Term insurance is one of the most important steps in financial planning. It acts as a financial safety net for your family when you are no longer around. Among the different types of life insurance policies available, term life insurance is the most popular because of its simplicity and affordability. However, understanding the policy document can be challenging due to complex jargon. If you're planning to buy term insurance, it's essential to understand the key terminologies used in the policy. This helps you make better decisions and stay fully aware of what you are signing up for. Here's a simplified list of commonly used term insurance terminologies for your help. Term insurance is one of the most important steps in financial planning. It acts as a financial safety net for your family when you are no longer around. Among the different types of life insurance policies available, term life insurance is the most popular because of its simplicity and affordability. However, understanding the policy document can be challenging due to complex jargon. If you're planning to buy term insurance, it's essential to understand the key terminologies used in the policy. This helps you make better decisions and stay fully aware of what you are signing up for. Here's a simplified list of commonly used term insurance terminologies for your help. #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply By clicking on "View plans" you agree to our Privacy Policy and Terms of use ++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ Term Insurance Terminology Term insurance terminology refers to some of the specific vocabulary used to describe a life insurance plan that provides life coverage for a set period, generally called the policy term. This coverage provides a death benefit to nominees/beneficiaries if the life assured dies during the policy term. The accidental death benefit rider provides an extra payout in case the life assured dies due to an accident. This is paid in addition to the base sum assured. For example, if your policy covers ₹1 crore and you have a ₹50 lakh accidental death rider, your nominee may receive ₹1.5 crore if death occurs due to an accident. The accidental disability rider provides financial support if the life assured suffers a total and permanent disability due to an accident. Depending on the terms, this benefit may be paid as a lump sum or in regular instalments. It helps replace lost income and manage lifestyle changes due to disability. A term insurance claim is the formal request made by the nominee to the insurance company after the death of the life assured. The insurer reviews the request and, if all conditions are met, pays the sum assured. The Claim Settlement Ratio indicates how many claims an insurance company has settled against the total claims received in a year. A higher claim settlement ratio (CSR) suggests better reliability and trustworthiness of the insurer. A critical illness rider offers additional protection by paying a lump sum amount if the life assured is diagnosed with a serious illness listed in the policy, such as cancer, heart attack, or stroke. This benefit helps cover treatment costs and loss of income during recovery. The payout is made on diagnosis and does not depend on death. Commencement date is the date on which the term plan comes into force. It is the date from which the life coverage is available to the life assured. Death benefit is the amount that the nominee receives if the life assured dies during the policy term. It is usually equal to the sum assured, but may be higher if additional riders are included. Dedicated Claim Assistance is a specialised support service offered by Policybazaar that helps nominees or families smoothly file and process claims after the death of the life assured. These are specific situations or causes of death that are not covered under the policy. Common exclusions include death due to suicide in the first year, participation in hazardous activities, or death due to intoxication. Financial Surrogates is a concept where the insurer will require you to present the credit card bills, bike or car registration documents. This will act as proof of income for individuals The free look period is a short time frame (usually 15 to 30 days) during which the policyholder can cancel the policy without any penalty if they are not satisfied with the terms of the policy. Grace Period refers to the extra time given (usually 15–30 days) to pay the premium after the due date without losing the policy benefits. If the premium is paid within the grace period, the policy continues without lapsing. HLV stands for Human Life Value. The HLV calculator helps estimate the ideal sum assured for term insurance based on income, expenses, liabilities, and goals. It ensures that your family’s lifestyle is maintained even in your absence. The life assured is the person whose life is covered under the insurance policy. If this person passes away during the policy term, the sum assured is paid out. In many cases, the life assured and the policyholder can be the same person. Maturity benefit is the amount paid to the policyholder if they survive the policy term at the end of the term. However, most pure term insurance plans do not have a maturity benefit, as at the end of the maturity date , the policy terminates, since they are designed only for life cover. MWP Act stands for Married Women’s Property Act . If a term insurance policy is bought under this act, the payout goes only to the wife and/or children and is legally protected from creditors or business liabilities. The nominee is the person selected by the policyholder to receive the policy benefits in case the life assured dies during the policy term. The nominee is usually a close family member like a spouse, child, or parent. Premium payment modes define how the premiums are paid. There are three common types: Regular Pay: Regular premiums are paid throughout the policy term. Limited Pay: Limited pay premiums are paid only for a few years, but the policy continues for the full term. Single Pay: A one-time premium is paid at the time of policy purchase. If the premium is not paid even within the grace period, the policy becomes inactive or “lapsed.” A policy lapse means there is no coverage, and the nominee won't get the benefit unless the policy is revived. A lapsed policy can be brought back to life by paying the due premium and applicable charges. The revival period during which you can revive your policy is subject to conditions and time limits set by the insurer. Policy term refers to the duration for which the insurance policy remains active. The policy term can range from a few years to several decades. If the life assured dies within this period, the insurance company pays the claim amount. The policyholder