Term Insurance

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Term insurance is one of the most basic forms of life insurance which provides financial coverage to the nominee for a predefined policy term, in return for a fixed premium, in case of demise of the policyholder.

One of the key benefits is that it offers high coverage for a relatively low premium.

Highlights of Term Insurance Plans

Coverage for critical and terminal illnesses
Protection for accidental, total, and permanent disabilities
Monthly premium payment option
Insured up to age 100
COVID-19 related death coverage
Tax benefits under Section 80C

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Sahi Insurance

Confused about which is the most appropriate plan that suits your needs as per your life stage? Don’t worry! Our IRDAI certified advisors will guide you at every step.

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Term Insurance

Everything you Need to Know

Who Needs to Buy a Term Insurance Plan

Term life insurance is crucial for anyone with dependents, particularly those responsible for their family's finances. It's designed to offer financial security to your loved ones. In case of the policyholder’s unfortunate demise, the sum assured is paid to them, helping them manage finances during tough times. Choosing the right plan ensures your family is cared for even after you are gone.

Examples for more clarity:
Sanjeev needs to buy a term plan
31 years old Married Planning children in 2 years Have a home loan of ₹70 lakhs Retired parents
Nikita need not buy a term plan
29 years old Single No financial dependents Parents are doctors & financially independent
Salman need not buy a term Plan
33 years old Married No dependent parents Spouse is employed and financially independent No loans

What are the Main Aspects of a Term Insurance Policy

Death benefit

In case of the unfortunate demise of the insured, the family gets the sum insured as lump sum or instalments, or both, based on the chosen payout.

Policy term

It's the duration your policy covers ranging from 5 years to over 60 years.

Maturity benefit

Regular-term plans don't offer a maturity benefit; they provide a death or critical illness benefit. Some plans have Return of Premium options where premiums are refunded at maturity.

Entry Age

You can buy term insurance at 18 years, with coverage typically not extending beyond 65 years.

How Term Insurance Plans Work

In term insurance, you pay premiums for a set time period to get coverage. In case of your untimely demise, your nominee gets the death benefit. If you outlive the policy term, there are no benefits.


The policyholder needs to decide the following:

  • Coverage amount
  • Policy term
  • Premium paying term
  • Frequency of the premium payment
  • Benefits of the term insurance plan

Premium Payment

The policyholder has the option of paying a lump sum amount or periodic payments - monthly, quarterly, half yearly or annually.

Policy Term

Coverage begins as soon as the policy is active. In case of the policyholder’s unfortunate demise, the nominee receives the entire coverage and the policy is terminated.


If the policyholder survives the tenure, there will be no benefits and the policy will be terminated.

Key Features and Benefits of a Term Insurance Plan

High coverage at a low cost

Term plans offer a high sum insured for low premiums.

Safety for loans and liabilities

The sum insured helps pay off debts in case of the policyholder’s demise.

Add-on protection

Riders like critical illness, disability, and accidental death offer extra coverage.

Claims payout option

The policyholder can choose between lump sum or periodic payouts for the family.

Tax benefit

Premiums and rider premiums are tax-deductible under Section 80C. The sum assured is also tax-free.

Premium Waivers

Some plans waive premiums if the insured is permanently disabled after an accident.

Critical illness cover

There is a lump sum payout for diagnosed critical illnesses.

Premium paying mode

There is an option to choose the payment frequency - annually, half yearly, quarterly, or monthly.

Simple Steps and Assistance for Buying a Term Insurance Plan

At Paybima, buying a Life insurance plan is easy and you can opt for an advisor’s help anytime.

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Types of Term Insurance Plans Available in India

Level term plan

This is the most common term insurance in which a fixed sum assured is paid to the family in case of the policyholder’s demise during the tenure.

Increasing and decreasing term insurance plan

It can increase or decrease the coverage annually. A decreasing term insurance covers liabilities such as a loan, while increasing term insurance helps manage inflation.

Term return of premium plan

Premiums are refunded if the insured survives the policy tenure.

Single-life and joint-life term insurance plan

Both have same benefits; however, a single-life plan is for individuals while a joint-life plan is best suited for couples with children.

Term Insurance Plan – Inclusions

What is covered in a term insurance plan?

