Term Insurance Benefits

What are the Term Life Insurance Benefits?

Here is a list of all the top 10 term insurance benefits you can avail of by buying a term life insurance in India in 2025:

• Affordable Premiums & High Sum Assured

• Easy to Understand and Buy

• Multiple Death Benefit Payout Options

• Additional Riders for Enhanced Coverage

• Income Tax Benefits

• Critical Illness Coverage

• Accidental Death Cover

• Return of Premium Option

• Whole Life Cover

• Flexible-Premium Payment Modes

1. Affordable Premiums & High Sum Assured

   One of the biggest advantages of term life insurance is the ability to secure a large life cover for a very small premium. For example, a healthy 30-year-old non-smoker can get a ₹1 crore cover for just ₹485/month.

   Tip - Buy early, each year you delay can raise your premiums by 4–6%, with steeper increases after age 40.

   Before purchasing any term plan you can easily calculate the term insurance premium by using this online term insurance calculator.

2. Easy to Understand and Buy

   One of the main advantages of term life insurance is that you can purchase the most suitable term plan from the comfort of your home in a few clicks. You can go through the policy documents, compare term plans, and their CSR ratios before selecting the right term insurance for yourself and buy online in just a few minutes.

3. Multiple Death Benefit Payout Options

   Most term insurance companies in India provide the policyholder with the option to select a suitable benefit payout option. The policyholder can choose if he/she want the death benefits of term life insurance to be paid in a lump sum amount, monthly instalments, or a combination of both.

4. Additional Riders for Enhanced Coverage

   Term plans come with riders that you can select to increase the base term insurance benefits. You can also add all these riders to your term insurance plan by paying a small amount of premium. The important term insurance riders in India are an accidental death benefit, accidental total permanent disability benefit, terminal illness benefit, critical illness benefit, hospicare benefit, and waiver of premium benefit riders.

5. Income Tax Benefits

   There are several term life insurance benefits that you can avail of by buying a term plan. You can claim term insurance tax benefits under sections 80C, 80D, and 10(10D) of the Income Tax Act of 1961 as per the prevailing tax laws.

6. Critical Illness Coverage

   Adding the critical illness coverage to the base term plan can ensure additional coverage against the diagnosis of covered critical illnesses. The rider sum assured can help take care of medication and treatment costs.

7. Accidental Death Cover

   With the accidental death rider, you get the advantages of term life insurance, additional cover that pays an additional amount on top of the base sum assured in the event of the policyholder’s untimely death.

8. Return of Premium Option 

   A term insurance plan provides life cover to the nominee/beneficiary in case of the life assured’s unforeseen death. It doesn’t provide any maturity benefit. However, you can receive maturity benefits under a term plan if you buy a Term Return of Premium Plan (TROP). This option requires you to pay higher premiums and return the full premium paid by you if you survive the policy term. 

9. Whole Life Cover

   One of the main benefits of term life insurance plans is that most term plans offer the option of extending the policy term to cover the policyholder for their whole life i.e., till 99 or 100 years of age. With these whole life insurance plans, the policyholder can ensure that their dependents are financially secure for their whole life.

10. Flexible-Premium Payment Modes

    Term insurance plans often offer a variety of premium payment terms and modes to help the policyholder pay the premiums at their convenience. You can choose to pay for a limited, regular, or single premium payment term on a monthly, quarterly, yearly, or half-yearly basis.

What are the Rider Benefits of Term Life Insurance?

Let us take a look at all the available riders that you can add to the base plan to enhance your term insurance benefits:

• Critical Illness Rider: A critical illness rider pays the rider sum assured in case of diagnosis of a critical illness listed under the policy documents to help take care of the treatment costs.

• Terminal Illness Rider: A terminal illness rider pays out either the entire or a part of the base sum assured to the policyholder in advance on the diagnosis of the terminal illness. 

