Nowadays financial security is everyone’s priority and term insurance has become a basic part of it. But is it the right choice in 2025 or not? If you are wondering whether to take term insurance or not, we will talk about it in detail in this post. As there are changes taking place in the market, like new riders and better payouts, it is important to see whether it is worth it for you or not.
First of all, let us understand what is term insurance. It is a simple life insurance policy which provides coverage for a fixed term, like 10, 20 or 30 years. If there is death during the policy term, the nominee gets a lump sum amount. But if you are alive, there is no payout.
It is popular in India because it is affordable and offers high coverage. In 2025, companies like HDFC Life and Bajaj Finserv are adding new features, such as health integrations and flexible premiums, which are making it even better.
Key Features of Term Insurance
Now let’s understand the key features of term insurance in a table. These are short specifications that will give you a quick overview:
| Key Features | Description |
|---|---|
| Coverage Amount | Upto ₹1 crore or more, depending on premium |
| Policy Term | 5 to 40 years, flexible options available |
| Premium Rates | Starts from ₹500/month for young adults |
| Tax Benefits | Deduction under Section 80C up to ₹1.5 lakh |
| Riders | Add-ons like critical illness or accidental death cover |
| Payout Options | Lump sum, monthly income, or increasing cover |
These features will be further advanced in 2025, such as AI-based premium calculations that adjust based on your health and lifestyle.
Benefits of Term Insurance
The biggest advantage of term insurance is affordability. A young person can get a cover of ₹1 crore for just ₹10,000-15,000 annual premium. This gives financial protection to the family, like to cover home loan or education expenses. In 2025, the tax benefits have become stronger.
For example, premium can be deducted under Section 80C, which helps in saving your income tax. Apart from this, multiple payout options have come up – lump sum with monthly income or increasing sum assured. All these features have been introduced by companies like Kotak Life, which make the policy more practical.
Disadvantages of Term Insurance
The biggest disadvantage is that if you are alive after the policy term, there is no payout. It is only a death cover, so not suitable for wealth building. Secondly, premiums increase with age – if you buy the policy late, it can be costly.
Thirdly, the coverage is only till the term, after that it has to be renewed, which can be expensive. In India, like in Bajaj Finserv plans, if you do not add riders, risks like critical illness are not covered. And medical tests are mandatory, which lengthen the process.
Is Term Insurance Worth It in 2025?
See, if you are young and have family responsibilities, then yes – this is a smart choice. As per the market trends, term plans are now integrating health benefits, like wellness discounts or free health check-ups. As, in a recent article in New Indian Express, it has been said that in 2025 new trends like better riders and digital claims are coming in term insurance, which enhance the financial benefits.
But if you want a mix of investment and insurance, then ULIPs or endowment plans may be better. Overall, if you want pure death cover and low cost, then it is worth it.
Tax Benefits in 2025
In India, term insurance premiums are deducted under Section 80C, up to ₹1.5 lakh. Payout is also tax-free under Section 10(10D). In 2025, these benefits are still applicable in the government’s new tax regime, which increases your savings.
How to Choose the Right Policy
If you are wondering which policy to choose, compare. For example, check the advantages and disadvantages on PolicyBazaar – high coverage is good in low premium, but no survival benefit. Or you can look at HDFC Life plans, which offer flexible riders.
An important thing – In 2025, term insurance also has limitations like no cash value accumulation and temporary coverage. But if you take it early, these drawbacks can be managed.
After all, taking term insurance is a calculated decision. If you have a dependent family, consider this. For more details, check IndiaFirst Life’s limitations guide, which explains the detailed drawbacks.
FAQs
How much is the premium of term insurance increasing in 2025?
Premiums are based on age and health, but the average starts from ₹500-1500/month for ₹1 crore cover.
What are riders covered in term insurance?
Riders get extra covers like critical illness or accidental death, which can be added to the basic policy.
What happens if the policy term ends?
If you are alive, there will be no payout lta. You can renew the policy but the premium will increase.
How does term insurance help in tax saving?
Premium is deducted under Section 80C up to ₹1.5 lakh, and the payout is tax-free.
Which are the best term insurance companies in 2025?
HDFC Life, Bajaj Finserv, and Kotak Life are the top choices, because of their flexible plans.
