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Term insurance
A big cover for a small premium, bought while you are young.
Term insurance does one job. If you die during the policy term, your family gets a lump sum to replace the income they lost. No savings, no maturity cheque, no bonus. That is why ₹1 crore of cover can cost less than a weekend trip each year.
Who needs it
If someone depends on your salary, you need a term plan
The question is simple: if your income stopped tomorrow, who would struggle? A spouse who runs the home, children in school, parents you send money to, a home still being paid off.
- Just married, or a first child on the way
- Paying monthly instalments on a house or car
- Supporting parents who have no pension
- Running a business where your family has signed as guarantor
Who can skip it: a single person with no dependants and no debts, or someone whose investments already cover the family's needs for life. For everyone else, it comes before any SIP.
Cover amount
Two ways to arrive at the number
We work it out both ways and go with the higher figure. Below is one family, Ravi, 32, earning ₹12 lakh a year, worked through each method.
Method 1: rule of thumb
Income x years left to work
Multiply yearly income by the years until retirement, then trim for the fact that part of that income would have gone on your own expenses.
- Yearly income
- ₹12,00,000
- Multiple used
- 15x
- Cover from this method
- ₹1.8 crore
Quick, but it ignores debts and goals. Many people under 35 use 15x to 20x.
Method 2: needs based
Add up what the family will need
| Need | Working | Amount |
|---|---|---|
| Household expenses | ₹50,000 a month for 20 years, in today's money | ₹1,20,00,000 |
| Debts still due | Balance left on the house | ₹35,00,000 |
| Children's education | Two children, college costs in today's money | ₹30,00,000 |
| Less: what you already have | Savings, funds, existing cover | - ₹15,00,000 |
| Cover needed | ₹1,70,00,000 | |
Rounded up, Ravi would look at ₹2 crore of cover. Expenses are kept in today's money; we add an inflation cushion in your actual plan. Try the human life value calculator for your own numbers.
Riders
Add-ons worth a look, and when to skip them
A rider is extra cover bolted onto the base plan for a small added premium. Add only what fills a real gap. A long list of riders makes the plan costly and the claim harder to follow.
Already have a separate critical illness or personal accident policy? Then the matching rider is usually not needed.
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Often worth it
Accidental death benefit
Pays an extra sum if death is due to an accident. Useful if you drive a lot or travel for work.
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Compare with a standalone plan
Critical illness
Pays a lump sum on diagnosis of listed illnesses such as cancer or a heart attack, while you are alive.
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Often worth it
Waiver of premium
If you become permanently disabled or seriously ill, future premiums are waived and the cover stays on.
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Depends on your job
Accidental disability
Pays out if an accident leaves you unable to work, fully or partly. Check how disability is defined.
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Usually skip
Return of premium
Gives back premiums if you survive the term, but the plan can cost two to three times more.
Before you sign
Five choices that decide whether the plan works
The premium gets all the attention. These decide whether your family is actually paid.
Disclose everything
Smoking, alcohol, past surgery, a parent's heart condition. A hidden fact is the most common reason a claim is questioned.
Cover till you stop earning
Choose a term that ends around 60 to 65, when the children are settled and debts are cleared. Cover till 85 or 99 adds cost for little use.
Pick the payout style
Lump sum, monthly income, or a mix. A spouse new to managing money may be better served by part lump sum, part monthly income.
Name the nominee properly
Full name, relation and share. Married men can write the policy under the Married Women's Property Act so the money stays with the wife and children.
Tell the family
Keep the policy number and insurer's claim contact where your spouse can find them. An unknown policy pays no one.
Claim settlement
What the family will need on the day
Most insurers settle complete death claims within 30 days of receiving all papers. Delays almost always come from a missing document.
Documents
- Claim form, signed by the nominee
- Death certificate from the local authority
- Original policy document, or a copy
- Nominee's ID, address proof and PAN
- Cancelled cheque or bank statement of the nominee
Extra, depending on the case
- Hospital discharge summary and treatment records, for illness
- FIR and post-mortem report, for an accident
- Legal heir papers if no nominee was named
Free quote
Get term plan quotes from partner insurers
Send four details. We come back on WhatsApp with a suggested cover amount and quotes from several insurers, side by side, with the claim terms that matter.
- No charge for the comparison
- We explain the medical test, if one is needed
- Help at claim time, for as long as the policy runs
Questions
What people ask before buying
Is term insurance money wasted if nothing happens to me?
No more than home insurance is wasted when the house does not burn down. You paid a small premium so your family was protected for those years. The money you saved by not buying a costly savings plan can go into a SIP.
Should I buy one big policy or two smaller ones?
One policy is simpler. Some people split cover, for example ₹1 crore till 60 and ₹1 crore till 70, so cover drops when the children are settled. We show both options with premiums.
Is the cover from my employer enough?
Group cover from work is usually 2 to 5 times salary and ends when you leave the job. Treat it as a bonus, not your main cover.
Will I need a medical test?
For larger covers and for buyers over 40, insurers usually ask for a medical check, often at home. The insurer pays for it. A clean test also protects the claim later.
Is the claim amount taxed?
The death benefit paid to the nominee is generally tax-free under Section 10(10D) (rules as of 2026, check current rules).
Related
Cover the rest of the picture
Insurance is the subject matter of solicitation. Premium figures on this page are illustrative and not an offer from any insurer.