What is Term Insurance?

Term insurance is the simplest form of life cover. You pay a regular premium for a fixed term — say 30 years. If you pass away during that term, the insurer pays your nominee a lump sum (the sum assured). If you outlive the term, in most plans, nothing is paid. That's the trade — pure protection, no investment baggage.

Why most planners start here

• It's significantly cheaper than endowment, ULIP or whole life — for the same cover.
• It's transparent — your nominee knows exactly what they'll receive.
• It frees you to invest the savings (mutual funds, PPF) for better long-term returns.

How term cover is paid out

• Lump sum: the entire sum assured at once — the default.
• Monthly income: a steady payout over a defined period (often 10–25 years) to replicate a salary.
• Lump sum + monthly: a mix — partial upfront for immediate needs, the rest as income.

When term makes the most sense

Anyone with financial dependents, an active home loan, or future goals (children's education, spouse's financial independence) should consider a term plan. The earlier you buy, the cheaper your premium is locked at for the rest of the term.