Term Insurance FAQs & Questions Answered

Understanding term insurance policy mechanics prevents coverage errors and ensures prompt claim settlements. Here are direct answers to common questions about term life plans in India.

What is the ideal age to buy term insurance?

The ideal age is between 20 and 30. Purchasing early locks in lower annual premiums for the entire duration of the policy, as mortality charges increase significantly with age.

Can a person hold multiple term insurance policies?

Yes. You can hold policies from multiple insurers. However, you must disclose all existing life insurance coverage and policy numbers on every new proposal form. Non-disclosure of existing policies can lead to claim repudiation.

Is a medical check-up mandatory?

For higher sum assured amounts (typically ₹1 Crore and above) or applicants over age 35, medical check-ups are generally mandatory. Policies issued after comprehensive medical tests offer greater claim security.

What happens if I stop paying premiums?

If premiums are unpaid beyond the 15-day (monthly) or 30-day (annual) grace period, the policy lapses and all life cover terminates. Most insurers allow policy revival within 2 to 5 years upon payment of dues and health declarations.

Are term insurance death benefits taxable?

No. Under Section 10(10D) of the Income Tax Act, the death benefit received by the nominee is fully exempt from income tax.

How does Section 45 protect my policy?

Under Section 45 of the Insurance Act, 1938, no life insurance policy can be called into question or rejected after three continuous years from policy issuance or revival, except in cases of proven fraud.