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.
However, it does not cover situations like death due to self-inflicted harm, participation in illegal activities, or non-disclosure of relevant health conditions.
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:
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.
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:
Aspect | Pure term insurance | Endowment/whole life insurance | ULIP |
Coverage | Provides death benefit only | Offers death cover and maturity benefit | Combines insurance and investment |
Premiums | Low and affordable | Higher due to additional benefits | High due to investment component |
Returns | No returns or maturity value | Guaranteed maturity value | Market-linked returns |
Flexibility | Limited to risk coverage | Fixed benefits and tenure | Customisable investment options |
Primary Purpose | Pure financial protection | Financial protection with savings | Wealth 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.