Term Insurance Vs Life insurance: Small Details, Big Differences

Buy a life insurance plan in a few clicks

Now you can buy life insurance plans completely online right here.

  • Icon for Kotak Preferred e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.

  • Kotak E-Invest Plan

    Kotak e-Invest is a comprehensive Unit Linked Life Insurance Plan that can be customized as per your goals and needs - be it protection; investment; financial security for child or retirement planning.

  • Icon for Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and insurance cover against any eventuality.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!

  • Icon for Kotak Preferred e-Term Plan

    Kotak Health Shield

    The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.


Term Insurance Vs Life insurance: Small Details, Big Differences

Buy Life Insurance Now
  • 29th Oct 2021
  • 465

Term Insurance Vs Life insurance: Small Details, Big Differences

When reading about insurance, you may have come across ‘life insurance’ and term insurance’ often, but as different phrases. It may have made you wonder that if term policy is a type of life insurance, What’s the difference between term insurance and life insurance? Let us find out!

What is life insurance cover?

Life insurance is a tool that can be used for financially covering you and your loved ones. With life insurance, a premium is paid regularly, and the sum assured is procured by the nominee in case of the policyholder’s death or by the policyholder themselves after the maturity period. Therefore, such a policy ensures that you get the amount you opted for whether or not something happens to you.

What is a term insurance plan?

A term life insurance plan, as the name suggests, is for a specified period. This means that under such an insurance plan, you are protected for the chosen term period of the policy. There are premium payments here, but you only receive the sum assured in case of the policyholder’s untimely demise during the policy tenure. Though term insurance can be bought physically, it is ideal to purchase online term plans as it allows you to compare and select a plan that best fits your requirements.

While both are types of insurance products and aim at serving the purpose of security to you and your loved ones, there are differences in the policy details based on the premium, the cover, the surrender, the duration.

Difference between Term Insurance and Life Insurance

These features are something that you should keep in mind while buying a new life insurance policy.

  • Premium
  • One of the most critical factors in choosing a policy is its premium, which is often considered directly proportionate to its affordability. In the case of life insurance cover, the premiums are often high about the sum assured. On the contrary, the premiums are relatively low with a term life insurance plan, and they provide a more considerable sum. With both, you can also choose to pay them in single, limited, or regular pay.

  • The duration
  • The duration of active life insurance is usually shorter - it ranges from 5 to 30 years. While for the term insurance, the same goes up from 10 to 45 years, in most cases.

  • Non-payment of premium or surrender
  • In this scenario, life insurance may seem beneficial. If you cannot pay the premium, you will get a paid-up value, which is a reduced amount from the total sum assured based on the premium you have paid. If you choose to give up your insurance, then you will get a specific surrender value. A term life insurance plan in a lot of cases may not have a surrender value.

  • Death benefits
  • It is what your loved ones receive in case of an unfortunate situation. It is a standard feature for both types of insurance products. The only difference is that life insurance will have both a death benefit and maturity benefits and usually the death benefit payout amount is higher in the case of term insurance as that is the sole purpose of the policy.

Having answered what is life insurance cover and what is term insurance, you now know the nuances of each policy, which makes the process of selecting a plan easier and stress-free. So, assess your needs and opt for a plan that meets your requirements!

- A Consumer Education Initiative series by Kotak Life

Also read

  • Health Insurance VS Life Insurance

    There is a difference between life insurance and health insurance. Both cover insured person in different ways. Click here to read what differentiates...

    Read more
    • 15th Nov 2021
    • 298

    Does Life Insurance Policy Cover Covid Death?

    Global health crisis like COVID-19 would have some impact on your life insurance policy acceptance and premiums if you are currently in the applicatio...

    Read more
  • What Should One Expect During the Medical Evaluation for Life Insurance?

    Life is unpredictable and you never know when it may come to an end in an unfortunate incident.

    Read more

Related Plans

  • Kotak e-Term Plan

    Kotak e-Term Plan

    Get protected at less than Rs.19/day with Kotak e-Term Plan. Our term insurance plan combines best-in-class features & comprehensive coverage with...

    Know more
  • Kotak e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan is a pure term insurance plan that provides a holistic life protection at affordable prices. Find out the eligibility criteria, key ...

    Know more