• Accidental Death Benefit Rider: In case of policyholder’s accidental death during the policy term, the insurer pays the rider sum assured, along with the base life cover, to the nominee of the policy.  

• Accidental Total Permanent Disability (ATPD) Rider: On the total and permanent disability due to an accident, the insurer pays the ATPD rider sum assured to the policyholder.

• Waiver of Premium Rider: In case of a job loss due to the diagnosis of a critical illness or accidental total permanent disability of the policyholder, the insurer waives off all the remaining premiums. The term insurance policy will still remain active and continue its cover as usual for the entire policy term.

• Hospicare Benefit Rider: The hospicare benefit rider pays a percentage of the base sum assured in case the policyholder is hospitalized. These rider advantages of term life insurance are especially helpful in paying off hefty hospital bills and help you focus on your recovery without straining your bank.

How Term Insurance Benefits Your Family?

Here are the advantages of term life insurance that can help your family:

• Financial Protection: The main benefit of term insurance is that it provides financial protection to your loved ones in the event of your unfortunate demise. Your family can use the benefit amount to take care of their monthly expenses and other liabilities.

• Income Replacement: The term plan income replacement feature pays the death benefit as a monthly payout for a fixed tenure to replace the income of the main income earner in their absence.

• Debt Repayment: In your absence, the burden of having to pay off the outstanding debt may fall on your shoulders. A term insurance benefits payout can help your family repay the debts in your absence.

• Fulfil Financial Goals: You and your family may have some financial goals that you may want to fulfil in the future. A term insurance payout can help you fulfil goals like funding child’s higher education or paying for the child’s future wedding.

• Spouse’s Retirement: In case you are the main income earner with a dependent spouse, your spouse may be left financially vulnerable in your absence. With the term insurance benefits payout, your spouse can lead a financially independent life.

Why Buy Term Life Insurance Plan From Policybazaar?

You can get the following additional term insurance benefits by buying from Policybazaar:

• Policybazaar offers dedicated claim assistance for term insurance plans.

• The company offers an exclusive lifetime discount of up to 5% on online term plan purchase

• All the calls are 100% recorded to avoid misselling to the customers

• The Policybazaar advisors are available in over 55 cities and can provide offline support and help you understand the plans and documentation

• You can cancel the policy at the click of a button in case you are unsatisfied with your policy purchase

Common Customer Queries Answered

How Do You Choose the Best Term Insurance Plan in India 2025?

With the availability of various term plans online, choosing the best term insurance plan for your needs is difficult and then determining the benefits of term life insurance. Thus, with the help of below factors, getting enough term coverage can be easy:

• Sum Assured: Always check the higher and the lower limits of the sum assured for the different term plans. This provides greater flexibility when selecting adequate coverage for a family’s financial security.

• Policy Term: Choose a term plan that provides flexibility in policy terms. Select a life cover that suits your needs, whether it's for 15 years, 40 years, or even up to 100 years, with specific term plans, ensuring you can adequately protect your family for the desired duration.

• Low premium rates: While term plan premiums are affordable, the specific amount may differ between plans. Comparing various term plans enables you to identify policies with affordable premiums, preventing financial strain.

• Claim Settlement Ratio (CSR): The term insurance company should always have a reliable and high CSR. This parameter indicates that the insurance company will settle the death claim when required, without any hassle.

• Option to opt for Riders: Your term plan should provide a selection of optional riders. This way, you can choose additional coverage against specific risks or events, such as critical illness or hospitalisation costs.

• Buying online: Buy term plan that offers easy online purchase. In addition to instantly accessing the policy documents, you should have the convenience of customizing the plan and making premium payments online from your digital device.

Final Thoughts

There are many term life insurance benefits, but the most important of those is the financial security it provides to the policyholder's family, a chance to beat inflation with the maturity benefit option, and the term insurance tax benefits. You can also avail of these term insurance benefits by comparing and buying the most suitable term plan online in just a few clicks.

FAQs