Term Insurance
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Term insurance is a type of life insurance policy that provides financial protection to your family in case of your untimely demise during the policy term. It is one of the most affordable ways to secure a high coverage amount, such as a ₹1 Crore Term Insurance Plan, at a relatively low premium. Unlike investment-oriented products, a term plan focuses purely on protection, ensuring your loved ones are financially stable when you are not around. The payout from a term life insurance policy can help your family manage living expenses, repay debts, or fund long-term goals like education. With flexible options and wide availability, it remains the best term policy choice for individuals seeking comprehensive yet cost-effective coverage.
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Highlights
of Term Insurance Plans
Most Popular Term Insurance Plans Â
Option to cover your Spouse under the same Policy with Joint Life Protection
Avail Survival Benefit as Monthly Income on attaining age 60to ensure a work -free retired life.
With Return of Premium option to get your Premium back on survival till maturity.
Stand eligible for tax deduction under Section 80C for the Income Tax Act, 1961.
Coverage against death, terminal illness and disability
Special premium rates for non-tobacco users.
Stand eligible for tax deductions under Section 80C for the Income Tax Act, 15D.
Can add Critical Illness Rider that covers 35 critical illness.
Option to cover your Spouse under the same Policy with Joint Life Protection
Avail Survival Benefit as Monthly Income on attaining age 60to ensure a work -free retired life.
With Return of Premium option to get your Premium back on survival till maturity.
Stand eligible for tax deduction under Section 80C for the Income Tax Act, 1961.
Coverage against death, terminal illness and disability
Special premium rates for non-tobacco users.
Stand eligible for tax deductions under Section 80C for the Income Tax Act, 15D.
Can add Critical Illness Rider that covers 35 critical illness.
Option to cover your Spouse under the same Policy with Joint Life Protection
Avail Survival Benefit as Monthly Income on attaining age 60to ensure a work -free retired life.
With Return of Premium option to get your Premium back on survival till maturity.
Stand eligible for tax deduction under Section 80C for the Income Tax Act, 1961.
Coverage against death, terminal illness and disability
Special premium rates for non-tobacco users.
Stand eligible for tax deductions under Section 80C for the Income Tax Act, 15D.
Can add Critical Illness Rider that covers 35 critical illness.
Option to cover your Spouse under the same Policy with Joint Life Protection
Avail Survival Benefit as Monthly Income on attaining age 60to ensure a work -free retired life.
With Return of Premium option to get your Premium back on survival till maturity.
Stand eligible for tax deduction under Section 80C for the Income Tax Act, 1961.
Coverage against death, terminal illness and disability
Special premium rates for non-tobacco users.
Stand eligible for tax deductions under Section 80C for the Income Tax Act, 15D.
Can add Critical Illness Rider that covers 35 critical illness.
Stand eligible for tax deduction under Section 80C for the Income Tax Act, 1961.
Avail Survival Benefit as Monthly Income on attaining age 60to ensure a work -free retired life.
Option to take policy loan once policy acquires surrender value
Option to alter premium payment mode
Option to take policy loan once policyacquires surrender value
Stand eligible for tax deduction underSection 80C for the Income Tax Act, 1961.
Stand eligible for tax deduction under Section 80C for the Income Tax Act, 1961.
Avail Survival Benefit as Monthly Income on attaining age 60to ensure a work -free retired life.
Option to take policy loan once policy acquires surrender value
Option to alter premium payment mode
Option to take policy loan once policyacquires surrender value
Stand eligible for tax deduction underSection 80C for the Income Tax Act, 1961.
Stand eligible for tax deduction under Section 80C for the Income Tax Act, 1961.
Avail Survival Benefit as Monthly Income on attaining age 60to ensure a work -free retired life.
Option to take policy loan once policy acquires surrender value
Option to alter premium payment mode
Option to take policy loan once policyacquires surrender value
Stand eligible for tax deduction underSection 80C for the Income Tax Act, 1961.
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Get complimentary 24x7 health consultation from specialists in just 180 seconds with our free online consultation service
Experience the efficiency and convenience of 4 hour claim settlement, ensuring swift resolution
Get complimentary 24x7 health consultation from specialists in just 180 seconds with our free online consultation service
Experience the efficiency and convenience of 4 hour claim settlement, ensuring swift resolution
Get complimentary 24x7 health consultation from specialists in just 180 seconds with our free online consultation service
Experience the efficiency and convenience of 4 hour claim settlement, ensuring swift resolution
Get complimentary 24x7 health consultation from specialists in just 180 seconds with our free online consultation service
Experience the efficiency and convenience of 4 hour claim settlement, ensuring swift resolution
Get complimentary 24x7 health consultation from specialists in just 180 seconds with our free online consultation service
Experience the efficiency and convenience of 4 hour claim settlement, ensuring swift resolution
Get complimentary 24x7 health consultation from specialists in just 180 seconds with our free online consultation service
Experience the efficiency and convenience of 4 hour claim settlement, ensuring swift resolution
Get complimentary 24x7 health consultation from specialists in just 180 seconds with our free online consultation service
Experience the efficiency and convenience of 4 hour claim settlement, ensuring swift resolution
Get complimentary 24x7 health consultation from specialists in just 180 seconds with our free online consultation service
Experience the efficiency and convenience of 4 hour claim settlement, ensuring swift resolution
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Term Insurance
Everything you Need to Know
Who Needs to Buy a Term Insurance Plan
What are the Main Aspects of a Term Insurance Plan
Type of Term Insurance Plans Available in India
How to Claim a Term Insurance Plan
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.
What are the Main Aspects of a Term Insurance Policy
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.
It's the duration your policy covers ranging from 5 years to over 60 years.
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.
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
The policyholder has the option of paying a lump sum amount or periodic payments - monthly, quarterly, half yearly or annually.
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.
How to Select the Best ULIP
Consider your short-term and long-term goals, to choose funds that match your needs and allow flexibility.
Assess your risk tolerance and financial stability to determine the right asset allocation.
Ensure the insurer maintains a solvency ratio of at least 150% for financial security.
Understand features like fund switch, premium redirection, partial withdrawals, top-ups, etc. for optimal benefits.
Look for ULIPs that offer flexibility in fund choices (debt, equity or both to align with your goals and objectives.
Choose a portfolio strategy that suits your investment style - wheel of life, auto-transfer, trigger-based, fortune gain, etc.
At Paybima, buying a Life insurance plan is easy and you can opt for an advisor’s help anytime.
Types of Term Insurance Plans Available in India
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.
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.
Premiums are refunded if the insured survives the policy tenure.
Both have same benefits; however, a single-life plan is for individuals while a joint-life plan is best suited for couples with children.
Types Of Term Insurance Plans
| Types | Features |
| Level Term Insurance | Simple, fixed premiums with a lump-sum payout if the policyholder passes away during the term. |
| Increasing Term Insurance | Coverage amount increases yearly to counter inflation; premiums may rise gradually. |
| Decreasing Term Insurance | Coverage decreases over time to match outstanding debts like mortgages; premiums are generally lower. |
| Return of Premium Term Insurance | All paid premiums are refunded if the insured survives the policy term, while still offering life coverage. |
| Convertible Term Insurance | Allows conversion to other life insurance products (e.g., whole life) later, with no additional medical tests. |
| Group Term Insurance | Employer-provided group coverage under a single policy; coverage typically ends when employment ends. |
| Joint Term Insurance | Single policy covering two individuals (often spouses); upon the first death, the surviving member receives the benefit. |
| Saral Jeevan Bima | IRDAI-mandated basic term insurance, making it standardized and affordable across providers—great for first-time buyers. |
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.
The complete sum assured is paid to the nominee.
An additional sum assured is paid to the nominee.
A part of the sum assured is paid to the policyholder for medical expenses.
A lump sum amount is paid to the policyholder if it is covered in the plan.
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).
If the policyholder dies due to any kind of substance abuse.
If the insured’s death occurs through any illegal/criminal activities.
A death that occurs due to a condition/illness that already existed before policy commencement.
How Does Term Insurance Work?
Select the sum assured (e.g., ₹1 Crore Term Insurance Plan) and policy duration based on your income, liabilities, and family’s needs.
Premiums can be paid monthly, quarterly, yearly, or in one go. The amount stays fixed throughout the policy term.
If the policyholder passes away during the term, the nominee receives the full coverage amount as a lump sum or structured payout.
In standard term life insurance, if you survive the policy term, no benefit is paid out, making it the most affordable protection plan.
With certain plans, if the policyholder outlives the term, all premiums paid are refunded, ensuring financial value even without a claim.
Nominees can opt for lump sum, monthly income, or a mix of both, depending on what best secures their lifestyle.
How to Raise A Claim Under Term Life Insurance Policy
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.
Premiums are lower when bought early in your earning life.
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.
Choose a tenure that matches your financial responsibilities.
Consider options like accidental death, critical illness coverage and premium waivers.
Choose between lump sum or monthly payments or a combination of both.
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.
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.
Longer terms may have higher premiums but offer better benefits.
You can choose between yearly, quarterly, monthly, or single payment tenure.
Follow this procedure to make claims seamless.
Claim intimation<br> 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.
Claim processing<br> 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.
Claim settlement<br> 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.
Documents for Claiming Term Insurance Policy
The nominee has to submit the following documents in order to receive the death benefit:
Claimant's statement form - download the claim form from Paybima.com
Original policy document
Copy of death certificate issued by the local municipal authority
Copy of nominee’s identity proofs such as Aadhar card, PAN card, passport, etc.
Cancelled cheque/copy of bank passbook of the claimant
Copy of cause of death certificate
Prior medical records of insured/life-assured
Medical attendant's/ hospital certificate issued by a doctor - download format from the website
Payout Options Under Term Insurance
The sum assured is disbursed as fixed monthly instalments. This ensures a steady flow of income, acting as a replacement for the policyholder’s earnings.
The nominee receives monthly income instalments that rise by a certain percentage each year for a set period. This helps counter inflation and supports evolving financial needs.
The nominee receives the entire sum assured as a one-time payment. This option provides immediate liquidity to settle debts, handle large expenses, or invest further.
A portion of the sum assured is given upfront as a lump sum, while the balance is distributed as regular monthly income. This strikes a balance between meeting immediate expenses and ensuring long-term financial stability.
When Can A Term Insurance Claim Get Denied?
Death due to suicide within the first year of policy commencement is generally not covered.
Claims can be rejected if health conditions or habits like smoking are not disclosed at the time of purchase.
Demise due to participation in dangerous sports, adventure activities, or illegal acts may not be covered.
Death caused by consumption of alcohol or drugs is excluded.
Who Needs Term Insurance Plan
| Who Should Buy | Why a Term Plan is Essential |
| Young Professionals (25-35 years) | Starting careers and building financial responsibilities, a term plan provides affordable protection for their family in case of unexpected events. |
| Married Individuals | Safeguards the family against financial hardships like home loans, daily expenses, and children’s education through a ₹1 Crore Term Insurance Plan or higher. |
| Parents with Young Children | Ensures children’s education, healthcare, and upbringing continue smoothly, providing a strong financial safety net. |
| Homeowners with Loans | Protects the family from mortgage repayment burdens and other debts, ensuring financial stability if the policyholder passes away. |
| Self-Employed or Freelancers | With variable income, a term plan guarantees a death benefit payout, securing loved ones’ financial well-being despite income uncertainty. |
In addition, the below documents are required for accidental/suicidal death:
Post-mortem report and chemical viscera report
FIR/panchnama/inquest report and final investigation report
Copy of driver’s license if the life assured was driving the vehicle at the time of the accident (applicable if 'accident and disability benefit rider' is opted)
Post-mortem report and chemical viscera report
Term Insurance Plan Claim – How to Avoid Rejections
Here are some of the main reasons for claim rejection:
The policyholder failed to disclose important information, such as a pre-existing medical condition or a dangerous hobby.
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.
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.
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.
Input basic details along with gender, age, coverage amount, annual income, occupation, etc. to begin the policy procedure.
Check the various plans offered by different insurance companies and shortlist the plans.
