What Is Term Insurance?

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Term insurance is a life insurance product that provides financial protection to your family in case of an untimely death. It is an affordable way to secure your family’s future financial needs. In a term plan, you pay a fixed premium for a specific period, and in case of your unfortunate demise during the policy term, your nominee receives the sum assured. Here are some of the key features of term insurance:

Features of Term Insurance Description
Affordability Term insurance policies are affordable, with premiums much lower than other life insurance policies.
Age of Entry You can get term plans early in life, with the minimum eligibility age of 18 years.
Policy Term Term insurance provides coverage for a specified number of years, known as the policy term.
Maturity Benefit Term insurance does not offer any return on the premium you pay in the fortunate event that you survive the policy tenure.
Flexibility in Premium Payments You can pay your term plan premiums as per your convenience, with regular or one-time, lump sum premium payments.
Life Cover Term plans provide life cover of your choice at affordable premiums, with the payout helping your family avoid compromising with the lifestyle you want for them in your absence.
Additional Add-ons You can add riders or add-on benefits to your term insurance policy to extend the scope of your base coverage at a nominal cost.

Calculating your Human Life Value (HLV) can help you determine how much life insurance cover you need. HLV is an easy-to-use numeric method of calculating the amount of Life Cover^ that you may need. The basic thumb rule that can be used to find out your HLV is as follows:

HLV = Annual Income x Number of Working Years Left

For example, if a 32-year-old man has an annual income of 5 lakh, the ideal Life Cover^ for him would be 25 x 5 lakh = 1.25 crore.

Use our free online calculator to help you determine how much life insurance cover you need to keep you and your family secure.

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