Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term

Protect Your family’s financial future with Kotak e-Term. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more


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: Understand the Difference and Benefits

Term insurance and life insurance are two different types of insurance policies that provide financial protection to individuals and their families in the event of an unexpected death.

  • Jun 16, 2022

Life insurance policies can be of two types - whole life insurance policy and term insurance policy. There has always been a debate about term insurance vs life insurance. The most important question that may arise is, “should you buy a term plan or whole life insurance?” It is important to understand the features, benefits, and differences between them before making the right decision.

    Key takeaways

  • The premiums paid towards term insurance policies are eligible for tax deductions under Section 80C of the Income Tax Act, 1961.
  • Since term insurance provides coverage for a fixed period of time, the premiums are generally lower compared to other types of life insurance policies.
  • The premium amount is based on several factors, including the age, health, and lifestyle of the insured person, as well as the amount of coverage desired.
  • While whole life insurance can be a good investment for some people, term life insurance is generally the better choice for most people.

With the cost of living skyrocketing by the day, insurance policies come as a blessing as they ensure that our family is secure in the future against an unfortunate event. Accidents or other calamities do not come with a warning. It might not be possible to avoid them, but we can certainly ensure that our family is equipped to deal with their aftermath.

Gone are the days when people thought that insurance was not necessary. Today, it is necessary, not only for you but for your loved ones also. Losing a loved one may be unfathomable, but during such incidents, at least the financial part of the burden can be taken care of by the insurance policy.

Term Insurance vs Life Insurance

Term vs. Life Insurance: An Overview

There are a large number of insurance providers in the market, no matter which type of insurance you are looking to purchase. So, the question of term insurance vs life insurance still remains unanswered. If you opt for a term insurance policy, you can avail of an attractive premium rate for a fixed period of time, but there will be no maturity benefit available in the policy.

On the other hand, if you choose a life insurance policy, then you will be able to enjoy protection for an extended period and get maturity benefits as well. For example, a youngster in their early twenties can initially opt for a term insurance plan to save on the premium amount in the early years and then go for a whole life insurance plan after a few years for a secure future.


Term Life Insurance

Life Insurance


Provides coverage for a specific term.

Provides coverage for the insured’s entire life.


Typically lower but may increase as the insured ages or if they renew their policy.

Typically higher, but remain the same for the life of the policy.

Cash Value

Does not accumulate cash value.

Builds cash value over time, which can be borrowed against or used to pay premiums.

Death Benefit

Pays out a death benefit if the insured dies during the policy term.

Pays out a death benefit whenever the insured dies, as long as premiums are up to date.

Suitable For

People who need coverage for a specific period of time, such as while they have dependents or a mortgage.

People who want coverage for their entire life and may also want to build cash value.

Features of Term Insurance

Term insurance is a type of life insurance that provides coverage for a specific period of time. It is designed to provide financial protection for your loved ones in the event of your untimely death. Term insurance is known for its affordability and simplicity, making it a popular choice among individuals who want to ensure their family’s financial stability without breaking the bank.

Here are some of the key features of term insurance that you should be aware of:

Affordable Premiums

Term insurance is one of the most affordable types of life insurance policies available in the market. Since it provides coverage for a fixed period of time, the premiums are generally lower compared to other types of life insurance policies.


Term insurance policies are highly customizable, allowing you to choose the coverage amount and the term period that best fits your needs. You can also opt for additional riders, such as accidental death benefits, critical illness coverage, and disability benefit, to enhance your coverage.

Pure Protection

Term insurance is a pure protection plan, meaning it only provides coverage in the event of your death. There is no savings or investment component associated with term insurance policies. This makes term insurance an ideal choice for individuals who are looking for affordable and straightforward life insurance coverage.

High Coverage Amount

Since the premiums for term insurance policies are lower compared to other types of policies, you can afford to purchase a higher coverage amount. This is particularly beneficial if you have a large family or dependents who rely on your income.

Tax Benefits

The premiums paid towards term insurance policies are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. Additionally, the proceeds received from the policy are tax-free under Section 10(10D) of the Income Tax Act, making term insurance a tax-efficient investment option.

Features of Life Insurance

Life insurance is a financial product that provides protection to individuals and their loved ones in the event of an unexpected and unfortunate event like death or disability. Life insurance policies are designed to offer financial assistance to the beneficiaries of the insured in case of their untimely demise. While life insurance policies come in various forms, they all share some common features that make them valuable tools for financial planning.

The following are some of the key features of life insurance:

Death Benefit

The death benefit is the amount of money that the insurer pays out to the beneficiary upon the death of the insured person. It is typically paid out tax-free and can be used to cover expenses such as funeral costs, outstanding debts, and living expenses for surviving family members.


These are the payments the policyholder makes to the insurer in exchange for coverage. The premium amount is based on several factors, including the age, health, and lifestyle of the insured person, as well as the amount of coverage desired.

Policy Term

The policy term is the length of time that the life insurance policy remains in effect. It can be a permanent policy that lasts for the insured person’s entire life.


Riders are additional features that can be added to a life insurance policy for an extra cost. Common riders include accidental death and dismemberment coverage, long-term care coverage, and disability income riders.

Drawbacks of Life Insurance

While life insurance can be an important financial tool for protecting your loved ones, there are also some potential drawbacks to consider. Here are four of the most significant cons of life insurance.


The most significant drawback of life insurance is the cost. Life insurance premiums can be expensive, especially for those who are older or have pre-existing medical conditions. The premium payments can be a significant financial burden, especially for those with tight budgets.


Another significant drawback of life insurance is its complexity. Life insurance policies can be difficult to understand and navigate, with many different types of policies and options available. It can be challenging to determine what policy is right for a particular individual or family, and the details of the policy can be difficult to interpret.


Life insurance policies may have exclusions that limit the coverage provided to beneficiaries. For example, if a policyholder dies due to suicide or as a result of a criminal act, the policy may not pay out to their beneficiaries.

Delayed Payment

Finally, life insurance policies may have a delayed payment timeline, leaving beneficiaries without the needed funds in the immediate aftermath of the policyholder’s death. Some policies require an investigation into the circumstances of the policyholder’s death, which can take time, delaying the payment of the policy’s benefits.

Is Term Life Better than Whole Life?

While whole life insurance can be a good investment for some people, term life insurance is generally the better choice for most people. It’s more affordable, easier to understand, and more customizable, and it provides coverage when you need it most. When shopping for life insurance, be sure to compare both term and whole-life policies to determine which one is the best fit for you and your family.


The term insurance vs life insurance debate can go on. There is no right or wrong answer to the question - should you buy term or whole life insurance? No matter which type of insurance you choose, ensure that you do your homework well and understand what both of these insurance policies include and exclude.

Comparing policies online can actually help you understand what is available and what suits you the best. A life insurance policy is very subjective to your personal requirements. Hence, study the available insurers well and make an informed decision by keeping your personal necessities in mind.



What Is the Difference Between A Term Plan And Life Insurance?

The biggest difference between term insurance and regular life insurance is that term insurance only provides a death benefit in the event that the insured dies within the term period. Regular life insurance provides both death and maturity rewards to the insured.


Term Insurance or Whole Life Insurance - Which Is Better?

Comparing a whole-life policy to a term-life policy has numerous advantages because a whole life policy is permanent, includes a cash value investment component, and offers additional options for long-term financial protection for your family.


At What Age Should I Buy Term Insurance?

Since people do not yet have many responsibilities and the premiums offered by the insurance companies are on the cheaper side, it is always advantageous to purchase life insurance when one is in their early 20s.


Can I Get my Money Back with Term Insurance?

Plans for term insurance do not provide maturity benefits. However, with a term insurance plan with a return of payment, the policyholder can receive a full refund if they live longer than the policy term.


Are Premiums of Life Insurance Plans Flexible?

Both savings advantages and a death benefit are provided by whole life insurance. When you choose to terminate (surrender) the policy, you receive a lump payment. The policy is valid for your entire life. Additionally, you can determine the frequency of your premium payments and withdrawals with whole life insurance policies.

Kotak e-Term

Download Brochure


  • Life Cover till 85 years for Life & Life Secure Option
  • 3 Payout Options
  • Special Rates for Women
  • Option to exit the policy with premium refund at the age of 60*
  • Special Rates for Non-Tobacco Users
  • Free Medical Check Up every 5th year**

Ref. No. KLI/22-23/E-BB/2435


- A Consumer Education Initiative series by Kotak Life

Similar Articles

Is Term Life Insurance Plan an Investment or Expense?

What is a Joint Term Insurance Plan? Key Benefits of Joint Term Plan

Is term Insurance Needed for People With No Dependents?

Planning For Children's Future

All about Online Income Tax Calculator

Term Insurance Claims – Make Sure Your Claims Are Never Rejected

What Happens to Term Insurance Plan With No Beneficiary - Kotak Life

Why should single women purchase term life insurance?

Importance of Term Insurance at Every Stage of Your Life

What is a short term insurance policy?

Protection for your family

Insuring yourself against Ill Health with a Critical Illness Rider

Should You Buy a Term Plan After 40?

Why Should You Not Take A Term Plan Without Medical Test in India?

Key IRDAI Regulations That Changed Face Of Term Insurance Industry In 2020

Gift Your Father A Term Insurance Plan This Father's Day

What Is a Renewable Term Insurance Policy?

Tax Benefits of Term Insurance in India

Do You Need Term Insurance Cover After Retirement?

Term Insurance: What Happens When You Don’t Pay Your Premiums?

Eligibility Criteria for Buying Term Insurance in India

4 Methods to Calculate How Much Term Insurance You Need

Ensure Protection Against Death, Disease & Disability With Life Insurance

Does Your Term Insurance Plan Cover Death Due to COVID-19?

Why Term Insurance Is Important in times of COVID-19?

Term Insurance: Smokers vs Non-Smokers

Zero Cost Term Insurance Plan: What is & Should you buy it?

Term Insurance Plans and Policies for Smokers

Why Should You Buy Term Insurance in 2022?

Reasons You Need Term Insurance Plan as a Self-Employed Person

How To Evaluate Your Term Insurance Quote?

What are incremental term insurance plans?

कोविड -19 बूस्टर खुराक के दुष्प्रभाव

Can You Increase Your Term Insurance Cover?

How Does Term Life Insurance Work? Learn the Benefits

Which Death Type Does Your Term Plan Not Cover?

How Not To Get Your Term Insurance Claim Rejected

Which Term Insurance to Choose: Lump Sum or Staggered Pay-out Plan?

Insuring Against Accidents with an Accidental Death Insurance Rider

Is ₹1 Crore Term Insurance Good Enough Cover?

4 Reasons Why You Need Critical Illness Cover

Difference between Section 80C and 80CCC of the Income Tax Act, 1961

What All Documents Required For Term Insurance In India?

Everything About Claim Settlement Ratio for Term Insurance

What is Form 16, Form 16 part A, Form 16 part B, Information Required and FAQs

11 Types of Death not covered in Term Insurance Plans

Why Buy Term Insurance Even at Rising Rates?

What Should You opt for - Limited or Premium Pay?

10 Ways to Mentally Refresh After a Stressful Day

What is Term Insurance? Term Plan Meaning and Definition

10 Ways to Get Your Kids Involved in Your Healthy Lifestyle

Busting Myths and Facts About Term Insurance Policies

Why Buy Term Insurance Plan With a High Cover?

While Buying Term Insurance Compare Features, Not Just Premiums

Comparing Term Plans – What Should You Look Out For

5 Benefits of Early Retirement Planning

9 Ways to Help Family Members in Financial Trouble

Term Life Insurance Plan for Smokers vs Non-Smokers

Is Life Insurance Investment Worthy Enough

Term Insurance with Critical Illness

What Is the Correct Age to Buy Term Insurance?

How to Compare Term Insurance Online

How To Change The Nominee in Term Insurance?

Top 3 Reasons Why You Should Buy A Term Plan Now

What is a term insurance plan with a return of premium, and how does it work?

Why Surrendering Your Term Plan Policy In The Final Phase Maybe A Bad Idea?

Why does every working women need life insurance?

Steps on How to Buy Term Insurance Online

All About Term Insurance Inbuilt Coverage

How To Calculate The Amount Of Term Life Insurance You Need?

What Types of Deaths Are Covered in a Term Insurance Plan?

Why is it important to buy term insurance plan?

What Are Insurance Riders and How to Choose Them in a Term Plan?

क्या ₹1 करोड़ का टर्म इंश्योरेंस पर्याप्त कवर है?

Why Should New Parents Buy Term Life Insurance?

Term Insurance: Most Common Term Insurance Myths Explained | Kotak Life

Can a Housewife Buy a Term Insurance Plan - All You Need to Know

Term Plans are Definitely Cheaper than You Think!

Make Your Online Term Plan Your Family's Monthly Pay Cheque

Why You Must Include In Your Financial Planning?

Can I Make Changes to My Term Insurance Policy Post Purchase?

10-Year Term Life Insurance Policy - Explained in Detail

Do Beneficiaries Pay Taxes on Term Insurance?

Should Youngsters, Working Couples Buy Term Insurance Plans?

All you need to Know about Term Insurance Plans for housewives

Different Types of Premiums in Term Insurance?

Can Non-Resident Indians (NRIs) Buy Term Insurance In India?

How To Choose the Right Term Insurance Plan?

Term Plan with Spouse Cover

Planning For Son or Daughter's Wedding

Difference Between Term Insurance and Endowment Plan

Endowment Plans vs Term Plans: Understanding the difference

Why 1 Cr Term Plan Is Necessary For Family?

5 Reasons to Buy Term Insurance When You are in Your 30s

Know How to Invest at Every Age for Larger Returns

6 Reasons That Make Term Insurance a Must Buy

Make Your Online Term Plan Your Familys Monthly Payout

Is There Any Tax Benefit on Term Insurance?

Why Term Plan Should Be The First Step To Securing Your Future?

What Happens if you Hide Facts in your Term Insurance?

भारत में गृहणियों के लिए टर्म इंश्योरेंस

8 Factors to consider before choosing a Critical Illness Insurance

Should you buy a Renewable Term Life Policy?

How Much Term Life Insurance Cover Do I Need?

Why Spending Time with Friends is Essential for Your Mental Health?

Should you have more than one nominee in your term insurance?

Is It Good To Buy A Term Insurance Plan In 2022?

Term Insurance Basics You Should Know

Calculating Term Insurance Premium

Side Effects of Covid-19 Booster Doses

Do I Need to Give a Medical Test for Term Insurance in India?

भारत में जीवन बीमा कितने प्रकार के होते हैं?

Why Term Insurance Is Better Than ULIP?

How Much Cover Should I Take In A Term Plan?

टर्म इंश्योरेंस क्या है? टर्म इंश्योरेंस का मतलब

Term Vs. Whole Life Insurance: Which One You Should Buy in India?

Choosing Riders for Insurance Plans

Term Insurance With Riders In India

What is Insurance Premium - A Detailed Guide

Different Types of Protection Plans

Understanding Term Insurance Riders

5 Reasons to Have a Child Education Plan

Why Buying a Term Plan Is Smarter Than Traditional Life Insurance Products

Key Differences Between Term Insurance, ULIPs, And Health Insurance

Ideal Features of a Suitable Term Plan - Act Now for a Stress-free Future

3 Things to Consider When Buying Term Insurance, If You are Single

What is Critical Illness Policy?

Tips to Choose the Right Term Period for Term Insurance Plan

Is a Term Insurance Policy Portable?

Buying A Term Insurance? Don't Ignore the Claims Settlement Ratio

Advantages of Buying Term Insurance in Your 50s

How Does Term Life Insurance Work? Learn the Benefits

6 Types of Death not covered in Term Insurance Plan

How to Identify Term Insurance According to Your Needs?

9 Most Frequently Asked Questions on Term Insurance

Can I Get Term Insurance on Behalf of My Spouse?

Why Should You Add a Rider to a Term Insurance Plan?

Is Group Term Life Insurance Provided By Employer Sufficient?

Should You Have Multiple Term Life Insurance Policies?

Do term insurance policy have a waiting period after buying?

Can I Buy Term Insurance for a COVID-19 Patient?

Why Premium Amount for Term Insurance is So Low?

How To Choose the Right Sum Assured Under a Term Plan?

Joint vs Individual Term Insurance: Which One Should You Choose?

Increasing Term Insurance and Riders

What Is a Passive Income? Why Should You Use It to Buy a Term Plan?

Can Term Insurance Plans Be Purchased As A Gift?

Term Insurance Calculator - Everything You Need To Know

Insuring Protection Against Death With Death Insurance Rider

What is the Right Term Period For Term Insurance Policy? Here's How You Should Choose!

8 Things To Do After Buying Term Insurance

Individual Life Insurance vs. Group Term Life Insurance

Can Senior Citizens Avail Term Insurance?

How to Buy ₹1 Crore Life Insurance Policy Without Medical Test?

Does Term Insurance Cover Accidental Death?

जीवन बीमा पॉलिसी लेने की प्रक्रिया क्या है?

Insuring Against Disability With Disability Insurance Rider

टर्म इंश्योरेंस बनाम लाइफ इंश्योरेंस: अंतर और लाभ समझें

Is it a Good Time to Buy Term Insurance During the COVID-19 Pandemic?

Term Insurance Age Limit – Term Plan for All Age Groups

What are the Tax Benefits of Sukanya Samriddhi Yojana (SSY)?

4 Things To Expect From Your Term Insurance Plan in India

How to Surrender Term Life Insurance When You Have No Liabilities?

How Much Term Life Insurance Cover Do I Need in India?

Advantages & Disadvantages of Term Insurance in India

Why Married People Should Buy Term Insurance Under MWP Act?

8 Benefits of Term Insurance You Should Know

What Are the Best Term Insurance Plans for Planning Retirement?

What are the Documents Required for Term Insurance Plan?

9 Point Guide on how to File Income Tax Return Online

How Does BMI Affect Your Term Insurance Premium?

Online vs Offline Term Insurance: Which Is The Better Option To Buy

Can I Extend the Tenure of My Term Insurance Plan?

5 Things To Consider While Buying Term Insurance Plan

Insurance Policy for Housewife In India

5 Term Insurance Benefits for Single Women

Are The Add-ons and Optional Features of Term Insurance Plans Actually Beneficial?

Buying A Term Insurance Plan? Take These Factors into Account

What Should Be The Duration Of Your Term Plan in India?

How do I Calculate My Term Insurance Premium

When is the Right Time to Buy Term Life Insurance Policy for Yourself?

Cost of Term Insurance Likely to Increase Soon

How to Buy 1 Crore Life Insurance Policy Without Medical Test