Term Insurance

• KeyNote:- Features are subject to the selected variant, policy terms and underwriting guidelines. Refer to the product brochure and policy document before purchase.

The figures below describe the gap between what Indian families would need and what they are actually covered for. Each one maps to a specific decision on this page.

Source: IRDAI Annual Report 2024-25

Source: MoSPI, Periodic Labour Force Survey Annual Report 2025

Source: Ministry of Road Transport and Highways, Road Accidents in India 2023

Source: ICMR-INDIAB national study

Source: Registrar General of India, SRS Abridged Life Tables 2019-23

Read together, the protection gap is not an abstraction. It is the arithmetic of a single-earner household, a working-age accident risk, a diagnosis that arrives before the policy does, and a life expectancy that runs past the policy term. Each of those has a specific answer on this page: the sum assured, an accidental death rider, buying before diagnosis, and the policy term.

A financial plan should protect your income, build wealth and help you achieve long-term financial goals. Since every financial product serves a different purpose, understanding where term insurance fits can help you build a well-rounded financial plan.

Key Takeaway: Every financial product has a specific role. Term Insurance protects your family’s financial security by replacing lost income, while other products help meet healthcare, savings, investment and retirement goals.

Starting investments without adequate financial protection may leave your family’s long-term financial goals vulnerable if your income stops unexpectedly.

Term Insurance is available in different forms to meet different financial needs. There is no single type of Term Insurance Plan that is suitable for everyone. The right choice depends on your financial responsibilities, life stage, liabilities, long-term goals and the type of protection you want your family to receive. Understanding how different types of Term Insurance plans work can help you choose a plan that aligns with your family’s financial needs.

A term insurance plan protects your family’s financial future in your absence. The right life cover should enable your family to maintain their lifestyle, meet regular household expenses, repay outstanding loans and achieve important financial goals without compromising their standard of living.

While many people estimate life cover as 10 to 15 times their annual income^!, there is no single amount that is suitable for everyone. The ideal life cover depends on your family’s financial responsibilities, existing assets, future goals and the number of years they are likely to depend on your income.

Before deciding your life cover, evaluate the financial responsibilities your family would need to manage if you were no longer around.

Many people calculate life cover simply by multiplying their annual income. While this provides a useful starting point, your family’s financial needs are influenced by much more than your salary.

A practical approach is to estimate the financial support your family would actually require.

Your life cover should ideally cover:

• Future Household Expenses
• Outstanding Loans and Liabilities
• Future Financial Goals
• Existing Savings and Investments
• Existing Life Insurance Cover

This approach focuses on replacing your family’s financial security rather than only replacing your income.

While many individuals choose a single term insurance policy to meet all their protection needs, some prefer to align different term insurance plans with different financial responsibilities.

This approach allows your insurance cover to gradually reduce as individual responsibilities are completed.

Example

Suppose a 32-year-old individual has:

• A home loan of ₹1 crore with a remaining tenure of 20 years.
• Two young children.
• A working spouse.
• Mutual fund investments that are expected to grow over the next 25 years.

"Instead of purchasing a single ₹3 crore policy for 35 years, the individual may consider":

As each financial responsibility ends, one policy expires while the remaining policies continue to provide protection.

This is one possible planning approach. The number of policies, cover amount and policy term should always be based on your financial responsibilities, long-term goals and underwriting eligibility.

Source: MoSPI, Household Consumption Expenditure Survey 2023-24

The implied annual figures represent average household consumption expenditure. Individual households may also need to account for financial obligations such as home loans, future education funding, emergency reserves and other long-term financial commitments when assessing their protection needs.

Insurers apply an income multiple during financial underwriting, which caps the sum assured they will issue against your declared income. The multiple varies by age, income band and insurer, and it sits alongside — not instead of — the calculation of what your family actually needs.

The table below applies a 10 to 20 times annual income range to common monthly salaries. It indicates the band within which a proposal is normally considered, not the cover you should buy.

