Term insurance,explained simply.

Term insurance is the simplest and purest kind of life insurance. You choose an amount of cover — say ₹1 crore — and a number of years — say until you turn 60. You pay a small premium every year. If you pass away at any point during those years, the insurer pays the full ₹1 crore to the person you have named, usually your spouse or children.

If you are still alive when the policy ends, nothing is paid. That can feel like money wasted, but think of it like a helmet: you are glad you wore it even on the days you did not fall. The low cost is what lets you buy a cover large enough to truly replace your income.

Term insurance replaces your income for your family. It is not meant to grow your money — keep savings and investments separate.

Premiums are fixed on the day you buy and do not rise as you get older. That is why buying early, while you are young and healthy, locks in the lowest price for the whole term.

If anyone depends on your income — or would be left with your debts — you need term insurance.

• You are married, or plan to be
• You have children, or parents who depend on you
• You have a home loan, car loan or other borrowing
• Your family’s lifestyle relies on your monthly salary or business income
• You run a business and partners or family would struggle without you

If you are single with no dependants and no loans, you may not need it yet — but buying early keeps the premium low for life.

A good starting point is 10 to 15 times your yearly income. Then add any loans you would not want your family to repay, and subtract savings they could use.

Choose a term that lasts until your responsibilities are done — usually until you retire, your children are independent and your loans are repaid. For most people that means cover until age 60 or 65.

Cover beyond 70 or up to 100 is available but costs much more. Only consider it if you specifically want to leave money behind for your family.

• 01

  Level cover

  How the cover works

  The same amount for the whole term

  Cost

  Lowest

  Good for

  Most families — simple and clear

• 02

  Increasing cover

  How the cover works

  Cover rises by 5–10% a year

  Cost

  Higher

  Good for

  Keeping up with rising living costs

• 03

  Return of premium

  How the cover works

  Premiums refunded if you survive the term

  Cost

  About 2× level cover

  Good for

  Those who dislike getting nothing back

• 04

  Reducing cover (loan)

  How the cover works

  Cover falls as your loan is repaid

  Cost

  Lower

  Good for

  Protecting a home or business loan

Return-of-premium plans sound attractive, but the extra premium invested on your own usually grows to far more than the refund.

Add-ons (insurers call them “riders”) widen your protection for a small extra premium.

• 01

  Accidental death

  An extra amount is paid if death is due to an accident.

• 02

  Critical illness

  A lump sum if you are diagnosed with a serious illness such as cancer, heart attack or stroke — even though you survive.

• 03

  Premium waiver

  If you become disabled or seriously ill, future premiums are cancelled but the cover continues.

• 04

  Disability

  A payout or income if an accident leaves you permanently unable to work.

• Suicide in the first 12 months — the family receives at least 80% of premiums paid, not the full cover
• Death linked to health facts you hid when buying, such as smoking or an existing illness
• Deaths from activities you did not disclose, such as adventure sports, if the policy excludes them
• Lapsed policies — if premiums are not paid within the grace period, cover stops

The single most important thing is honesty in your application. Most rejected claims trace back to something that was not disclosed.

1. 1

   Decide your cover amount and term first — the rest follows

2. 2

   Compare insurers on how reliably they pay claims, not just on price

3. 3

   Disclose your health, habits and income fully and truthfully

4. 4

   Complete the medical tests — they make your claim stronger

5. 5

   Name your nominee and tell them the policy exists

Insurers publish a “claim settlement ratio” — the share of claims they paid in a year. Look for a company that pays 97% or more of claims, consistently, over several years.

• 01

  Premiums you pay

  Can reduce your taxable income by up to ₹1.5 lakh a year under Section 80C, if you use the old tax regime.

• 02

  Money your family receives

  The payout on death is fully tax-free for your family.

1. 1

   Inform the insurer as soon as possible — online, by phone or at a branch

2. 2

   Submit the claim form, death certificate, policy copy, nominee ID and bank details

3. 3

   The insurer reviews the claim and may ask for medical or police records

4. 4

   The money is paid to the nominee’s bank account — usually within 30 days of all papers

We stand beside families through every step of a claim — collecting documents, following up and speaking to the insurer — so they do not have to do it alone at a difficult time.