Once you’ve shortlisted 2-3 policies that suit your requirements, compare them online.
Select the appropriate riders or add-ons to the policy for additional cover.
Enter proposer details for cKYC, medical information and nominee details.
Pay for the policy online using credit/debit cards, UPI, wallets, or net banking.
Provide documents for ID proofs, address proof and salary proof.
The insurance company conducts a medical examination before issuing the policy.
Documents Needed to Buy a Term Insurance Plan
Address proof: Driver’s license/bank statement or passbook with latest entries/passport/voter ID/Aadhaar card/ration card
Identity proof: Aadhaar card/voter ID/passport/PAN card
Age proof: PAN card/Aadhaar card/passport/voter ID card/marriage certificate/ration card/birth certificate/driver’s license
Passport-size photographs of the individual
How To Select The Best Term Insurance Plan
Check the insurer’s track record for paying claims. A higher ratio ensures that your nominee can easily receive the death benefit when needed.
Look at the insurer’s solvency ratio, which indicates their ability to honor claims even during large-scale events or unexpected situations.
Many term plans offer optional add-ons such as critical illness, accidental death, or waiver of premium. These benefits can enhance your coverage and provide extra protection for your family.
Choose a plan that balances sufficient coverage with premiums you can comfortably pay. Many term plans lock the premium for the entire policy term, ensuring predictable costs without any surprise hikes.
Align the policy term with your family’s financial needs and select a sum assured that can cover daily expenses, outstanding debts, and future goals.
Consider your occupation, health, and hobbies, as high-risk activities or pre-existing conditions may require higher coverage or specific riders.
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:
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.
You can get a term insurance policy that offers the best value for your money.
You gain a better understanding of the insurance market & learn about the different types of features available in policies.
While comparing the plans you can compare the claim settlement ratio of the insurance companies and choose the plan with the highest percentage.
Factors Affecting Term Insurance Premiums
Insurers assess the likelihood of claims based on age, health, and lifestyle.
Higher sum assured typically results in higher premiums.
Longer coverage periods can slightly increase premium costs.
Past or ongoing health conditions can influence premium rates.
Tax Benefits Of Term Insurance
Beyond financial protection, term insurance also provides significant tax advantages under the Income Tax Act, 1961.
Premiums paid towards term insurance can be claimed as a deduction under Section 80C, subject to the annual cap of ₹1.5 lakh. The premium amount should not exceed 10% of the policy’s sum assured for plans issued after April 1, 2012 (20% for older policies).
Any death benefit received by the nominee is exempt from tax under Section 10(10D). This exemption holds if the policy complies with the same premium-to-sum-assured ratio rules mentioned above.
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Yes, you can buy a ULIP life insurance plan in the name of your minor child. ULIPs allow children aged 30-90 days and above to be covered under the plan. So, check the minimum entry age and if your child fulfils the minimum entry age criterion, you can insure him/her under the plan.
Usually, ULIPs are offered for a minimum period of 5-10 years and a maximum tenure up to 40 years. However, there are ULIPs which also allow lifelong coverage and continue till you reach 99 or 100 years of age.
ULIPs have a minimum lock-in period of 5 years before which you are not allowed to surrender. If you discontinue the premium after 3 years, the fund value would be transferred to a discontinued policy fund. Discontinuation charges would be deducted from the fund for the next 2 years. Once the lock-in period is over, you would be allowed to withdraw your fund value from the discontinued fund.
Enhancement of the sum assured depends on the plan’s terms and conditions. Some ULIPs allow enhancement of the sum assured during the policy tenure while others don’t. So, read your policy document to understand if an enhancement is allowed or not.
You can claim a deduction for the premium paid up to a maximum limit of Rs.1.5 lakhs under Section 80C. However, if your premium is more than 10% of the sum assured, premium up to 10% of the sum assured would be allowed as a deduction.
Yes, there is a minimum and maximum limit on the amount of partial withdrawals that you do. This limit depends on the policy. However, almost all ULIPs ensure that after the withdrawal, your fund value should be equal to at least one annualised premium.
Yes, you can buy as many ULIPs as you want. There is no restriction on the number of ULIPs that you can buy.