These are indicative ranges derived from the income multiple, not quoted figures. The cover actually offered depends on your age, dependants, outstanding loans, existing life insurance and the insurer’s own financial underwriting limits. Where your calculated need exceeds the multiple your income supports, the shortfall is usually addressed over time as income grows rather than in a single policy.

Term insurance premiums are priced against mortality risk, and mortality risk rises with age. Each year of delay moves you into a higher risk band, and because the premium is fixed at entry, that higher band applies for the whole policy term rather than for a single year.

Two things compound the effect. The likelihood of a medical condition being present at application rises with age, which can add a loading on top of the age-based increase. And a policy bought later runs for fewer years, so the same protection costs more per year of cover received.

The table below shows what the same cover costs at different buying ages, and how many years of protection each purchase buys.

Above illustration is considering Sum Assured ₹1 Crore and coverage of the policy till 60 years of age.

For example: a 25-year-old pays ₹8,909 per annum over the policy term of 35 years for the same cover a 50-year-old pays ₹33,953 for per annum over the policy term of 10 years.

Insurers periodically review premium rates for new term insurance policies. These reviews may be influenced by factors such as changes in mortality experience, reinsurance costs, operating expenses, regulatory requirements and market conditions.

Once an individual retail term insurance policy is issued, the premium generally remains fixed for the chosen premium payment term, subject to the terms and conditions of the policy.

Buying a term insurance plan earlier may therefore provide two advantages:

• Younger applicants generally receive lower premiums because age is an important underwriting factor.
• The premium applicable at the time of policy issuance is generally locked in for the chosen premium payment term, subject to the policy terms and conditions.

A term insurance plan provides financial protection to your family in the event of your death. Riders extend this protection by covering specific risks that you may face during your lifetime.

Rather than viewing riders as optional add-ons, think of them as a way to strengthen your overall financial protection. The right rider can help manage the financial impact of a critical illness, accidental death, permanent disability or provide additional support for your family’s future needs.

Not every rider is suitable for every individual. The right combination depends on your age, health, occupation, family responsibilities, existing insurance cover and financial goals.

What Do Riders Cover That a Term Plan Does Not?

Your base term insurance plan protects your family’s financial future if you are no longer around.

Riders complement this protection by providing living benefits or additional financial support for specific events that may occur during your lifetime.

Choosing the right riders helps create a more comprehensive financial protection plan.

Bajaj Life Family Protect Rider

It’s a Non-linked, Non-participating, Individual, Pure Risk Health Rider.

While a lump sum death benefit provides immediate financial support, many families also require a regular source of income to meet recurring household expenses.

The Bajaj Life Family Protect Rider complements your base life cover by providing additional financial support for eligible family members, depending on the option selected. This helps create greater financial stability by combining immediate financial assistance with continued income support.

Bajaj Life Care Plus Rider Non Linked

It’s a Non-Participating, Non-Linked, Individual, Pure Risk Health Rider.

Insurance is no longer limited to providing financial support after an unforeseen event. It can also help you take better care of your health while you are alive.

The Bajaj Life Care Plus Rider offers wellness-oriented benefits through different variants. Depending on the variant selected, benefits may include:

• Doctor consultations
• Preventive health check-ups
• Diagnostic services
• Pharmacy benefits
• Nutrition consultations
• Fitness benefits, including gym memberships
• Emotional wellness support

The exact services and limits depend on the Care Plus Rider variant chosen.

Why Bajaj Life Offers Multiple Term Insurance Plans?

There is no single term insurance plan that suits every individual.

A salaried professional with a stable income, a business owner, a customer living with diabetes and a young working woman often have different protection needs and underwriting considerations.

Instead of offering a one-size-fits-all solution, Bajaj Life has designed different term insurance plans to address these diverse customer segments. Understanding these differences can help you shortlist the plan that best aligns with your personal and financial circumstances.

Need Help Choosing?

If you’re still unsure which plan is right for you, start by answering these four questions:

• Do you have any existing medical conditions, such as diabetes?
• Are your income documents straightforward or non-traditional?
• Do you want pure protection or a return of premiums at maturity?
• Do you prefer maximum flexibility or a simpler protection plan?

Your answers will usually narrow the choice to the most suitable Bajaj Life term insurance plan.

Buying a term insurance plan involves verifying your identity, financial profile and other information required for underwriting and policy issuance.

The exact documents required to buy Term Insurance vary depending on the insurer, product, age, sum assured, occupation, health profile and underwriting requirements. Most customers will not need to submit every document listed below.

Today, many insurers use digital verification to minimise paperwork, allowing several details to be verified electronically instead of requesting physical documents.

Keeping the necessary information ready before starting your application can make the buying journey faster and smoother.

Why Are Documents Required?

Every document serves a specific purpose during underwriting and policy issuance.

Not every applicant will need to submit additional documents. Depending on your profile and underwriting requirements, the insurer may request further information.

Technology has significantly reduced the need for physical document submission.

Depending on the product, underwriting requirements and your consent, many details can be verified digitally through approved platforms.

Digital verification helps reduce paperwork, improve accuracy and shorten the overall policy issuance process.

The availability of digital verification depends on the insurer’s processes, product and regulatory requirements.

Businesses and other legal entities may purchase certain life insurance products, such as Keyman Insurance or Employer–Employee Insurance, subject to product eligibility and underwriting requirements. Since the policy owner is a legal entity rather than an individual, additional organisational documents may be required during the application process.

The documents requested during the purchase of a term insurance plan help the insurer verify your identity, assess your eligibility and comply with regulatory requirements.

Most customers will only need to provide a standard set of documents, while additional information may be requested in specific situations based on the underwriting assessment. With the increasing use of digital verification, many details can now be verified electronically, making the buying process faster, simpler and more convenient.

Buying a term insurance plan has become significantly simpler with digital onboarding, online verification and technology-enabled underwriting. While the exact purchase journey may vary across insurers, products and underwriting requirements, most applications follow a similar process.

Understanding each stage of the journey helps you know what to expect, complete your application smoothly and make informed decisions.

Should You Buy Term Insurance Online or Offline?

You can buy a term insurance plan either online from the insurer or through a company representative or advisor. The life cover and policy benefits remain the same. The difference lies in the buying experience.

Both online and offline channels provide the same insurance protection. Choose the option that best matches your preferred buying experience and the level of assistance you need.

To avoid delays, complete all requested requirements as early as possible.

If documents, medical examinations or other underwriting requirements are not completed within the timeline specified by the insurer, the application may lapse or be cancelled. In such cases, a fresh application may be required if you wish to proceed with the purchase.

Can You Withdraw Your Application?

Yes.

Before the policy is issued, you may withdraw your application in accordance with the insurer’s process.

Where the premium has already been paid or the BASBA facility has been used, the refund or release of funds will be processed in accordance with the applicable payment mechanism, regulatory requirements and the insurer’s policy.

After your policy is issued, you are entitled to a Free-Look Period, as specified under applicable IRDAI regulations and the policy terms.

During this period, you can review the policy terms and conditions. If you disagree with them, you may return the policy within the applicable free-look period. The insurer will process the cancellation and refund in accordance with the policy terms after making any deductions permitted under the applicable regulations.

Buying a term insurance plan is not the end of your financial planning journey.

Review your policy whenever there is a significant change in your life, such as:

• Marriage
• Birth or adoption of a child
• Taking a home loan
• Starting a business
• Significant increase in income
• Major financial responsibilities

Also check that:

• Your nominee details remain updated.
• Your contact information is current.
• Premiums are paid on time.
• Your life cover continues to reflect your family’s changing financial needs.

• Assess your life cover requirement before comparing plans.
• Read the product brochure and policy terms carefully.
• Disclose all medical conditions, lifestyle habits and existing insurance policies honestly and completely.
• Keep identity, income and bank verification details ready.
• Complete medical examinations promptly, if required.
• Respond quickly to any additional underwriting requirements.
• Review your policy document carefully after issuance.

Key Takeaway

Buying a term insurance plan involves more than selecting a premium. It includes assessing your protection needs, completing the proposal form, undergoing the underwriting process and understanding the possible outcomes of your application. With digital verification, telemedical assessments, home medical services, BASBA and technology-enabled underwriting, the purchase journey has become faster, and convenient for customers.

