Advantages and Disadvantages of Term Insurance in India

Term insurance plan is one simple and purest form of the life insurance plan. The term plan is designed to provide the financial cover to the family members in case of the untimely death of the policyholder. The term insurance offers death protection by simply paying the specified premium sum for the specific policy term. The death benefit received by the nominee will help them to cover the financial needs in the coming times.

Read more
Get ₹1 Cr. Life Cover at just ₹449/month*
No medical checkup required
Save more with upto 10% discount
Covers COVID-19
Tax Benefit
Upto Rs. 46800
Life Cover Till Age
99 Years
8 Lakh+
Happy Customers
*Tax benefit is subject to changes in tax laws. *Standard T&C Apply
** Discount is offered by the insurance company as approved by IRDAI for the product under File & Use guidelines
Get ₹1 Cr. Life Cover at just ₹449/month*
No medical checkup required
Save more with upto 10% discount
Covers COVID-19
+91
View plans
Please wait. We Are Processing..
Get Updates on WhatsApp
By clicking on "View plans" you agree to our Privacy Policy and Terms of use

When it comes to buying the best term insurance plan, you must understand the product well.

In this article, we will discuss the advantages and disadvantages of the term insurance plan in India.

Advantages of Term Insurance Plan

The term insurance plans offer life coverage and security to the insured. Apart from these key advantages, some of the other key advantages of the term insurance plan are listed below:

    • Simple: The term insurance plans are one of the easiest products compared to other life insurance products such as the money-back plans, endowment plans, etc. The various other life insurance plans are an amalgamation of savings along with savings. On the other hand, with a term insurance plan, you need to pay the premium sum and obtain life coverage for the policy term chosen.
    • Flexibility: The term insurance plans offer a higher level of flexibility namely two aspects that are renewable and convertible. The insured can renew the term insurance plan without undergoing any medical examination. The insured can also covert the term plan into an endowment pan for the sum assured existing with the increased premium sum. It is easy to opt-out from the term plan wherein as soon as you stop paying the premium sum, the policy will cease and that leads to ending the policy. Unlike endowment plans, the insured need not worry about the pay-outs. The term plans offer a death benefit and have no component of savings.

  • Cost-effective: The term plans are one of the most sought after and cost-effective life insurance products. The insured can access huge life coverage at the pocket-friendly term insurance premium cost, which makes it a favoured option for everyone. The term insurance premium rate is six times less than the premium sum of the other life insurance products.
  • Tax Benefit: The term insurance plans offered by different life insurance companies offer a tax benefit to the insured. The term insurance premium is less and entitles for a tax benefit within Section 80C.

Note: The tax benefit is subject to change in the prevailing tax laws.

Disadvantages of Term Insurance Plan

When it comes to buying the term plan, the term insurance premium surely grabs the attention. However, everything has its advantages and disadvantages. We have discussed the advantages above, now let us understand the listed below disadvantages of a term insurance plan that will help you to make the informed decision:

    • The term plans are not meant for those who intend to save money for any specific needs such as higher education, retirement planning, marriage, and so forth.
    • The insurance plans are not designed to assist in terms of finances when the policyholders’ family is alive.
Best term Insurance Plans in India
  • Buying a term insurance plan does not mean that it will enable you to create wealth. Moreover, they are no profit plans as they do not provide any hedge against inflation.
  • The term insurance plan is designed in a way wherein the insured pays the specified sum only for the life coverage that implies that the plans are not designed to build the cash value. The term premium is paid by the policyholder to the insurance provider with the intent to pay a death benefit to the nominee in case the insured is no more. When the insured outlives the policy tenure, no benefit will be received.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Wrapping it Up

The term insurance plans are one of the ideal life insurance products available in the market. The prime intent of buying the term insurance plans is to provide coverage at those years when the insured has any financial liabilities.

The term plan is ideal for those who are looking forward to covering themselves and the family from any such financial responsibility such as education loans, home loans, and so much more.

While selecting the term insurance plan, do not rush, give time and choose the plan that fulfils the requirements. Besides, before making the final decision analyze the financial liabilities. Compare the expenses to the savings and you will understand where you might fall short. Select the term plan that fills the gap between the savings and expenses effectively that is not heavy on the pocket side.

Written By: PolicyBazaar
You May Also Like
  • Types of Deaths Covered & Not Covered by Term Life Insurance

    Types of Deaths Covered and Not Covered by Term Insurance When it comes to securing the future of your loved ones or doing proper financial planning, term insurance turns out to be one of the most popular options for...

    read more
  • Why Medical Test is Important in Term Insurance

    Why Medical Test is Important in Term Insurance ‘No medical tests required’, you will find this clause blatantly used as a catchy ads for a prospective buyer. But is it really worth buying a term insurance witho...

    read more
  • 10 Questions You Should Ask Before Buying Term Insurance

    10 Questions You Should Ask Before Buying Term Insurance There are various doubts faced by customers when it comes to buying a term insurance plan. They get unsure about how claim settlement would work in case they h...

    read more
  • Term Insurance for NRI in India

    Term Insurance for NRI in India Term insurance offers financial protection to the family of the insured in case of demise. Every bread-earner wishes to offer financial security to his/her family in some way. In addi...

    read more
  • 6 Reasons Why Term Insurance is a Must Buy

    6 Reasons Why Term Insurance is a Must Buy Life is short and one can never foretell what the future holds. To make sure that your family is financially secure even after you are gone, opt for a term insurance. A term...

    read more

Term insurance articles

Recent Articles
Popular Articles
Which are the 6 Factors That Affect the Term Insurance Premium in India?

13 Jan 2022

A term life insurance plan is the most common and popular option...
Read more
Disease and Disability-Coverage for Self-Employed

13 Jan 2022

As India is moving towards new economic encouragements, growth...
Read more
The Best Disability Insurance for Self-Employed Individuals

13 Jan 2022

When you are self-employed, you sometimes wear many hats at the...
Read more
Free Cover Limit in Group Term Insurance Policies – All You Need to Know

13 Jan 2022

Life insurance covers offered by insurance companies establish...
Read more
Term Insurance for Entrepreneurs

13 Jan 2022

A term Insurance Plan is designed for every sector, be it self-...
Read more
LIC Term Insurance 1 Crore
If you have a LIC term insurance 1 Crore handy, you can cherish all your happy moments as you have made a fine...
Read more
Types of Deaths Covered & Not Covered by Term Life Insurance
Types of Deaths Covered and Not Covered by Term Insurance When it comes to securing the future of your loved ones or...
Read more
Term Insurance for NRI in India
Term insurance offers financial protection to the family of the insured in case of demise. Every bread-earner...
Read more
10 Questions You Should Ask Before Buying Term Insurance
10 Questions You Should Ask Before Buying Term Insurance There are various doubts faced by customers when it comes...
Read more
Important Aspects of 5-year Term Life Insurance Plan
Intro: 5 Year term life insurance is the most cost-effective life insurance plan that one can consider for...
Read more
top
View Plans
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL