Question 1

What is term life insurance in India?

Accepted Answer

Term life insurance provides pure death benefit cover for a fixed policy term. If the life assured dies during the term, nominees receive the sum assured. Unlike endowment or ULIP plans, term plans have no maturity payout — they are the most affordable way to secure high life cover for your family.

Question 2

How much term insurance cover do I need?

Accepted Answer

A common rule is 10–15 times your annual income, adjusted for outstanding loans, children’s education goals, and dependent expenses. Use our comparison table to match sum assured across insurers once you have a target cover amount in mind.

Question 3

What is claim settlement ratio and why does it matter?

Accepted Answer

Claim settlement ratio (CSR) is the percentage of death claims an insurer paid in a given year, published by IRDAI. A higher CSR suggests smoother claim processing, but also review claim rejection reasons, disclosure norms, and policy wording before you buy.

Question 4

Is term insurance premium tax-deductible?

Accepted Answer

Yes. Premiums paid for term life insurance qualify for deduction under Section 80C of the Income Tax Act, up to the overall ₹1.5 lakh limit (along with ELSS, PPF, and other eligible instruments). Death benefits received by nominees are generally tax-exempt under Section 10(10D), subject to conditions.

Question 5

Should I buy term insurance online or through an agent?

Accepted Answer

Online term plans from IRDAI-regulated insurers are often cheaper due to lower distribution costs. Whether you buy online or offline, disclose health history and lifestyle habits accurately — non-disclosure can lead to claim rejection regardless of channel.

Question 6

Can I increase my sum assured after buying a term plan?

Accepted Answer

Some insurers offer life-stage increase options or allow top-up at renewal. Otherwise you may need a separate policy. Compare plans with adequate cover upfront rather than relying on future increases, especially if your health profile changes.

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