Term Life Insurance
The Most Cover For Every Rupee
Term life insurance pays a lump sum to your family if you die during the policy term. It has no savings element in its basic form, so it offers the highest life cover for the lowest premium of any life plan. For anyone with dependants or a home loan, it is usually the first policy to buy. MILES compares term plans from several life insurers, helps you set the right cover and term, and stays with your nominee at claim time.
Reviewed by Vinay Jain, Principal Officer (IRDAI Reg. No. 954) · Last reviewed
Why A Term Plan Makes Sense
Low Premium, High Cover
Because there is no savings component, a modest premium can buy a large sum assured for your family.
Protects Loans And Goals
The payout can clear a home loan and fund children's education if your income stops unexpectedly.
Premium Locked In
For a regular level-cover plan, the premium stays the same for the whole term once the policy is issued.
Useful Riders Available
Add accidental death, critical illness or premium waiver riders, subject to each life insurer's terms.
Flexible Payout Options
Nominees can receive a lump sum, a monthly income, or a mix of both, depending on the plan.
Nominee Claim Support
MILES helps your family collect documents and follows up with the life insurer until the claim is paid.
What is term life insurance?
Term life insurance is a pure protection policy that pays a fixed sum assured to your nominee if you die during the chosen term. If you survive the term, a standard term plan pays nothing, which is why the premium is so much lower than other life insurance plans.
Term plans are issued by life insurers registered with IRDAI. They are designed to replace your income for your family, not to grow your money. If you want savings as well, remember that returns on savings and ULIP products are not guaranteed unless the policy states a guaranteed benefit.
What it covers
- Death benefit: the sum assured paid on death from illness or accident during the policy term, subject to the policy’s terms.
- Terminal illness benefit: some plans pay the sum assured early if a terminal illness is diagnosed, as defined in the policy.
- Payout choice: lump sum, monthly income for a set period, or a combination.
Common riders
- Accidental death benefit, paying an extra amount if death is due to an accident
- Critical illness, paying a lump sum on diagnosis of a listed illness
- Waiver of premium, which stops future premiums on disability or critical illness
- Accidental total and permanent disability
What is not covered
- Suicide within the period set in the policy, where the life insurer pays according to regulatory rules rather than the full benefit.
- Non-disclosure: claims can be questioned if health, tobacco use, income or existing cover were not declared correctly.
- Hazardous activities such as adventure sports or certain occupations, if excluded at underwriting.
- Survival to maturity in a standard plan. A return of premium variant refunds premiums at maturity, at a higher cost.
Who needs it
- Salaried people with a spouse, children or parents who rely on their income
- Anyone with a home loan or other large debt
- Business owners who want to protect their family from business borrowings or fund a partner buyout
- Young earners, who lock in a low premium by buying early
Employer group term life insurance helps, but it usually ends when you leave the job and the cover may be modest. A personal term plan stays with you.
How the cover and premium are decided
Choosing the sum assured
A common rule of thumb is to cover many years of your annual income, plus outstanding loans and major goals such as education, minus investments you already hold. The right figure depends on your family’s actual needs, so we work through it with you.
Choosing the term
Cover should normally run until your working life ends and your children are independent, or until your largest loan is repaid.
What drives the premium
- Age and gender
- Tobacco use
- Health, family history and medical test results
- Income, occupation and education, which also affect how much cover a life insurer will allow
- Sum assured, term, payment frequency and riders
| Variant | How it works |
|---|---|
| Level term | Same sum assured throughout |
| Increasing cover | Sum assured rises at a set rate to keep pace with inflation |
| Decreasing cover | Sum assured falls over time, often matched to a loan |
| Return of premium | Premiums refunded at maturity if you survive, at a higher cost |
| Limited pay | Premiums paid for a shorter period than the cover term |
Premiums may qualify for deductions and the death benefit for exemption under the Income-tax Act, subject to prevailing tax laws and policy conditions.
How MILES helps
- Compare life insurers: we compare premiums, riders, underwriting approach and claim service across several life insurers.
- Right cover, right term: we calculate the gap after existing and employer cover, and check whether a critical illness policy would complement the plan.
- Clean proposals: we help you disclose everything correctly, the single most important step for a smooth claim.
- Medical coordination: we arrange and track medical tests requested by the insurer.
- Claims support: we help your nominee through every step.
How a claim works
- The nominee informs the life insurer or MILES of the death.
- Submit the claim form, death certificate, policy details and the nominee’s identity and bank proof.
- Provide medical records for death due to illness, or the FIR and post-mortem report for an accident.
- The life insurer reviews the claim and may seek further information in some cases.
- The benefit is paid to the nominee as chosen. Visit our claims page for help.
Cover, exclusions and premiums depend on the insurer’s policy wording and underwriting. MILES Insurance Brokers Pvt. Ltd. is an IRDAI-licensed direct broker (Life & General, Reg. No. 954); the insurance is issued by the life insurer. Insurance is the subject matter of solicitation.