What is a Term Plan?
A Term Plan provides a fixed life cover for a specified period (term). If the insured person dies during the policy period, the nominee receives the sum assured as a lump sum or in installments. If the policyholder survives the term, no benefits are paid.
For example, a 30-year-old individual can buy a ₹1 crore term cover for 30 years at just ₹10,000–15,000 per annum depending on health, lifestyle, and insurer.
Why Do You Need a Term Plan?
- Pay off home loans or liabilities
- Maintain children’s education & lifestyle
- Support elderly parents or dependents
- Cover daily expenses in your absence
- Provide peace of mind
- Common Mistakes to Avoid Underinsuring Yourself
- Your cover should be at least 15–20 times your annual income.
- Hiding Health or Lifestyle Details
- Always disclose smoking habits, illnesses, or medical history. Hiding facts may lead to claim rejection.
- Choosing Short Policy Term
- A term till at least age 60–65 is ideal to cover maximum risk period.
- Delaying Purchase
- Premiums are lower when you are young and healthy.
- Not Reviewing Policy
- Reassess your insurance needs as income, loans, and family needs grow
