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 ₹411/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 ₹411/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

Term insurance articles

Recent Articles
Popular Articles
Term plan vs. Investment Plan: What to Know

29 Sep 2021

Investment, insurance, and saving for emergencies are the three...
Tax Benefits and Refund Details About Term Insurance

29 Sep 2021

Term Insurance is one of the best ways to cover your family...
Short Term vs. Long Term Disability Insurance: Everything to Know

29 Sep 2021

People are more likely to insure valuable assets such as cars...
Regular Term Plan or Return of Premium? What to Choose?

22 Sep 2021

Term insurance policy is one of the purest forms of policies...
Is Your Term Insurance Valid If You Move Abroad?

20 Sep 2021

Term insurance is the most effective way of providing security...
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...
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...
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...
Term Insurance for NRI in India
Term insurance offers financial protection to the family of the insured in case of demise. Every bread-earner...
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...
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL