Buy a Life Insurance Plan in a few clicks
Protect your family's financial future.
Insurance and Investment in one plan.
Thank you
Our representative will get in touch with you at the earliest.
Features
Ref. No. KLI/22-23/E-BB/492
Term insurance is an affordable and straightforward option for securing financial protection for a specific period, making it ideal for those with temporary needs or limited budgets.
But, in this competitive insurance world, the question arises: is term insurance a good idea in 2025? Well, the answer is yes! Term insurance is known for its simplicity and effectiveness in providing life coverage and remains a cornerstone of comprehensive financial planning.
Individuals often find themselves at the intersection of financial prudence and future planning. The field of life insurance continually evolves, influenced by economic shifts, global events, and individual circumstances.
Term insurance covers are pure Life Insurance Plans that provide optimum coverage at a minimal cost. In the case of the policyholder’s demise, the insurance company pays the sum assured to the family. With a term insurance plan, the insured and family members can benefit from large coverage at relatively low premiums.
Term insurance can be an excellent choice if you’re looking for affordable, straightforward coverage for a specific period. It’s especially beneficial for those with temporary financial obligations or a limited budget. Let us look at a few reasons to answer the question, “is term insurance good?”
One of the biggest perks of term insurance is that it’s generally cheaper than other types of life insurance. You can get a higher coverage amount at a lower cost, which is great if you’re looking for robust protection without breaking the bank.
The primary reason most people opt for term insurance is to ensure that their family is financially secure if something happens to them. The lump sum payout can act as a financial cushion, helping your loved ones maintain their lifestyle or pay off debts.
You can choose a policy term that aligns with your financial responsibilities. For example, if you have a home loan that will be paid off in 20 years, you might opt for a 20-year term policy. This way, your family won’t be burdened with the mortgage if you’re not around.
The premiums paid for term insurance are eligible for tax deductions under specific sections. In India, for instance, you can claim deductions under Section 80C of the Income Tax Act.
Deciding on the sum assured or life cover requirement is no rocket science. You need to keep a few critical factors in mind that are discussed below:
Your financial liabilities like home loans, business loans, personal loans, and credit card bills are vital factors to consider before buying insurance coverage. In the event of your untimely demise, the repayment burden will fall on your family members, who may face difficulty managing the EMIs and household expenses. To avoid such an unfortunate situation befalling your family, you must choose a term plan with high coverage that meets all your existing liabilities.
Your financial goals play a significant role in deciding the life insurance coverage. The whole purpose of buying a term plan is to protect your family from future uncertainties and provide them with a robust financial cushion to maintain their current standard of living even in your absence.
Also, you must ensure that the payout is large enough to help the family meet necessary expenses like children’s education and marriage, both of which require a considerable amount. Therefore, your term insurance payout must support your family in meeting these expenses.
Term insurance plans offer a straightforward way to safeguard the financial future of your loved ones. Let us take a quick look at the benefits that can answer your question: is term insurance worth it?
Compared to other life insurance options, term plans typically have lower premiums. This makes them accessible to many individuals, including those with budget constraints. The cost-effectiveness of term insurance allows policyholders to achieve significant coverage without straining their finances.
Term insurance is designed to provide pure risk coverage. It focuses solely on providing a death benefit to the nominee in case of the policyholder’s demise during the policy term. Unlike traditional life insurance policies that may have a savings or investment component, term plans do not accumulate cash value. This simplicity ensures that the entire premium paid goes toward securing a substantial death benefit for beneficiaries.
The primary purpose of term insurance is to provide financial security to dependents in the event of the policyholder’s death. The lump-sum payout offered by term plans can be a crucial lifeline for surviving family members, helping them cover living expenses, outstanding debts, and future financial obligations. This ensures the family’s financial well-being is not compromised during challenging times.
Term insurance plans provide tax benefits under Section 80C of the Income Tax Act. Premiums paid for term policies are eligible for deductions up to a specified limit, offering an additional incentive for individuals looking to optimize their tax planning while securing their family’s financial future.
Perhaps one of the most significant advantages of term insurance is the peace of mind it provides. Knowing that your loved ones are financially protected in the event of your untimely demise allows you to focus on your present without undue worry about the future. This peace of mind is invaluable and contributes to overall emotional well-being.
Economic uncertainties, rising healthcare costs, tax planning considerations, and innovative insurance offerings collectively make purchasing a term insurance plan prudent in the current financial scenario. When going through the stages of financial planning, the decision to invest in a term insurance plan in 2025 can provide a solid foundation for long-term security and peace of mind. So, as you decide whether term insurance is good or bad, consider the various advantages it offers and how it fits into your financial planning.
1
Term insurance is a type of life insurance that provides the policyholder with financial protection. If the insured person passes away during the policy period, the company pays the beneficiary the death benefit.
2
Term insurance plans do not cover death caused by self-caused injuries like suicide. Term plans include coverage for death caused by any serious illness. You must mention any illnesses you have when buying a term insurance plan.
3
Accidents are indeed covered by term insurance. In a conventional term insurance policy, the sum assured is paid regardless of the cause of death, including those brought on by illness or accidents.
4
According to the majority of insurance firms, a suitable sum for life insurance is six to ten times the yearly earnings.
5
Term insurance is a fundamental form of protection that offers a death benefit in the event of the policyholder’s untimely passing during the policy term. Term insurance can be purchased by a policyholder from the age of 18 to 65.
6
If you outlive your term insurance policy, there’s no payout. The policy simply expires, and you don’t receive any benefits. Term insurance is designed purely for protection during the policy term.
7
The process typically involves submitting a claim form and necessary documents like the death certificate and policy details. Once the insurer verifies the claim, the payout is usually processed within a few weeks.
8
Yes, you can cancel your term insurance plan. Most policies come with a free-look period (usually 15-30 days) during which you can cancel and get a refund of the premium paid, minus any administrative fees. After this period, you can still cancel but may not get a refund.
9
Yes, the premium paid on term insurance plans is tax-deductible. You can claim deductions under Section 80C of the Income Tax Act up to a specified limit.
1. Tax Benefits on Health Insurance Plans
2. How Much Should I be Paying for Health Insurance?
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Features
Ref. No. KLI/22-23/E-BB/2435
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
Get a Term plan that offers high coverage at low, affordable premiums
