Query about "Term Insurance Plan"

Sir, I am a Govt employee. My Age is 41 ½ Yrs. I have a family of three members including myself. Recently I came to know about “Term Insurance Plan” which (as I have understood) only assures a particular sum of amount only in the event of the insured person’s death. But if the person remains alive, he/she gets nothing. I found this very unique and think it could be a very effective safeguard for my family in the event of my absence. Therefore, I would like to know : 1) Please tell me whether I have properly understood the meaning and effectiveness of “Term Insurance Plan” of not. 2) At my age, what may be the approximate premium for a sum of Rs.20 Lacs (coverage till 60 yrs of my age). 3) What are the major houses that offer this “Term Insurance Plan”? 4) Which company/companies offer/s most economic and competitive rate/s? 5) Is there any demerit of this “Term Insurance Plan”. Sir, I shall remain very much obliged for your valuable guidance. Thanx & regards Rajib Ray

asked Jan 18 '12 at 11:30 by Rajib R 1448


  1. You have understood it correctly. Term insurance is purest form of insurance. This is the only policy which talks only about protection and not investment. As this only cover risk, premium amount is much lower than other type of insurances.
  2. You should get term insurance with sum assured atleast 10 times your annual income plus any liabilities (home/education/car loan). At your age, insurance of around 20 lacs for 20 years would cost around 17-18000 minimum.
  3. Most of the insurance companies offer term insurance plans.
  4. There are new companies which might be offering online term insurance pretty cheap. But you must keep in mind that cheaper things are not always good. One must also keep insurance company size, years in business and past claim settlement ratio in mind. On these parameters, LIC is best company to get insurance from. In private players, ICICI, HDFC and Birla sunlife are some good companies.
  5. There is no demerit of term insurance plan. This is best insurance plan and every chief wage earner should buy this to secure his/her family future in case he is no more.

You should also read previous questions on this subject here: http://www.socialfinance.in/tags/term-insurance/

answered Jan 22 '12 at 23:11 by pankaj 5.2k320

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Asked: Jan 18 '12 at 11:30

Seen: 1,479 times

Last updated: Jan 22 '12 at 23:11