Importance of Insurance in Financial Planning
Insurance helps protect your finances against unexpected events by providing financial support when you need it most. FundsIndia helps you compare term plans from leading insurers and choose one suited to your income and goals, with a paperless process and support from the same team that manages the rest of your portfolio.
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What is Term Insurance?
Term insurance is a type of life insurance that provides a financial payout to your family if you pass away during a set period. You pay a fixed premium each year, and there's no payout if you outlive the term, which is what keeps the premium low relative to the cover.
Take a term plan with ₹1 crore cover for ₹12,000 a year. If something happens during the term, your family gets the full ₹1 crore, no matter how many premiums were paid.
Term insurance and investments serve different roles in a financial plan. One protects the income you've already earned, the other grows it, and a sound plan makes room for both rather than treating one as more important than the other. At FundsIndia, term insurance isn't treated as a standalone policy sale. It's built into the wealth strategy from the start, around your income and the people who depend on you.
Note: The Premium illustration of ₹12,000/year for ₹1 Crore sum assured is indicative and based on a 25-year-old healthy, non-smoking person for a 30-year policy term under \[Insurer Name & Plan Name\]. Actual premium payable will vary based on your age, gender, tobacco use, health underwriting, and chosen policy term.
Why Term Insurance Matters in Your Financial Plan
Term insurance is an important part of financial planning because it protects your family financially while you build wealth through SIPs and mutual funds.
Complements What Investments Build
Term insurance and mutual funds serve different purposes. One protects your family's future, the other grows your wealth, and a well-rounded plan makes room for both.
Secures Your Family's Future
A term cover payout replaces your income for dependents if you are not around.
Clears Debt Instead of Passing It On
A payout can settle an outstanding home loan or other liabilities, so they don't become your family's burden.
Comes With Tax Benefits
Term insurance premiums qualify for a deduction up to ₹1.5 lakh under Section 80C.
Know Everything About Term Insurance
Before buying term insurance, it is important to understand how it works and what it covers.
Know Everything About Term Insurance
Before buying term insurance, it is important to understand how it works and what it covers.
How Term Insurance Works
Term insurance runs on a fairly simple mechanism from start to finish.
Choose Your Cover and Term
You select a sum assured and a policy term, typically from 5 years up to 25 years or more for regular premium plans, based on your income and financial goals.
Pay a Fixed Premium
Your premium is set once at the start, based on your age, health, and the cover you have chosen, and stays level for the rest of the term.
Stay Covered Through the Term
As long as premiums are paid on time, your family stays covered for the full sum assured for the entire policy term.
Claim Settlement on Death
If you pass away within the term, your nominee receives the full sum assured as a lump sum, which is tax-free under Section 10(10D).
No Payout on Survival
If you outlive the term, the policy simply ends, unless you have chosen a return of premium option. Continuing cover afterward usually means buying a fresh policy at a higher premium for your age at the time.
Documents and Requirements Needed for Insurance
You can use your existing FundsIndia login details or create a new account by providing your basic information.
PAN card
Required for identity verification, policy issuance, and compliance with tax regulations.
ID and address proof
Documents such as Aadhaar, passport, or other valid proofs are required to verify your identity and residential address.
Income proof
Salary slips or ITR are used to set your eligible cover.
Medical tests
Sometimes required, depending on age and cover amount.
Steps to Get Term Insurance Through FundsIndia
Log In
You can use your existing FundsIndia login details or create a new account by providing your basic information.
Enter Your Cover Requirements
Enter your desired cover amount and policy term based on your income and goals.
Get an Insurance Quote
Get your term insurance quote as per your requirements.
Compare and Choose
Enter the requirements to view specific policy recommendations and quotes from top providers.
Make Secure Payments
Pick your preferred plan and complete the payment process securely through the integrated payment gateway.
Manage and Track
Have access to your policy documents, renewal dates, and claim support straight through your integrated user dashboard.
How Term Insurance Works
Choose Your Cover and Term
You select a sum assured and a policy term, typically from 5 years up to 25 years or more for regular premium plans, based on your income and financial goals.
Pay a Fixed Premium
Your premium is set once at the start, based on your age, health, and the cover you have chosen, and stays level for the rest of the term.
Stay Covered Through the Term
As long as premiums are paid on time, your family stays covered for the full sum assured for the entire policy term.
Claim Settlement on Death
If you pass away within the term, your nominee receives the full sum assured as a lump sum, which is tax-free under Section 10(10D).
No Payout on Survival
If you outlive the term, the policy simply ends, unless you have chosen a return of premium option. Continuing cover afterward usually means buying a fresh policy at a higher premium for your age at the time.
Documents and Requirements Needed for Insurance
PAN card
Required for identity verification, policy issuance, and compliance with tax regulations.
ID and address proof
Documents such as Aadhaar, passport, or other valid proofs are required to verify your identity and residential address.
Income proof
Salary slips or ITR are used to set your eligible cover.
Medical tests
Sometimes required, depending on age and cover amount.
Steps to Get Term Insurance Through FundsIndia
Log In
You can use your existing FundsIndia login details or create a new account by providing your basic information.
Enter Your Cover Requirements
Enter your desired cover amount and policy term based on your income and goals.
Get an Insurance Quote
Get your term insurance quote as per your requirements.
Compare and Choose
Enter the requirements to view specific policy recommendations and quotes from top providers.
Make Secure Payments
Pick your preferred plan and complete the payment process securely through the integrated payment gateway.
Manage and Track
Have access to your policy documents, renewal dates, and claim support straight through your integrated user dashboard.
Disclosure: Wealth India Financial Services Limited does not take any liability for the terms, issuance, underwriting decisions, or claims settlement of policies issued by partner insurers Insurance is the subject matter of solicitation. For more details on risk factors, terms, and conditions, please read the sales brochure carefully before concluding a sale. Insurance products are offered through WEALTH INDIA FINANCIAL SERVICES PRIVATE LIMITED (IRDAI Reg. No. CA0199), acting as a Composite Corporate Insurance Agent of Axis Max Life Insurance Limited. Claim Settlement Ratio (CSR): Axis Max Life Insurance reported a Claim Settlement Ratio of 99.70% for FY [2024-25] as per the IRDAI Annual Report. Tax benefits are subject to conditions under applicable sections of the Income Tax Act (Deduction on premium paid under Section 80C and tax exemption on death benefit under Section 10(10D) of the Income Tax Act, 1961 / corresponding provisions under the Income Tax Act, 2025). Tax laws are subject to change.
Who Should Prioritise Term Insurance?
Term insurance matters most for these groups, though the reasons differ for each.
Salaried Professionals With Dependants
Term insurance keeps your family secure if something happens to you.
First-Time Investors
Getting term cover first means an emergency won't break your SIPs later.
Parents and Breadwinners
A term payout can replace your income for education costs or EMIs.
Self-Employed Individuals
Term cover protects your family's income without relying on an employer for it.
Disclosure: Wealth India Financial Services Limited receives remuneration/referral fee from partner insurers for facilitating insurance applications, subject to the limits prescribed under IRDAI (Payment of Commission) Regulations.
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Frequently Asked Questions
What is term insurance, and why is it important in financial planning?
Term insurance protects your family financially if you die during the policy term. It replaces your income for dependants and keeps long-term investments like SIPs from being disrupted by an emergency.
Why is term insurance usually recommended over other types of life insurance?
Term insurance offers a high cover for a low premium, since it's pure protection with no investment component, which makes it the most cost-efficient way to secure your family's future compared to plans that mix insurance with savings.
Should I buy term insurance before starting a SIP or mutual fund investment?
Yes, it's usually best to purchase term insurance first. That way, an emergency doesn't force you to break your investments early, and your SIP can keep growing undisturbed.
How much term insurance cover does a salaried person need?
A general guideline is 10 to 15 times your annual income, but it will vary based on your loans, dependents, and future needs, such as your child's education.
What is the difference between term insurance and ULIP?
Term insurance focuses purely on life cover, while a ULIP combines life insurance with market-linked investments. Because part of the premium is invested, the structure and benefits differ from a pure term plan.
What is the Free-Look Period?
You have a statutory free-look period of 30 days (for policies sourced electronically/remotely) from the date of receipt of the policy document to review the terms. If you disagree with any terms, you may return the policy stating reasons, subject to deductions for stamp duty, medical exam charges, and proportionate risk cover.
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