Is Term Insurance a Pure Risk Protection Cover?

Yes, term insurance is a pure risk protection plan. When you buy a life insurance policy like endowment Plans, you get maturity and death benefits. A term insurance plan only offers death benefits. There are no survival benefits.

By offering term insurance, insurers cover the risk of untimely death of policyholders. Term insurance is beneficial to both policyholders and insurers. You can get a higher sum assured at affordable premiums. Nominees get the death benefits if the policyholder dies within the policy tenure. If not, nothing is paid.

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Is Term Insurance a Pure Risk Protection Cover?​

Financial Protection for Family is Important, is it Not?

• A term insurance policy is pure risk cover. It helps the dependents of the policyholder; settle financial obligations; including home and education loans if the policyholder dies within the term of the plan.
• Smokers spend hundreds of rupees each month on smoking, but forget to buy term insurance for their families. The smoker also pays a higher premium for term life plans. For instance, a 30-year-old non-smoking male can buy a term insurance policy with a sum assured of Rs 1 Crore; paying a yearly premium of just Rs 10,000 or something in that range. A smoker would have to pay much more.
• When it comes to protection and savings, families come first. Imagine the life of your loved ones in your absence. The only solution you have is to avail a term life plan to protect loved ones.

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Prime Benefits of Term Insurance as a Pure Risk Protection Plan

• Term insurance offers a high amount of flexibility. As an insured, you can choose the sum assured, the policy term, and the payout option according to your needs.
• More importantly, term insurance is offered with riders, which include hospital cash, accidental death benefit, waiver of premium, permanent and total disability and critical illness riders. These riders will give policyholders additional benefits.
• Term insurance is simple to understand and easy to avail online. Compare term life insurance plans and then select the right plan.
• Term insurance policies are tax-saving plans. Under Section 80C of the IT Act, 1961, the insurance premium is tax-deductible up to Rs 1.5 Lakh a year; and under Section 10 (10D), the payout of the term life policy is fully tax-free.

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If you invest in stocks, bonds, post office schemes and real estate, you could get good returns. The amount of money you earn depends on several factors. There is a possibility that you could incur losses.

Term insurance is not for making a profit. It is for someone willing to offer financial protection to dependents, even in his absence. This is the basic difference between term insurance policies and investment plans. Even people with limited income can avail term life insurance plans.

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