Term Life Insurance
Pure protection at the lowest cost
What is it?
Term insurance is pure life cover — if you die during the policy term, your family gets the sum assured. If you survive, you get nothing back (and that's the point).
It's the cheapest form of life insurance because it has no investment component.
How does it work?
- Choose cover — 10-15x your annual income (e.g., ₹1 Cr for ₹8L income)
- Choose term — Until retirement (typically 60-65 years)
- Pay annual premium — ₹10-15K/year for ₹1 Cr cover (age 25-30)
- If you die: Family gets the full sum assured, tax-free
- If you survive: Nothing — you 'wasted' the premium (like car insurance)
Add-ons worth considering: Critical illness rider, accidental death benefit.
Who should buy?
- Everyone with dependents — Spouse, children, aging parents who depend on your income
- Especially if you have loans — Home loan, car loan that family would inherit
- Buy early — Premiums are 2-3x cheaper at 25 vs 35
Not needed if: You have no dependents and sufficient assets to cover liabilities.
Tax treatment
- Premium paid: Deductible under Section 80C (up to ₹1.5L)
- Death benefit: Completely tax-free under Section 10(10D)
- Maturity: No payout (pure term) so no tax applicable
Term insurance is one of the few financial products where the entire benefit is tax-free.
How to start?
- Calculate cover needed: (Annual expenses × 15-20) + outstanding loans
- Compare online plans (HDFC Click2Protect, ICICI iProtect, Max Life)
- Buy online — premiums are 30-40% cheaper than offline
- Disclose all health conditions honestly (false claims get rejected)
Rule of thumb: Get at least 10x annual income as cover. ₹1 Cr is the minimum for most salaried professionals.
Check your financial health
Ask Corpus whether your insurance cover is adequate for your family's needs.
Ask Corpus →Disclaimer: This is educational content, not investment advice. Returns and tax rules are indicative and subject to change. Consult a SEBI-registered advisor for personalized guidance.