Yes, an additional premium is required for the rider. However, under ULIPs, you don’t have to pay the premium. The cost of the rider is deducted from the fund value as the rider coverage charge.
Some plans allow you the flexibility to avail of the death benefit in installments rather than in one lump sum. However, this benefit is plan specific and you should check your policy to find out if you can avail of the death benefit in installments or not.
No, on maturity, the fund value is paid even if it is lower than the sum assured.
Yes, some ULIPs allow coverage on a joint basis. So, check for plans which allow such coverage because not all ULIPs have this feature.
ULIPs allow different types of premium payment modes. You can pay a single premium, limited premium, or regular premium for the policy if the policy allows.
Under pension ULIPs, you are allowed to withdraw up to 60% of the accumulated fund value in lump sum. The remaining fund value should, then, be used to either buy a single premium deferred annuity plan or an immediate annuity plan.
No, the returns under ULIPs are not guaranteed. They depend on the market movement.
No, you cannot lower the charges associated with ULIPs. The charge structure is designed by the company and is applicable for all policyholders. However, if you look for plans that refund some of the charges on maturity, you can lower the effective charges deducted from your fund value.
Nomination is not mandatory. However, it is advisable to nominate an individual to receive the death benefit otherwise, if the insured dies, his/her legal heirs would have to make a claim by proving their legal status as the deceased’s heirs.
Yes, a loading is applicable if you pay monthly premiums, if you have an adverse medical history, if you smoke, etc. However, no additional premium is payable for the loading. The loading is adjusted as an increase in the ULIP charges.
If you are aged above 45 years, or if you opt for a high sum assured or if you have an adverse medical condition then you would have to undergo a health check-up before buying the policy.
Usually, ULIPs allow individuals aged up to 65 years to buy the plan. In some plans, however, the maximum entry age can be up to 70 years too.
Most ULPIs allow a sum assured of 1.25 times the top-up premiums if you are aged up to 45 years. For higher ages, the sum assured is calculated as 1.10 times the top-up premium.
Term insurance is a pure form of life insurance that offers financial protection to the policyholder's family in case of his or her untimely demise during the policy term.
A term plan provides high coverage at affordable premiums, ensuring your loved ones are financially secure even in your absence.
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Unlike investment-oriented policies, term insurance focuses only on protection, making it the most cost-effective way to get maximum coverage.
Experts recommend coverage of at least 10–15 times your annual income. For instance, a ₹1 Crore Term Insurance Plan is suitable for many middle-income families.
Yes, NRIs can buy term insurance India policies from Indian insurers, ensuring protection for families residing in India.
In a regular term life insurance plan, there is no payout on survival. However, with a Return of Premium option, all premiums paid are refunded.
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Riders are add-ons like accidental death, critical illness, or disability cover that enhance the protection of your base policy.
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No, the death benefit paid to your nominee is completely tax-free under Section 10(10D) of the Income Tax Act.
Many insurers offer flexible options to increase cover at life milestones such as marriage, childbirth, or buying a home.
Saral Jeevan Bima is a simple, affordable, and standardized term insurance plan defined by IRDAI, offering uniform features across all insurers.
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Life insurance is a contract between you and an insurer that provides financial protection to your family in case of your death.
Term life insurance offers pure protection for a fixed period. If the policyholder passes away during the term, the nominee receives the sum assured.
Experts recommend coverage worth 10–15 times your annual income. Many families consider starting with a 1 Crore Term Insurance Plan for adequate protection.
No, it’s not mandatory in India, but it is highly recommended for anyone with dependents or financial responsibilities.
Medical tests may be required depending on your age, health condition, and the sum assured you are applying for.
Premiums paid are eligible for deductions under Section 80C (up to ₹1.5 lakh), and maturity proceeds may be exempt under Section 10(10D).
Insurers provide a grace period (usually 15–30 days). If payment isn’t made within this time, the policy may lapse.
Yes, you can update or change your nominee anytime during the policy term by submitting a request to the insurer.
It shows the percentage of claims that an insurer settles. A higher ratio indicates greater reliability in honoring claims.
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