What is a term insurance policy?

Among insurance covers, a term insurance is ideal especially at the beginning of one's career till a large enough asset base is created.

ET CONTRIBUTORS|

Updated: Jul 01, 2019, 10.56 AM IST

Getty Images

The proceeds are tax-free in the hands of the beneficiary.

1. Term insurance is a pure insurance policy without any savings or investment component. 

2. It has the lowest premium as compared to other life insurance policies. It provides a death cover with no survival benefits. 

3. The beneficiary receives the sum assured only if the insured dies within the policy period. The proceeds are tax-free in the hands of the beneficiary. 

4. Term insurance is an ideal risk cover especially at the beginning of ones’ career till a large enough.