Term life insurance or term assurance is life insurance that provides coverage at a fixed rate of payments for a limited period of time, the relevant term. After that period expires, coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments or conditions. If the life insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is typically the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.
WHY YOU SHOULD BUY LIFE INSURANCE?
If you buy term life insurance, as the premium is more you get more benefit u/s 80C of the Income Tax Act while investing. Additionally, it also yields tax-free income when the maturity claim is paid. However, it needs to be pointed out that while premium paid for term insurance is much less it is also eligible for tax benefit u/s 80C.
The premium for term insurance is much lower than that for comparative cash value policies. For example, currently it is possible for a 30-year old person to buy a level term insurance policy of 20 years for Rs 10 lakh sum assured for about Rs 3000 annual premium.