After the government reduced the GST rate on term insurance policies to 0%, many people started including this essential cover in their financial plans - just like preparing a shopping list during festive sales. But unlike shopping discounts, this one safeguards your family's future.
A term insurance policy is the simplest yet most powerful financial tool you can buy. It provides a lump-sum or monthly financial payout to your family if the insured person passes away or becomes permanently disabled. Some modern plans even offer monthly income benefits up to ₹2 lakh for those unable to work due to illness or accident.
This makes term insurance not merely a death cover - it's a comprehensive family protection plan that ensures your dependents can continue living with financial stability even in your absence.
Across the world, financial planning begins with term insurance. Every certified planner, whether in India or abroad, lists this as the first must-have policy before any investments in mutual funds, stocks, or real estate. Even if you pause your investments temporarily, your term plan should never stop - because it's what keeps your financial foundation secure.
Anyone with dependents (spouse, children, or parents)
Individuals with loans or EMIs
Salaried or self-employed people with ongoing financial responsibilities
Simply put, if others depend on your income, you need term insurance.
The ideal coverage should be at least 25 times your annual income. For instance, if your annual salary is ₹10 lakh, opt for a ₹2.5 crore policy. This ensures that your family can maintain their lifestyle and clear debts even without your income.
Choose the policy term until your major financial responsibilities end - typically up to 60 or 70 years of age. Extending it till 100 years only increases premiums without real benefit.
A 25-year-old non-smoker earning ₹10-12 lakh annually can get ₹2 crore cover for around ₹1,000/month.
Smokers, however, pay 70-80% higher premiums for the same cover.
| Company | Claim Settlement Ratio |
|---|---|
| ICICI Prudential Life | 99.17% |
| Tata AIA Life | 99.12% |
| HDFC Life | Slightly higher premium, reliable service |
| Axis Max Life | Affordable and competitive plans |
Buying online adds extra advantages:
5% lifetime discount on premiums
12.5% additional discount for salaried individuals
Tax benefits under Section 80C and 10(10D) of the Income Tax Act And now, with 0% GST, term insurance has become more affordable than ever.
A term insurance plan is not just another financial product - it's your family's safety net. The GST reduction makes this the perfect time to secure your loved ones' future.
As financial experts say:
"Even if you skip an investment, never skip your term insurance - because when your family needs it, it'll already be too late to buy."