- High coverage at a low premium
- Financial protection for your family’s future
- Tax benefits up to Rs. 46,000`` under Section 80C and 10(10D)
- Dedicated claim assistance
- Customisable plans to suit your needs
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Choosing the right type of term insurance depends on your financial responsibilities, future goals, and the level of protection you want for your loved ones. While all term insurance plans provide financial protection during the policy term, each type offers different features to suit different life stages and needs.
Key takeaways
- Level term insurance offers a fixed sum assured throughout the policy term.
- Increasing and decreasing term plans adjust the cover amount based on changing financial needs.
- Convertible and return of premium plans offer additional flexibility.
- No-cost term insurance provides an exit option with a premium refund at a pre-defined stage, subject to the insurer's terms and conditions.
- Joint life plans help two individuals secure financial protection under a single policy.
Understanding these options can help you compare plans confidently and select one that supports your long-term financial goals.
What are the different types of term insurance policies
Long Term Profit Plan Secrets
The table below explains the most common types of term insurance plans.
| Type of term insurance | How it works | Ideal for |
| Level term insurance | The sum assured remains the same throughout the policy term, and premiums usually remain fixed. | Individuals looking for predictable, long-term financial protection. |
| Increasing term insurance | The sum assured increases at pre-defined intervals during the policy term, helping your cover keep pace with changing financial responsibilities and inflation. | Young professionals and growing families expecting higher financial commitments in the future. |
| Decreasing term insurance | The sum assured gradually reduces over time, usually matching declining financial liabilities such as home loans or business loans. | Borrowers looking to protect outstanding loans. |
| Convertible term insurance | Allows you to convert your term insurance plan into a permanent life insurance plan or another eligible life insurance policy offered by the insurer, subject to the insurer's terms and conditions. | Individuals who may want more comprehensive life insurance protection later. |
| Term return of premium (TROP) insurance | Refunds the eligible premiums paid if you survive the policy term, subject to the insurer's policy terms and conditions. | People who want protection along with the possibility of receiving eligible premiums back. |
| No-cost term insurance | Offers the flexibility to exit the policy at a pre-defined stage and receive eligible premiums back, excluding applicable taxes and charges, subject to the insurer's terms and conditions. | Individuals seeking protection with greater flexibility. |
| Joint life term insurance | Covers two individuals under a single policy, with benefits depending on the selected policy variant and insurer. | Couples or business partners looking for shared financial protection. |
Each type serves a different purpose. Before selecting a policy, compare the available features, policy tenure, premium, and eligibility conditions to choose a plan that aligns with your financial objectives.
Key features of term insurance plans
Here are some common features available across many term insurance plans.
| Feature | What it means |
| Fixed premiums | Many plans offer fixed premiums throughout the policy term, making long-term budgeting easier. |
| High life cover | Since term insurance focuses on protection, it generally offers a higher sum assured compared to many other life insurance products at a similar premium. |
| Flexible policy tenure | You can choose a policy term that matches your financial responsibilities and future goals, depending on the insurer's offerings. |
| Rider options | Many insurers allow you to enhance your cover by adding optional riders, such as critical illness cover or accidental death cover, subject to availability. |
| Pure protection | Standard term insurance plans do not provide maturity benefits unless specifically offered under variants such as return of premium plans. |
| Tax benefits | Eligible premiums earlier qualified for tax deductions under Section 80C of the Income Tax Act 1961, and now under Section 123 of the Income Tax Act 2025 effective from April 01, 2026. However, you get tax benefits on premiums paid only under the old tax regime. Death covers are tax exempted under Section 11 of the Income Tax Act 2025, which replaces the Section 10(10D) of the old Income Tax Act 1961, effective from April 01, 2026. You can claim for tax exempt under both old and new tax regimes. Note: Tax benefits depend on prevailing tax laws and your individual circumstances. Bajaj Finance does not provide tax advisory services. Please consult your tax advisor. |
The exact features available will depend on the insurer and the policy you choose. Always review the policy document before making a decision.
Key benefits of term insurance plans
Choosing a term plan ensures long-term protection at affordable premiums. The key benefits of term insurance include high coverage, financial support for your family, and peace of mind during uncertain times. These benefits also make it a smart choice for anyone looking to secure their future responsibly.
- Affordable coverage: Term insurance provides high coverage amounts at relatively low premiums compared to other life insurance plans.
- Financial security for dependents: It guarantees that your family is financially protected in your absence.
