What Are the Types of Term Insurance Plans?

What is Term Insurance?

Types of Term Insurance Plans

FAQs About Types of Term Insurance

Why should I buy a term insurance policy at an early age? up-arrow

The premium for life insurance plans depends on your age as it determines the risk of your passing away. Therefore, when you are young, there are lower health risks, and your life expectancy is much higher. Thus, the cost of premiums is also low.

Which type of term plan has the least premium burden? up-arrow

If you want a term plan that reduces your premium payment burden then you can opt for the decreasing term plan. In this policy the premium amount gets reduced each year with the death benefit remaining constant.

Does the term insurance plan offer tax savings benefits? up-arrow

Yes, under Section 80C of the Income Tax Act of 1961, the premium you pay is deductible up to ₹1 Lakh from the taxable income. Moreover, death benefits received by your nominees are tax-free, as per Section 10(10D).

What if I live past the policy tenure? up-arrow

If you survive the policy tenure of a level term plan, you will not receive any maturity benefits. However, if you choose a TROP plan, you will receive the maturity benefit, i.e., the total amount of premium paid by you.