How Term Insurance Can Help with Estate Planning?

Estate planning is not just for the wealthy. It is a thoughtful process that ensures your hard-earned assets and responsibilities are managed according to your wishes after you are gone. One of the most powerful yet underappreciated tools in estate planning is term insurance. When used wisely, it can make the entire process smoother and financially easier for your loved ones. Let us understand how term insurance can support your estate planning goals in a simple and practical way.

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What Is Estate Planning?

Estate planning is the process of arranging for the transfer of your assets after your death. It includes will creation, naming guardians for your children, settling debts, paying taxes, and ensuring your family has financial stability. The goal is to reduce confusion, prevent legal hassles, and make sure your legacy is passed on as you intended.

Term Plans

₹1
Crore

Life Cover

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₹50
LAKH

Life Cover

@ Starting from ₹ 8/day⁺

₹75
LAKH

Life Cover

@ Starting from ₹ 12/day⁺

What Is Term Insurance?

Term insurance is a type of life insurance that provides coverage for a specific period, like 20, 30, 40 years, or till 99/100 years of age. If the policyholder passes away during this period, the insurer pays a fixed sum (called the death benefit) to the nominee. It is affordable, easy to buy, and offers high coverage at relatively low premiums.

How Term Insurance Helps in Estate Planning?

Provides Immediate Liquidity

When a person passes away, their family might need funds immediately for hospital bills, loans, or daily expenses. This type of life insurance ensures your loved ones get access to a lump sum payout quickly, without having to sell assets or go through complex legal processes.

Covers Outstanding Liabilities

If you have any outstanding loans, like a home loan, car loan, or personal loan, term insurance for home loan payout can cover these debts so that your family doesn’t inherit your financial burdens. This keeps your estate intact and ensures assets can be passed on without deductions.

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Ensures Smooth Asset Distribution

Having term insurance included in your will makes it easier for your heirs to receive what you have left behind. It helps avoid family disputes and gives clear direction on who gets what. You can learn about how to make a will in India by consulting your financial advisor.

Supports Minor Children and Dependents

If your children are still studying or depend on you financially, a term plan can be structured to ensure they continue receiving financial support. This can include funding for their education, marriage, or general well-being.

Minimises Tax Burden

The term insurance tax benefits on death are usually tax-free under Section 10(10D) of the Income Tax Act. This means your nominees receive the full amount, which can help cover other estate-related taxes or costs, depending on your situation.

Offers Peace of Mind

Estate planning can feel overwhelming. But knowing that your family will have the money they need, even in your absence, can bring tremendous peace of mind. Life insurance offers this financial reassurance at a cost-effective premium.

How to Include Term Insurance in Your Estate Plan?

Assess Your Financial Responsibilities: Assess your current debts, lifestyle needs of your family, and future expenses like education or marriage.
Choose an Adequate Coverage Amount: The sum assured should be enough to act as income replacement, pay off debts, and fulfil your family’s financial goals.
Update Your Nominee Details: Ensure that your policy has the right nominee mentioned to avoid legal complications.
Mention the Policy in Your Will: While insurance proceeds usually go directly to nominees, it's a good practice to also include the policy in your will for clarity.
Review Your Plan Regularly: Life changes, and so should your plan. Reassess your coverage when you have a new child, buy property, or take on more responsibilities.

Wrapping it Up!

Estate planning is a responsible and thoughtful step that protects your family's future. Term insurance plays a key role in this process by offering financial security, covering liabilities, and ensuring smooth asset transfer. It's simple, affordable, and effective.

If you're starting to think seriously about estate planning, consider speaking to an advisor or exploring options through trusted platforms like Policybazaar. You can compare term insurance plans that fit your needs and make estate planning less stressful for everyone involved.

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˜The insurers/plans mentioned are arranged in order of highest to lowest Sum Assured(SA) offered by Policybazaar’s insurer partners offering term insurance plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Rs. 400/month is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 400/month (Rs.13/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 230 is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 8/day is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 12/day is starting price for a 75 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 497/month is starting price for a 1.5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 487/month is starting price for a 2 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 626/month is starting price for a 3 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 905/month is starting price for a 5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,267/month is starting price for a 7 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

*The full refund of premium is available on availing the one-time option of refund of premium. Total premium paid for policy (paid for add-ons) will be the special exit value, payable on availing the one-time option of refund of premium if you wish to completely exit the policy.

+Rs. 447/month is starting price for a 1 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs.679/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 910/month is starting price for a 3 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,374/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,924month is starting price for a 7 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

Women

+Rs. 400/month is Starting price for a 1 crore term life insurance for an 18 year-old Female, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 461/month is the starting price for a 1 crore term life insurance for an 24 year-old female, non-smoker, with no pre-existing diseases, cover upto 54 years of age.

1,642/month is the starting price for a 1 crore term life insurance for an 44 year-old female, non-smoker, with no pre-existing diseases, cover upto 74 years of age.

Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited

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