Depending on the cause of death or disability, the amount is paid to the nominee or policyholder respectively.

Natural Death

The complete sum assured is paid to the nominee.

Accidental Death

An additional sum assured is paid to the nominee.

Terminal Illness:

A part of the sum assured is paid to the policyholder for medical expenses.

Critical Illness

A lump sum amount is paid to the policyholder if it is covered in the plan.


A part of the sum assured is paid to the policyholder who is disabled post an accident or illness.

Term Insurance Plan – Exclusions

What is not covered in a term insurance plan?

Term insurance policies typically come with exclusions that limit coverage for certain events or circumstances. The specific exclusions can vary depending on the insurer and the policy's terms and conditions. However, some common exclusions are:


If the policyholder’s death occurs by suicide within a certain period of policy issuance (usually two years).

Death due to drug or alcohol abuse

If the policyholder dies due to any kind of substance abuse.

Criminal act

If the insured’s death occurs through any illegal/criminal activities.

Death from a pre-existing illness

A death that occurs due to a condition/illness that already existed before policy commencement.

How to Select the Best Term Insurance Plan

Selecting the best term life insurance plan in India is vital for you and your family’s future. That’s why one must consider several factors before choosing the right plan.

Buy early

Premiums are lower when bought early in your earning life.

Sum assured

Calculate the amount based on family income, liabilities, and expenses using a term insurance calculator.


Look for joint life (for spouse), whole life benefits (till age 99), and Return of Premium (ROP) options.

Tenure of the policy

Choose a tenure that matches your financial responsibilities.


Consider options like accidental death, critical illness coverage and premium waivers.

Payout options

Choose between lump sum or monthly payments or a combination of both.


Check for claim settlement ratio, customer care process and overall reputation.

How to Calculate the Term Plan Premium

How Does a Term Plan Premium Calculator Work?

The calculator asks for your basic information and the amount of life cover you want. It considers factors like your finances, dependents, lifestyle, and inflation cost to help you choose enough coverage for your family. You can also see premiums for different payment frequencies and customize the plan to fit your needs. The calculator quickly and accurately shows the premium amount you need to pay.

Cover amount

Choose enough to meet your family's financial needs in your absence, considering a 4-6% annual inflation.


Younger individuals generally have lower premiums due to lower health risks.


Some policies charge lower premiums for women than men.


Regular consumption of tobacco or alcohol may increase your premiums.

Policy tenure

Longer terms may have higher premiums but offer better benefits.

Payment tenure

You can choose between yearly, quarterly, monthly, or single payment tenure.

Payment frequency

Usually, monthly and quarterly payments are higher; annual and bi-annual are lower.

Term Insurance - Premium Calculator

The Earlier You Buy, Lesser the Premium

Consumes Tobacco

Term Plan of 1 Cr for a 25 years male starts at
₹575*/ mo

Price is calculated for salaried, annual income 10 Lacs & education is graduate and above. The premium can vary with premium paying tenure, frequency and adding riders

How to Claim a Term Insurance Policy

Follow this procedure to make claims seamless.

Step 1

Claim intimation
The first step involves reporting your claim. You can report your claims online, at the insurance company’s branches, Mahindra Paybima website, central office, etc., with the physical documents mentioned below to start the process.

Step 2

Claim processing
Once all documents are arranged, submit the same to the insurance company. The company’s special claim care team will assess your claim and inform you if any further documents need to be submitted. Post receiving all the necessary documents, the insurance company will process your claim request.

Step 3

Claim settlement
The insurance company will then verify the claim by reviewing the documents submitted. They may also conduct an investigation, if necessary. Once the claim is verified and approved, the insurance company will inform the nominee about the approval of the claim and the settlement amount. The settlement amount is generally paid to the nominee's bank account directly.

Term Insurance Plan Claim – How to Avoid Rejections

Here are some of the main reasons for claim rejection:

Non-disclosure or misrepresentation of information

The policyholder failed to disclose important information, such as a pre-existing medical condition or a dangerous hobby.

Lapsed policy

If the policyholder fails to pay their premiums on time, the policy will lapse and the insurance company may reject the claim.


If the policy specifically excludes certain causes of death, such as deaths resulting from drug use or extreme sports, the insurance company may reject the claim.

