What Is Insurance?
Insurance is a financial protection mechanism where an individual pays a small amount called premium to an insurance company. In return, the insurer provides financial compensation in case of unforeseen events such as death, accident, illness, or loss.
In India, insurance plays a vital role in:
- Family financial security
- Income replacement
- Risk management
- Long-term financial planning
What Is Life Insurance Term Plan?
A Term Life Insurance Plan is a pure protection policy. It provides a large life cover at an affordable premium for a fixed period (policy term).
If the policyholder dies during the policy term:
- The sum assured is paid to the nominee
If the policyholder survives the term:
- No maturity benefit is paid (unless return-of-premium plan is chosen)
Why Term Insurance Is Important in India
In the Indian context, term insurance is essential because:
- Many families depend on a single earning member
- Rising costs of education, healthcare, and housing
- Increasing home loans and personal liabilities
- Limited social security support
A term plan ensures your family can:
- Repay loans
- Maintain lifestyle
- Fund children’s education
- Manage daily expenses
How Many Insurance Companies Offer Term Insurance in India?
As per the Indian insurance ecosystem:
- 24 Life Insurance Companies are registered in India
- 1 Public sector insurer (LIC of India)
- 23 Private life insurance companies
All these insurers offer various term insurance plans with different features such as:
- Fixed cover
- Increasing cover
- Decreasing cover
- Return of premium
- Riders like accidental death and critical illness
Key Features of Term Insurance Plans
- High life cover at low premium
- Flexible policy term
- Multiple payout options (lump sum / monthly)
- Rider benefits available
- Online purchase with minimal paperwork
- Tax benefits under Income Tax Act
Tax Benefits of Term Insurance in India
1. Tax Deduction on Premium – Section 80C
- Premium paid is eligible for deduction up to ₹1.5 lakh per year
- Applicable for self, spouse, and children
2. Tax-Free Death Benefit – Section 10(10D)
- Death benefit received by nominee is completely tax-free
- No upper limit on exemption
3. Additional Deduction – Section 80D
- If health or critical illness rider is included, additional deduction may apply
Who Should Buy a Term Insurance Plan?
- Salaried professionals
- Business owners
- Self-employed individuals
- Parents with dependent children
- Home loan borrowers
- NRIs earning in India or abroad
How Much Term Insurance Cover Is Ideal?
A commonly recommended formula:
Life Cover = 10–15 times annual income
However, the right cover depends on:
- Current income
- Liabilities (loans, EMIs)
- Family expenses
- Future goals
Why Buy Term Insurance Through Saving Mantra?
Saving Mantra helps you:
- Compare plans across insurers
- Choose the right cover amount
- Optimize tax benefits
- Avoid mis-selling
- Get claim support assistance
Our experts ensure your policy fits your financial goals and family needs.
Conclusion
A life insurance term plan is the foundation of financial planning in India. It is affordable, simple, and provides strong protection to your loved ones. Buying early ensures lower premiums and long-term peace of mind.
Disclaimer
The information provided above is for educational and informational purposes only. Insurance benefits, tax provisions, and eligibility are subject to change as per applicable laws and insurer policy terms. Saving Mantra does not guarantee policy approval or claim settlement. Please read all policy documents carefully or consult a qualified insurance advisor before purchasing.