Understand exactly what is covered and what is not in term insurance. Common exclusions include suicide in the first year, death due to undisclosed pre-existing conditions, or death under the influence of substances. Reading the fine print prevents claim rejection surprises for your family.

A term insurance policy is purchased to provide financial security to your family in your absence. Understanding the claim process in advance can help your nominee or beneficiaries complete the formalities smoothly during an emotionally difficult time.

While the exact process and documentation may vary across insurers and products, most term insurance claims follow a similar journey.

What Types of Claims Can Be Made?

Depending on the policy purchased, different types of claims may arise.

The person entitled to receive the policy benefits depends on how the policy has been structured.

Depending on the circumstances, the claim may be filed by:

• Nominee
• Assignee
• Trustee (for policies issued under the Married Women’s Property Act, where applicable)
• Legal heir (where no valid nominee or assignment exists)
• Employer or policy owner (for Keyman Insurance, where applicable)

Keeping nomination details updated helps avoid unnecessary delays during claim settlement. If a nominee dies before the life assured, the policyholder should update the nomination. Otherwise, settlement may have to be made to the legal heirs in accordance with applicable law.

Section 45 of the Insurance Act, 1938 provides important protection to policyholders and their nominees. Once a life insurance policy has been in force for three years, the insurer generally cannot question the policy on the grounds of misstatement or non-disclosure, except in situations permitted under applicable law, such as fraud.

Section 45 gives policyholders greater certainty, but it does not eliminate the need for honest and complete disclosure at the time of purchasing the policy.

When Can a Claim Still Be Rejected?

Even after a policy has been in force for three years, a claim may be rejected in certain situations, including:

• Fraud: if the policy was obtained through fraudulent means, such as forged documents, impersonation or intentional concealment of material facts.
• Policy not in force: if premiums were not paid and the policy had lapsed or was not revived as per the policy terms.
• Policy exclusions: if the claim falls under an exclusion specified in the policy contract, such as the suicide exclusion period or other applicable exclusions.
• Policy terms and conditions not met: if the claim does not satisfy the terms, conditions or benefits covered under the policy.

Important: Section 45 protects genuine policyholders, but it is not a substitute for truthful disclosure. Always provide complete and accurate information about your health, lifestyle, occupation and financial details while purchasing a term insurance plan.

Source: Insurance Act, 1938 — Section 45

IRDAI has prescribed timelines for claim settlement subject to receipt/completion of required claim documents and requirements, as applicable.

Two things determine how quickly a death claim is paid: the regulatory deadline, and how complete the documentation is when the claim is registered.

Under IRDAI regulations, a death claim requiring no investigation must be settled within 15 days of the insurer receiving the last required document. Where an investigation is required, the deadline is 45 days from the date the claim is intimated. Where an insurer exceeds the applicable period, interest is payable on the claim amount.

In practice most claims settle well inside those limits when the policy is in force, the documentation is complete and the nominee details are current. Delay is almost always a documentation problem rather than a decision problem — a pending death certificate, a bank account mismatch, or incomplete nominee KYC.

A delay does not necessarily mean that a claim will be rejected.

Claims may take longer if:

• Required documents are incomplete.
• Death certificate is awaited.
• Nominee KYC is incomplete.
• Bank account details do not match.
• Police or hospital records are pending.
• Succession documents are awaited.
• Additional information has been requested by the insurer.

Responding promptly to such requests can help reduce processing time.

The easiest claim is one where the family already knows what to do.

You can help by:

• Informing your nominee about the policy.
• Sharing the policy number and insurer’s contact details.
• Keeping nomination details updated.
• Disclosing all information honestly when purchasing the policy.
• Paying premiums on time to keep the policy in force.
• Informing the insurer whenever there are changes in your contact details.
• Keeping important policy documents in a secure but accessible location.

A term insurance claim process exists to get the policy benefits to the rightful beneficiary once the policy terms and supporting documents have been verified. Informing the insurer promptly, submitting complete documentation and maintaining accurate policy records make for a smoother claim settlement.

