The Government's GST Reforms 2.0, effective from 22nd September 2025, removed GST on individual life and health insurance policies- reducing it from 18% to 0%. This directly lowers the overall cost of term insurance.

Worked example: If a policyholder was previously paying ₹10,000 annually (₹8,474.60 as base premium + ₹1,525.40 as GST), the same plan now effectively costs ₹8,474.60 since the GST component is fully removed.

This reform is expected to encourage higher insurance penetration across India, particularly benefiting young earners and middle-income families for whom every rupee of premium affordability matters.

Here is how you can determine the right term life insurance cover amount to get enough cover for your family:

Choosing the good term insurance plan means aligning the type of policy to your life stage, risk profile, and financial goals. Let’s discuss the main types of term insurance plans available for you in detail:

Basic Term Insurance Plan

A standard term insurance plan is a pure life insurance product that provides a high sum assured at an affordable premium. If the policyholder passes away during the policy term, the nominee receives the death benefit, helping them manage expenses, repay debts, and achieve future financial goals. However, unlike savings-oriented insurance plans, it does not offer any maturity benefit if the policyholder survives the term. Standard term insurance is ideal for individuals seeking maximum financial protection for their family at a relatively low cost.

Term Insurance with Monthly Income

A Term Insurance Plan with Monthly Income provides financial support to the nominee through regular monthly payouts after the policyholder's death. Instead of receiving the entire benefit as a lump sum, the family gets a steady income that can help manage daily living expenses and long-term financial commitments. Some plans also offer a combination of a lump-sum payment and monthly income. This option is suitable for families that rely on a regular source of income.

Term Insurance with Increasing Monthly Income

This type of term plan provides a monthly income benefit that increases at a predefined rate every year. The growing income helps the nominee cope with inflation and rising living costs over time. By ensuring that the monthly payout increases gradually, the plan offers stronger long-term financial security. It is particularly useful for families with young dependents whose future expenses are likely to increase.

Term Return of Premium

A Term Insurance with Return of Premium (TROP) plan provides life cover to financially protect your family in case of your untimely death during the policy term. Unlike a regular term plan, it returns all the premiums paid (excluding taxes and applicable charges) if you survive the policy term. This makes it suitable for individuals who want both life protection and a maturity benefit. Some plans also offer the option to increase the sum assured during major life milestones such as marriage, childbirth, or home purchase.

Group Term Insurance

Group Term Insurance provides life coverage to a group of individuals under a single policy, such as employees of a company or members of an organization. Employers often offer this coverage as part of their employee benefits package, making it a cost-effective form of insurance. While it provides basic financial protection, the coverage amount may not be sufficient to meet all future financial needs of a family. Therefore, individuals are often advised to supplement it with a personal term insurance plan.

Level Premium Term Insurance Plan

A Level Premium Term Insurance Plan offers a fixed sum assured and a constant premium throughout the policy term. This means the coverage amount and premium payments remain unchanged regardless of age or changes in health after policy issuance. The predictability of premiums makes budgeting easier and eliminates the risk of rising insurance costs over time. It is one of the most widely preferred term insurance options due to its simplicity and stability.

Yearly Renewable Term Insurance

Yearly Renewable Term Insurance, also known as Annual Renewable Term (ART) Insurance, provides coverage for one year at a time and can be renewed annually. While the death benefit generally remains unchanged, the premium increases with age at each renewal. This plan offers flexibility and requires only a short-term commitment, making it suitable for individuals who need temporary coverage. However, it may become expensive in the long run compared to a long-term level premium plan.

Decreasing Term Insurance Plan

A Decreasing Term Insurance Plan features a sum assured that gradually reduces over the policy term, while the premium usually remains fixed. It is commonly used to cover financial liabilities that decrease over time, such as home loans, education loans, or other long-term debts. Since the insurer's risk reduces as the coverage amount declines, premiums are generally lower than those of a standard term insurance plan. This makes it an affordable solution for individuals looking to protect their outstanding liabilities.

Increasing Term Insurance Plan

An Increasing Term Insurance Plan offers a sum assured that rises periodically during the policy tenure. The increasing coverage helps offset the impact of inflation and accommodates growing financial responsibilities over time. While premiums are typically higher than those of a basic term plan, the additional protection can be valuable for individuals expecting future increases in income, family expenses, or liabilities. It is particularly suitable for young professionals and growing families.

Convertible Term Insurance Plan

A Convertible Term Insurance Plan allows the policyholder to convert the term policy into a permanent life insurance plan at a later stage, subject to the insurer's terms and conditions. In many cases, this conversion can be done without undergoing fresh medical examinations. The plan offers flexibility to individuals who may be unsure about their long-term insurance needs at the time of purchase. It enables them to start with affordable coverage and upgrade their protection in the future if required.

Joint Life Term Insurance Plan

A Joint Life Term Insurance Plan covers two individuals, usually spouses, under a single policy. It provides financial protection to the family while often being more cost-effective than purchasing two separate policies. Depending on the policy structure, the benefit may be paid upon the first death, or the surviving spouse may continue to remain covered. This type of plan is suitable for couples who share financial responsibilities and want comprehensive protection for their family's future.