What is a Pure Term Insurance?

Discover the core features of pure term insurance plans and how they differ from other policies.
Check Life Insurance Policies
3 min
22-May-2025
A pure term life insurance policy is a straightforward insurance plan designed to provide financial security to your loved ones in the event of your untimely demise. Unlike other life insurance policies, it offers no maturity benefits, making it one of the most cost-effective options for high coverage. This article explains what pure term insurance covers, its premiums, and how it compares to other plans.

What is covered under pure term insurance?

Pure term insurance primarily focuses on financial protection against the risk of the policyholder's death during the policy term. Here is what it typically covers:

Death cover:

Provides a lump sum payout to the nominee if the insured passes away during the policy term.

Optional riders:

Add-ons like accidental death cover, critical illness cover, or waiver of premium can enhance the plan.

Terminal illness:

Some policies include coverage for terminal illnesses diagnosed during the term.

Flexible coverage options:

Allows customisation of coverage amounts to suit individual needs.

Global coverage:

Most policies ensure the payout regardless of the policyholder’s location at the time of death.

However, it does not cover situations like death due to self-inflicted harm, participation in illegal activities, or non-disclosure of relevant health conditions.

How much is the premium for a pure term insurance plan?

Premiums for a pure term life insurance policy are notably lower than other types of life insurance. The exact cost depends on factors like age, health, sum assured, and policy tenure.

For instance, a healthy 30-year-old non-smoker can secure coverage of Rs. 1 crore for a premium starting as low as Rs. 500 per month. Adding riders like critical illness or accidental death covers may increase the premium. To get the suitable rates, compare policies from different insurers and consider buying early to lock in lower premiums.
Comparison between term insurance and other life insurance plans

While pure term insurance focuses on risk coverage, other life insurance plans may offer additional benefits. Here's a comparison:

AspectPure term insuranceEndowment/whole life insuranceULIP
CoverageProvides death benefit onlyOffers death cover and maturity benefitCombines insurance and investment
PremiumsLow and affordableHigher due to additional benefitsHigh due to investment component
ReturnsNo returns or maturity valueGuaranteed maturity valueMarket-linked returns
FlexibilityLimited to risk coverageFixed benefits and tenureCustomisable investment options
Primary PurposePure financial protectionFinancial protection with savingsWealth creation alongside insurance


Can you convert pure term insurance policy to a different policy?

Yes, many insurers allow converting a pure term life insurance policy into another type of plan, such as an endowment or whole life policy, subject to conditions. This feature, known as policy conversion, must typically be availed within a specific timeframe.

Conversion often involves additional premiums and may require underwriting or medical assessments. It is a helpful option for those seeking savings or investment components later in life but should be carefully considered due to cost implications and long-term benefits.

Conclusion

A pure term life insurance policy is an essential financial tool for securing your family’s future at a minimal cost. Its simplicity and affordability make it an excellent choice for those seeking robust protection without investment elements. Compare plans, consider your needs, and consult experts to ensure you choose the right coverage for your financial goals.

Frequently asked questions

What kind of protection does a pure term insurance plan provide?
Pure term insurance provides financial security by offering a lump sum payout to the nominee if the policyholder passes away during the policy term. It primarily covers death benefits, with optional riders like critical illness or accidental death benefits for enhanced coverage.

What factors influence premiums for pure term insurance plans?
Premiums for pure term insurance are based on factors such as the policyholder’s age, health condition, lifestyle habits (e.g., smoking), sum assured, and policy duration. Younger and healthier individuals generally receive lower premium rates. Adding riders may increase the overall premium.

How does pure term insurance differ from other life insurance plans?
Pure term insurance focuses exclusively on risk coverage, offering only death benefits. In contrast, plans like endowment or ULIPs combine insurance with savings or investment benefits, resulting in higher premiums. Pure term insurance is more affordable and ideal for those seeking straightforward financial protection.

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*T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Life Insurance Corporation of India (LIC), Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Company Limited, HDFC ERGO General Insurance Company, TATA AIG General Insurance Company Limited, ICICI Lombard General Insurance Company Limited, New India Assurance Limited, Chola MS General Insurance Company Limited, Zurich Kotak General Insurance Co. Limited , Star Health & Allied Insurance Co. Limited, Care Health Insurance Company Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited and Manipal Cigna Health Insurance Company Limitedunder the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also a distributor of other third-party products from Assistance Services providers such as CPP Assistance Services Pvt. Ltd., Bajaj Finserv Health Ltd. etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective Assistance service provider company.

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