Buying a term insurance plan is primarily a financial protection decision. While the Income-tax Act, 2025 provides tax benefits for eligible policies, the tax treatment differs depending on whether you are paying the premium, receiving a death benefit or receiving a maturity benefit under a Return of Premium (ROP) plan.

This section explains the tax treatment applicable at each stage of the policy lifecycle. The references below are based on the Income-tax Act, 2025, which came into effect from 1 April 2026.

Tax Treatment at a Glance

If you have opted for the old tax regime, premiums paid towards an eligible term insurance policy qualify for a deduction under Section 123 (previously Section 80C) of the Income-tax Act, 2025, subject to the prescribed conditions. The deduction forms part of the overall annual deduction limit of ₹1.5 lakh available under Section 123.

The same limit is shared with other eligible investments and payments such as:

• Public Provident Fund (PPF)
• Employees’ Provident Fund (EPF)
• Equity Linked Savings Scheme (ELSS)
• National Savings Certificate (NSC)
• Sukanya Samriddhi Yojana
• Principal repayment of a home loan
• Eligible tuition fees
• Eligible life insurance premiums

An individual can claim a deduction for premiums paid towards policies covering:

• Self
• Spouse
• Children

A Hindu Undivided Family (HUF) can also claim the deduction for eligible policies covering members of the HUF.

What Conditions Must Be Satisfied?

To claim the deduction:

• The premium should satisfy the limits prescribed under the Income-tax Act.
• The policy should meet the prescribed eligibility conditions.
• If a policy is terminated or surrendered within the prescribed period, the deduction claimed earlier may become taxable in accordance with the Income-tax Act.

Is the Death Benefit Taxable?

The amount received by the nominee on the death of the life assured is exempt from income tax as per Income-tax Act, 2025 (previously Section 10(10D) of the Income-tax Act, 1961), subject to the prescribed conditions.

This exemption applies irrespective of whether the taxpayer has opted for the old or the new tax regime.

Is the Maturity Benefit of a Return of Premium (ROP) Plan Taxable?

Unlike a pure term insurance plan, a Return of Premium (ROP) plan pays a maturity benefit if the life assured survives the policy term.

The tax treatment of this maturity benefit depends on whether the policy satisfies the conditions prescribed under the Income-tax Act, 2025 (Sum Assured should be atleast 10 times of your annual premium and annual aggregate premium for such policies issued on or after 1^st April, 2023 is less than INR 5 Lakh). If the prescribed conditions are not met, the maturity proceeds may become taxable.

Can My Spouse Claim the Deduction?

If your spouse pays the premium for an eligible policy covering you or other eligible family members, the availability of the deduction depends on the provisions of the Income-tax Act and the ownership and payment conditions applicable to the policy.

Can NRIs Claim Tax Benefits?

NRIs can claim tax benefits under the Income-tax Act, 2025 if they satisfy the applicable conditions. The availability of deductions and exemptions depends on their residential status and the relevant provisions of the Act.

What About Employer–Employee and Keyman Insurance?

Employer–Employee Insurance and Keyman Insurance are governed by separate tax provisions. The deductibility of premiums and taxation of policy proceeds depend on:

• Policy ownership
• Purpose of the policy
• Recipient of the benefit
• Applicable provisions of the Income-tax Act

Businesses should seek professional tax advice before purchasing such policies.

• Can I claim tax benefits if I pay premiums monthly?

  Yes. The mode of premium payment does not affect eligibility. The deduction is based on the eligible premium paid during the financial year.

• Can I claim tax benefits for my parents’ policy?

  No. The deduction under Section 123 is available for policies covering self, spouse and children. It is not available for premiums paid towards a parent’s life insurance policy.

• Is GST on the premium separately deductible?

  No. GST does not provide an independent deduction. The tax treatment follows the applicable provisions governing the premium.

• Can I claim the deduction if I stop paying premiums?

  The tax implications depend on whether the policy continues, lapses or is terminated, and on the applicable provisions of the Income-tax Act.