Term Life Insurance Basics
Term life is the cheapest, purest form of life insurance. Around ₹500/month buys ₹1cr of cover. No investment component. No maturity benefit. Pure protection.
What Is Term Life?
You pay premium. If you die during the policy term, your family gets the sum assured. If you survive, you get nothing. The premium is the cost of protection.
Example: ₹1cr term life, 30-year term, age 35. Premium: ₹400/month. Death in year 10: family gets ₹1cr. Survival: ₹0 back—the ₹1.44L in total premiums was the cost of protection.
Why Term Life?
- Cheapest: ₹400/month vs ₹2k/month for endowment at the same ₹1cr cover
- Pure protection: no investment confusion. You're buying protection, not savings.
- High coverage: ₹1cr+ cover is affordable on a modest income
- Flexible: choose term (10–40 years) and sum assured (₹50L–₹5cr)
Who Needs Term Life?
Young professionals (25–40): premiums are lowest. Lock in low rates early.
Parents with dependents: kids' education and living expenses stay secured if you die.
Breadwinners with loans: home loan and car loan get cleared instead of passing to family.
Business owners: key person insurance protects business continuity.
Common Myths
"Term life is waste—you get nothing if you survive." Wrong. The premium is the cost of protection, like car insurance. You hope you never claim, but you're protected.
"Endowment is better—you get money back." Endowment costs 4–5× more. That extra premium invested in mutual funds would give 10–12% returns vs 5–6% from endowment.
That's the generic case for term life. What your own policy pays, excludes, and charges is in its wording—check what YOUR policy actually says.