What is term insurance?

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What is term insurance?
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• Term insurance, or temporary insurance as it is
  also known, provides coverage for a specific
  term. In case of any unfortunate event during
  this term, the person who is nominated for the
  receipt of fundalso known as the
  nomineereceives the sum for which the insuree is
  covered. The policy expires at the end of the
  term.

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• Term life insurance is the simplest type of
  insurance. The money you pay as premiums does not
  go towards any kind of investment, but is used
  for providing cover. Only a small amount is
  deducted to cover the insurance company's costs.
  Hence, it is also the least expensive type of
  insurance.

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• Say you buy a term insurance plan for a sum
  assured of Rs 20 lakh for 10 years. You will have
  to pay a small amount annually as the premium. In
  case of an unfortunate event during these 10
  years, your nominee will receive Rs 20 lakh.
  However, in case you outlive this tenure, the
  life insurance policy will expire. You will hence
  not receive any return on the premiums paid over
  the 10 years.

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Why term insurance?

• It is important to ensure that your loved ones
  are taken care of in case of an unfortunate
  event. Buying a term plans is one of the simplest
  and least expensive methods of doing this.
• Paying for term insurance also has some tax
  benefits. Premium of up to Rs 1,00,000 is
  deductable from your taxable income under Section
  80C of the Income Tax Act, 1961.

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Quick Facts

• Term insurance provides coverage for a
  specific term
• It is an easy and affordable way of ensuring
  the financial security of your loved ones
• In case of an unfortunate event, your nominee
  gets the amount of coverage
• The policy expires at the end of the selected
  tenure

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