- Flexible policy terms: You can select the term based on your specific financial obligations, such as your children’s education or mortgage repayment.
- Customisable with riders: Additional benefits like accidental death or critical illness cover can be added for enhanced protection.
What should you consider when buying term insurance
The following factors can help you select a policy that matches your needs.
| Factor | Why it matters |
| Coverage amount | Choose a sum assured that can support your family's future financial needs and help cover liabilities such as loans, education expenses, and regular household costs. |
| Policy tenure | Select a policy term that aligns with your major financial responsibilities, such as children's education, home loan repayment, or retirement planning. |
| Claim settlement record | Review the insurer's claim settlement record to understand its claim servicing performance. |
| Premium affordability | Choose a premium that comfortably fits your long-term budget so you can continue the policy without interruption. |
| Optional riders | Consider available riders such as critical illness cover or accidental death cover if they match your protection needs. |
Comparing these factors across multiple plans can help you make a more informed decision before purchasing term insurance.
How to buy term insurance online
Follow these simple steps:
- Visit the Bajaj Finance Insurance Mall and choose the Get Quote option.
- Enter your basic details, including your name, mobile number, date of birth, gender, and email address.
- Provide additional information such as your occupation, income, lifestyle details, and PIN code to view suitable plans.
- Compare the available plans, review the coverage, policy tenure, optional riders, and premium details carefully.
- Select the policy that best suits your financial needs and submit the required documents, such as identity proof, income proof, and medical information, if requested by the insurer.
- After you submit your application, a representative will guide you through the remaining process and help you complete your purchase.
Bajaj Finance Insurance Mall is a digital platform that enables you to compare life insurance plans offered by insurer partners. It does not provide or underwrite insurance policies. Policy issuance, underwriting, and claim settlement are handled by the respective insurer.
Conclusion
Term insurance is a vital financial instrument to ensure the security of your loved ones in your absence. By understanding the various types of term insurance policies and considering key features and benefits, you can make an informed decision. Evaluating important factors such as coverage, tenure, and the insurer's reputation can help you choose the most suitable policy. With the ease of purchasing term insurance online, securing your family’s future is now simpler than ever.
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Frequently asked questions
Types of term insurance plans
What are the different types of term insurance?
Term insurance typically includes level term, increasing term, and decreasing term insurance. Each offers unique coverage options, with level term being the most straightforward, while increasing and decreasing adjust the coverage amount over time to meet specific financial needs.
Which term insurance type is most commonly chosen?
Level term insurance is the most common type, as it offers fixed coverage and premiums throughout the policy term. This simplicity and affordability make it the most popular choice for individuals seeking reliable protection. However, you must choose a term insurance plan that is suitable for your needs.
What are the four main types of life insurance policies?
The four common types of life insurance include level term, increasing term, decreasing term, and convertible term insurance. Each type caters to different needs, from fixed coverage to options for converting into a permanent policy later.
What are the five main types of insurance?
The five major types of insurance are life insurance, health insurance, motor insurance, home insurance, and personal accident insurance. Each serves a distinct purpose, providing protection against different financial risks like illness, accidents, or loss of property.
What does a joint life term insurance plan mean?
A joint life term plan offers coverage for two people under one policy, usually spouses. It pays out either on the first claim or provides continued coverage for the surviving partner, depending on the plan type. It’s a convenient, cost-effective way for couples to secure shared financial protection.
What is meant by single premium term insurance?
A single premium term insurance policy lets you pay the entire premium in one lump sum instead of regular instalments. Once paid, the policy stays active for the full term without further payments. It’s ideal for those who prefer convenience, minimal paperwork, and long-term cover without recurring expenses.
Is it possible to hold more than one term insurance policy?
Yes, you can purchase multiple term insurance policies from different insurers. Many people do this to increase overall coverage, manage changing responsibilities, or diversify benefits. What matters is that your total coverage aligns with your income and financial profile, as insurers assess this before approving additional policies.
How does a return of premium term plan work?
A Term Plan with Return of Premium (TROP) refunds all the premiums you’ve paid if you outlive the policy term. If you pass away during the term, your nominee receives the full sum assured. It blends life protection with a maturity benefit, offering reassurance and value at the end of the policy.
What kind of risks does short-term insurance usually protect against?
Short-term insurance generally covers temporary risks like accidents, health emergencies, travel issues, or asset damage for a limited, predefined period.
Which term insurance plans come with a renewal option?
Renewable term insurance plans allow policyholders to extend coverage after the policy term without undergoing fresh medical tests.
