Term insurance is the purest form of life insurance. You pay a small annual premium. If you pass away during the policy term, your family receives a large lump sum — called the sum assured. If you survive the term, you get nothing back. And that is exactly why it is so affordable and so important.
Why not return-of-premium or ULIP plans?
Insurance agents push these because the commission is higher. But mixing insurance with investment always gives you the worst of both — inadequate coverage and poor returns. Buy pure term insurance for protection and invest separately for wealth creation.
How much cover do you need?
The rule of thumb: 10–15 times your annual income. If you earn ₹6 lakhs per year, aim for ₹60–90 lakhs of cover. A ₹1 crore term plan for a 30-year-old in good health typically costs ₹700–1,000/month — less than most OTT subscriptions combined.
Best term insurance plans in India
- LIC Tech Term — high claim settlement, government backing
- HDFC Life Click 2 Protect — flexible options, good digital experience
- ICICI Pru iProtect Smart — comprehensive features
- Max Life Smart Secure Plus — excellent claim settlement ratio
Term insurance is your financial safety net. The other essential safety net is your emergency fund. After both are in place: health insurance.