What Is Insurance?
Insurance is a financial arrangement where a person pays a fixed amount called a premium to an insurance company. In return, the insurer provides financial protection against unexpected events such as death, illness, accident, or loss.
In India, insurance helps individuals and families:
- Manage financial risks
- Protect dependents
- Secure long-term financial stability
- Handle emergencies without exhausting savings
What Is Life Insurance Term Plan?
A Life Insurance Term Plan is the simplest and most affordable form of life insurance. It provides pure life cover for a fixed period (called the 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 amount is paid
Because it focuses only on protection and not investment, term insurance offers high coverage at low premium.
Importance of Term Insurance in Indian Context
Term insurance is especially important in India due to:
- Dependence on a single earning member in many families
- Rising costs of education, healthcare, and housing
- Increasing home loans and personal liabilities
- Limited government-backed social security
A term plan ensures your family can maintain their lifestyle and meet financial goals even in your absence.
How Many Insurance Companies Offer Term Insurance in India?
As per the Insurance Regulatory and Development Authority of India (IRDAI):
- 24 Life Insurance Companies operate in India
- 1 Public sector insurer – Life Insurance Corporation of India (LIC)
- 23 Private life insurance companies
All these insurers offer multiple term insurance plans with options such as:
- Level cover
- Increasing cover
- Decreasing cover
- Return of premium plans
- Optional riders
Key Features of Life Insurance Term Plans
- High life cover at affordable premium
- Flexible policy tenure
- Choice of payout options (lump sum or monthly income)
- Riders like accidental death and critical illness
- Easy online purchase
- Minimal documentation
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 maximum limit on exemption
3. Additional Deduction – Section 80D
- If health or critical illness riders are included, additional tax benefits may be available
Who Should Buy a Term Insurance Plan?
- Salaried employees
- Business owners and professionals
- Parents with dependent children
- Individuals with home or personal loans
- NRIs with financial dependents in India
How Much Term Insurance Cover Is Ideal?
A general rule:
10 to 15 times your annual income
However, the exact cover should be based on:
- Existing loans and liabilities
- Family’s monthly expenses
- Children’s education needs
- Long-term financial goals
Why Choose Saving Mantra for Term Insurance?
Saving Mantra helps you:
- Compare term plans from multiple insurers
- Select the right coverage and policy term
- Maximize tax benefits
- Avoid policy mis-selling
- Get expert assistance during claims
Conclusion
A life insurance term plan is the foundation of financial protection in India. It is affordable, easy to understand, and ensures your loved ones are financially secure even when you are not around. Buying early helps lock lower premiums and long-term peace of mind.
Disclaimer
This blog is for informational purposes only and does not constitute insurance advice. Policy features, benefits, premiums, and tax provisions are subject to change as per insurer terms and applicable laws. Saving Mantra recommends reading policy documents carefully or consulting a qualified advisor before making a purchase.