can claim is Rs 1.5 lakhs per financial year.
The death benefits paid under term insurance plans are completely tax-free under Section 10 (10D).
There are various death benefits payout options available including lumpsum, regular income, or a combination of lump sum and regular income. You can choose how your family will receive death benefits at the time of policy purchase. The payout option of an individual depends on their financial goals. A lump sum amount can help you meet known financial liabilities while regular income may help you meet your regular expenses.
A pure term plan does not offer any maturity benefits. But term insurance with return of premiums (TROP) pays all your premiums back in case the policyholder survives the policy tenure. The premiums returned do not include the GST amount, rider premiums, etc. The premiums paid for TROP plans are comparatively higher than pure term insurance plans. With a term insurance calculator, you can compare the premiums of various plans and decide which one is right for you.
Some term insurance plans come with an inbuilt terminal illness cover. In case you are diagnosed with any of the terminal illnesses mentioned in the policy brochure, terminal illness benefits are paid to the policyholder.
A term insurance policy provides income benefits to your loved ones in case of your uncertain death during the policy tenure. Your family will receive regular income if you opt for regular income as a death benefits payout. A regular income helps your family to meet their living expenses and other financial responsibilities.
Certain term plans offer protection for the whole life (99 years). These plans are also called whole life insurance plans. The premiums for whole life term insurance plans are usually higher than a term insurance plan with limited coverage.
Buying a term insurance plan early offers multiple benefits to the policyholders. Let’s understand these advantages in detail.
Let’s understand this with a simple premium table.
Policyholder’s Age | Monthly Premiums |
20 years | Rs 715 |
30 years | Rs 1174 |
40 years | Rs 2570 |
50 years | Rs 5090 |
As the policyholder’s age increases so are their term insurance premiums.
You can avail of the following riders with your term life insurance plan. You must choose the rider option that best suits your needs as each rider costs you an additional premium amount.
Life is very uncertain and certain things are not in our control. You should buy a term insurance plan as it ensures that your loved ones are financially protected even if something unfortunate happens to you. It is the best investment you can do for your loved ones. There are a lot of term insurance plans available in the market but you should choose a term plan that fits your budget and aligns with your financial goals.
The major benefit of a term insurance plan is financial security for your loved ones in your absence. Along with financial coverage, a term insurance plan offers multiple benefits to the policyholder. These benefits include affordable premiums, tax benefits, high sum assured, flexible policy tenure, choice of premium payment mode, and a lot more. You must choose a term insurance plan with the right sum assured to make sure that your family is financially covered in your absence.
If you are looking for the best term plan you can contact us at PolicyX.com. One of our insurance experts will understand your requirements and help you choose the right term life insurance plan. We offer No Spam, No Gimmicks, and Only Xpert Insurance Advice.
You can buy a term insurance plan as early as 18 years of age.
Term insurance offers a death benefit, tax benefit, affordable plans, return of premium, accidental death benefit, critical illness benefit, and much more.
Yes, investing in a term insurance plan is a good decision as it offers financial coverage to your loved ones in case of your death during the policy tenure.
You can claim a tax rebate of up to Rs 1.5 lakhs on term insurance premiums paid under Section 80 (C) and death benefits received are completely tax-free under Section 10 (10D) of the Income Tax Act, 1961.
A term life insurance plan allows you to choose additional riders to increase your plan coverage.
Maturity benefits are not included in the traditional term insurance plans. However, some policy types such as term insurance with return of premiums give back the paid premiums, upon the policyholder surviving the total policy terms.
To choose a good term insurance plan you must consider factors like your dependents, income, lifestyle, liabilities, CSR of the company, riders of the desired plan, and policy tenure offered.
4.6
Rated by 860 customers
Select Your Rating
Let us know about your experience or any feedback that might help us serve you better in future.
Himanshu is a seasoned content writer specializing in keeping readers engaged with the insurance industry, term and life insurance developments, etc. With an experience of 2 years in insurance and HR tech, Himanshu simplifies the insurance information and it is completely visible in his content pieces. He believes in making the content understandable to any common man.
Do you have any thoughts you’d like to share?