Unable to provide relevant documents

If nominee details are not provided or your claimant fails to provide relevant documents required at the time of claim, the claim might get delayed or rejected as per the company’s policy.

Suicide clause

If the insured takes their own life within a certain period of time after the policy is issued (usually two years), then the insurance company rejects the claim.

Guaranteed Claim Support

We will guide you from start till end in your ‘claim’ journey. Start your claim process with us to get our support.

How to Buy a Term Insurance Policy at Mahindra Paybima

Buying a term insurance policy online is very simple. You can follow these steps to buy a term insurance policy online at Mahindra Paybima.

Share personal details

Input basic details along with gender, age, coverage amount, annual income, occupation, etc. to begin the policy procedure.

Browse policies

Check the various plans offered by different insurance companies and shortlist the plans.

Compare shortlisted policies

Once you’ve shortlisted 2-3 policies that suit your requirements, compare them online.

Add riders

Select the appropriate riders or add-ons to the policy for additional cover.

Complete and review the proposal form

Enter proposer details for cKYC, medical information and nominee details.

Make payment

Pay for the policy online using credit/debit cards, UPI, wallets, or net banking.

Upload Documents

Provide documents for ID proofs, address proof and salary proof.

Medical examination

The insurance company conducts a medical examination before issuing the policy.

Get the policy

The proposal is submitted to the insurance company for approval. Once approved, you will receive the policy by email.

Benefits of Buying Term Insurance Plans online on Paybima

It is important to compare the best term insurance plans, and here are some of the reasons why:

Best coverage

In a term insurance policy, there are different types of coverage options available. You can easily compare and choose a plan that meets your specific requirements and offers the best coverage.

Get the best rate

You can get a term insurance policy that offers the best value for your money.

Understand the features

You gain a better understanding of the insurance market & learn about the different types of features available in policies.

Safest Choice

While comparing the plans you can compare the claim settlement ratio of the insurance companies and choose the plan with the highest percentage.

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Ask Anything as We Have Answers to Everything in Life Insurance

Term insurance ensures that your loved ones are financially protected in the event of your untimely demise. It provides a death benefit to your beneficiaries, which can help cover various expenses such as outstanding debts, mortgage payments, daily living expenses, education costs, and other financial obligations.

The simple formula to calculate the coverage of term insurance depends on the age and the yearly expenses. You can go up to 10 times your annual earnings to confirm that you have sufficient cover to protect your family.

A term policy is a financial support instrument for your family when they don't have the insured around. It should be long enough, till the age the family has financial dependence on the insured Ideally, it should be in sync with their liabilities, loans, and retirement plans.

If you want to leave a legacy for your loved ones, you can also opt for whole-life coverage of term insurance, where you will be covered up to 100 years as per the plan. 

The sooner you purchase life insurance, the lower premium you will pay, as it becomes more expensive with each passing year. Additionally, your policy application could get rejected or premiums may increase by 50-100% if you develop a lifestyle disease.

No. The premium you pay for term insurance will remain the same throughout the policy term; unless any adverse declarations are made at a later stage.

Claim rejection can be avoided by ensuring the below points:

  1. Make sure that the beneficiaries' list is updated and that they are aware of the active policies. Keep the PayBima Claim Assistance Card with them.
  2. Ensure that all the information is correctly provided at the time of policy issuance including existing medical conditions, income, age, other declarations, etc.
  3. Pay policy premium on time to avoid policy lapse
  4. Read and understand the terms and conditions of your insurance policy thoroughly before purchasing it. Be aware of any exclusions or limitations that may apply to your coverage.

Maintain proper records of all policy-related documents, premium payments, correspondence with the insurance company, medical reports, and any other relevant paperwork. These records can help support your claim if required.

Inform the insurance company promptly about any changes in your personal information or circumstances that may affect your coverage, such as a change of address or change in nominee details

PayBima guarantees dedicated claim support in the insured's absence. We will assist the nominees with all their claim-related queries, claim filing, documentation, etc, for a stress-free claim experience.

Add-ons are optional but including them in the primary policy can be very useful during unexpected events. They provide enhanced life cover at affordable premiums while offering additional benefits within a single policy, like waiver of premium, critical illness benefit, accidental death benefit, additional payout on disability, etc.