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Need assistance in choosing the right insurance plan? Get a call from our Expert.

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What is a Pure Term Insurance Plan and Why Should You Invest in One?

A pure term insurance plan is a life cover designed to offer financial protection to the insured person's family in the event of the insured’s death. Investing in pure term insurance offers numerous benefits, including financial security at an affordable premium rate.
 

Insurance

After the onset of a global pandemic, a myriad of health issues have affected the overall human well-being. This has spurred people to secure their lives and buy life insurance plans to protect their loved ones against any eventualities. 
 

Term insurance is one of the simplest and most affordable life insurance plans that can offer extensive financial coverage, ensuring your loved ones are completely protected. One of the most basic and popular types of term plans is pure term insurance.
 

This article outlines all about pure term life insurance and why it is important to invest in one.

Pure Term Insurance Plan Meaning

A pure term insurance plan offers life cover to the insured. Upon the death of the insured, an extensive sum assured/death benefit is paid out to the nominee. 
 

These plans are called pure protection term insurance plans as they provide substantial protection at affordable premiums but do not provide any payouts if the insured individual survives the policy term. 
 

Premiums for this type of insurance plan can be paid regularly, including monthly, quarterly, half-yearly, or yearly instalments. The paid premium is eligible for tax benefits* under Section 80C of the Income Tax Act, subject to prevailing tax norms.

Top Reasons to Invest in a Pure Term Insurance Plan

  1. Provides Financial Security

    A pure term insurance plan secures the financial requirements of your family in case you are no longer around. It is a plan designed to help your loved ones accomplish critical life goals like education, marriage, health expenses, and so on during unfortunate events.

  2. Convenient and Low-cost Premiums

    Among the biggest pure term plan benefits is its availability at affordable premium rates. These plans often come with lucrative cover at low premium costs. The affordability of a pure term insurance plan makes it a preferred choice among many policyholders.

  3. Offers Income Tax Benefits*

    The premium paid by a policyholder for pure term life insurance plans is eligible for tax benefits and deductions. Under Section 80C of the Income Tax Act 1961, the premiums paid by the policyholder are tax exempted for up to Rs. 1.5 lakhs in one year. 

  4. Availability of a Wide Range of Riders#

    You can customise your pure term insurance plan with the addition of riders. For example, one can cover death in case of accidents, using an accidental death rider. The purchase of riders may depend on your choice and current needs. 

  5. Flexible-Premium Payment Option

    The best pure term insurance plans give freedom to the policyholder to pay the premium in a flexible manner depending on the insurer. You can choose from a range of payment options and pay the premium on a monthly, quarterly, and annual basis.

Wrapping Up

A pure term insurance plan serves the primary purpose of providing maximum financial protection in the event of the insured's passing. Investing in pure term insurance offers financial security at an affordable premium and a wide range of optional riders. 
 

The insurance market is flooded with a plethora of term insurance plans, each offering different features. When selecting a pure term insurance plan, it's advisable to choose an insurer with a proven track record in managing policyholder funds and a good reputation in the market.
 

Tata AIA Term Life Insurance comes with long-term coverage that protects you and your family for your entire life. For example, the Tata AIA Life Insurance Sampoorna Raksha Supreme plan gives you an in-built benefit option to receive 50% of the basic sum assured in the event of a terminal illness diagnosis.
 

Visit our website or contact us today to know more.

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

View all posts by Tata AIA Life Insurance

Frequently Asked Questions (FAQs)

What is the difference between term insurance and pure insurance?

Term insurance, often referred to as pure insurance, serves the primary goal of providing a substantial death benefit. The key distinction between a pure term insurance policy and other life insurance plans is that it does not include any maturity benefits.

What are the only benefits typically offered by a pure term plan?

Pure protection term insurance primarily provides compensation to the beneficiary in the unfortunate event of the policyholder's death, with no benefits payable if the insured person survives the policy term.

What factors should I consider when choosing a term life insurance plan?

Some of the factors to consider before choosing a term insurance plan include the claim settlement ratio of insurance companies, critical illness cover, availability of additional riders, and premium cost.

Disclaimers

  • Insurance cover is available under the product.

  • The products are underwritten by Tata AIA Life Insurance Company Ltd.

  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.

  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.

  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.

  • Tax: *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.

  • #Riders are not mandatory and are available for a nominal extra cost. For more details on the benefits, premiums and exclusions under the riders please refer to the Rider Brochure or contact our Insurance Advisor or visit our nearest branch office.