Term insurance is a pure protection life insurance plan that pays a lump-sum benefit to your family if you pass away during the policy term. Unlike investment-linked policies, a term plan does not build any cash or maturity value; nearly the entire premium goes towards covering risk. That is precisely why a term insurance plan in India can offer a very high life cover for a comparatively small premium. If you outlive the policy term, there is no payout, except under a Return of Premium variant, which is covered separately below.
For most Indian households, term insurance is the most efficient way to protect a family's financial future. If the primary earner is no longer around, the payout can replace years of lost income, keep a child's education on track, help clear a home loan or business debt, and let the family maintain its standard of living without disruption. Financial planners typically recommend a cover of 10 to 15 times your annual income, a level that is very difficult to achieve affordably through any other type of life insurance.
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Because a term plan carries no investment component, insurers can offer a high sum assured, often 1 crore or more, for a modest premium. As an example, a healthy 30-year-old non-smoker can typically get 1 crore of life cover for around ₹700 to ₹900 a month, making term insurance one of the most cost-efficient ways to protect a family's income. Actual premiums vary by insurer, health, and lifestyle, so figures here are indicative.
You can choose a policy term that matches your financial responsibilities, commonly anywhere from 10 years up to age 75 or 80, so your cover stays active through your working years, your children's education, and any outstanding loans.
Premiums paid towards a term insurance plan are eligible for deduction under Section 80C of the Income Tax Act, and the death benefit paid to your nominee is generally tax-free under Section 10(10D), subject to the applicable conditions.
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Choose the plan design that aligns with your life stage and long-term milestones
The most common and affordable option: the sum assured stays fixed for the entire policy term, and the premium also remains level throughout, making budgeting simple.
The sum assured rises at set intervals, helping your cover keep pace with a growing income, a growing family, or the rising cost of living, usually at a slightly higher starting premium.
Designed for people who want their premiums back if they outlive the policy term, every rupee of premium paid is returned at maturity, though this comes at a noticeably higher cost than a level term plan. See our dedicated Return of Premium Term Insurance page for full details.
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Pays an additional lump sum on diagnosis of a covered critical illness such as cancer, heart attack, or kidney failure, helping meet treatment costs without dipping into savings.
Adds an extra payout on top of the base sum assured if death occurs due to an accident, offering enhanced protection for policyholders with higher-risk occupations or long daily commutes.
If you are diagnosed with a serious illness or permanent disability that affects your income, this rider waives all future premiums while keeping your cover fully active.
Follow these six essential criteria before selecting your insurer and policy
Match your cover to 10-15 times your annual income, plus any outstanding loans.
Choose a policy term that runs at least until your planned retirement age (60-70).
Compare the claim settlement ratio of insurers before deciding; a higher ratio means claims are honoured more consistently.
Compare premiums for the same sum assured and term across multiple insurers rather than buying the first quote you see.
Add riders based on your personal risk profile, occupation, health history, and family medical history; all matter.
Disclose your health and lifestyle honestly at the time of purchase; non-disclosure is the most common reason claims are rejected.
Most insurers accept applicants between 18 and 65 years of age, including Indian residents and eligible NRIs (subject to country-specific conditions).
Identity proof, Aadhaar, PAN, passport, or voter ID
Address proof, utility bill, Aadhaar, or passport
Age proof, birth certificate, PAN, or passport
Income proof, salary slips, Form 16, or ITR for the last 2-3 years
Medical reports, required for higher sum assured or based on age and health declaration
A clear, reliable four-step roadmap to ensure your family receives timely assistance
Step 1: The nominee informs the insurer of the policyholder's death as soon as possible.
Step 2: The nominee submits the claim form along with the death certificate, original policy document, and ID proof.
Step 3: The insurer verifies the documents and, if needed, requests additional information.
Step 4: On approval, the claim amount is paid directly into the nominee's bank account.
Excel India IMF's team assists nominees through every step of this process, from paperwork to insurer follow-up, at no extra cost.
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Excel India IMF has been guiding Indian families and businesses on insurance and investments for 33 years. Our advisors are IRDAI-licensed, and we compare plans across leading insurers so you get unbiased, suitable advice rather than a single company's product. Every client gets a dedicated relationship manager, free research advisory, and hands-on support at claim time, not just at the point of sale.
Answers to common queries regarding term insurance coverage, medicals, and claims
Talk to an IRDAI-licensed advisor and compare term insurance plans from top insurers, tailored to your age, income, and health profile, at no cost and with no obligation.