is the person who buys the term insurance policy and pays the premiums. This person owns the policy and has full control over it, including the right to choose the nominee or cancel the policy. Riders are extra features or add-ons that can be added to a base term insurance policy for enhanced protection. Important term insurance riders include critical illness cover, accidental death benefit, and premium waiver on disability. Sum assured is the fixed amount that the insurance company agrees to pay to the nominee if the life assured dies during the policy term. It acts as the financial safety cover promised by the policy. Surrendering a policy means voluntarily ending it before the end of the term. Term plans usually don’t have a surrender value unless it's a return of premium variant. A terminal illness benefit pays the full or part of the sum assured in advance if the life assured is diagnosed with a terminal illness (a condition that is likely to lead to death within a short time, such as advanced cancer). This is also called an accelerated death benefit and helps the policyholder manage medical and personal expenses in the final stages of life. Premium is the amount that the policyholder pays to the insurance company to keep the policy in force. Premiums can be paid regularly (monthly, quarterly, annually) or all at once, depending on the plan. The waiver of premium rider ensures that all future premiums are waived off if the policyholder becomes permanently disabled or critically ill (as per policy terms). The policy remains active, and the life cover continues without the need to pay further premiums. Why Understanding Term Insurance Terminologies is Important? Many people choose a term plan based only on price. But the right approach is to understand what the policy offers, and for that, knowing the term insurance terminology is essential. Being familiar with these terms ensures: Better comparison between policies Clarity on what is covered and what is not Smarter decisions about add-ons and features Confidence during the claim process Better understanding of policy documents How Does Term Insurance Work? Let’s say you buy a ₹1 crore term insurance and choose your spouse as the nominee. You are the policyholder and also the life assured. If something happens to you during the policy term, your spouse can claim the death benefit. If you added a rider like an accidental death benefit, your family might receive more than ₹1 crore, depending on the conditions of the rider. Why Buy Term Insurance Plans? Now that we have understood the different term insurance terminology, here is what is term insurance and why you should buy term insurance plans: Affordable premiums starting at just Rs. 400 per month Pay off the remaining loans and debts you may leave behind Income replacement for your family in your absence Add optional riders to enhance the base cover of the policy Tax benefits as per the prevailing tax laws u/s 80C and 10(10D) Choosing the right policy becomes easier when you understand the key term insurance terminology. Still Confused? We’re Here to Help If any of these term insurance terminology seem confusing, Policybazaar insurance advisors are just a call away. We can help you choose a plan based on your needs, income, and family size. Understanding basic term insurance terminologies can make a big difference in how you choose, use, and benefit from your life insurance policy. Take the time to read and understand these terms, as understanding them can help you make an informed decision. Q1. What is the difference between sum assured and death benefit? Ans:The sum assured is the base amount fixed in the policy, while the death benefit is the total amount the nominee receives, which may include rider payouts. Q1. What is the difference between sum assured and death benefit? Q2. Can I change my nominee after buying the policy? Ans: Yes, you can update the nominee by informing your insurer and submitting a written request. Q2. Can I change my nominee after buying the policy? Q3. What happens if I miss paying the premium? Ans: The policy may lapse if the premium is not paid within the grace period. However, many insurers offer revival options. Q3. What happens if I miss paying the premium? Q4. Are riders mandatory in term insurance? Ans: No. Riders are optional, but they offer added protection and are worth considering if you want more comprehensive coverage. Q4. Are riders mandatory in term insurance? ˜ The insurers/plans mentioned are arranged in order of highest to lowest Sum Assured(SA) offered by Policybazaar’s insurer partners offering term insurance plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in +On the basis of your profile +Rs. 410/month is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10 +Rs. 410/month (Rs.14/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age rounded off to nearest 10 +Rs. 245 is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age. +Rs. 8/day is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10 +Rs. 15/day is starting price for a 75 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10 +Rs. 504/month is starting price for a 1.5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age. +Rs. 494/month is starting price for a 2 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age. +Rs. 636/month is starting price for a 3 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age. +Rs. 918/month is starting price for a 5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age. +Rs. 1,286/month is starting price for a 7 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age. +Rs. 453/month is starting price for a 1 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age. +Rs.582/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age. +Rs. 786/month is starting price for a 3 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age. +Rs. 1,374/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age. +Rs. 1,592/month is starting price for a 7 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age. +Rs. 525/month is the starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 68 years of age. +Rs. 668/month is starting price for a 2 crore term life insurance for an 25 year-old male, non-smoker, with no pre-existing diseases, cover upto 45 years of age. +Rs. 1,200/month is starting price for a 2 crore term life insurance for an 35 year-old male, non-smoker, with no pre-existing diseases, cover upto 55 years of age. +Rs. 410/month is starting price for a 1 crore term life insurance for an 18 year-old Female, non-smoker, with no pre-existing diseases, cover upto 30 years of age. +Rs. 577/month is starting price for a 1 crore term life insurance for an 18 year-old Male, self employed, non-smoker, with no pre-existing diseases, cover upto 30 years of age. *The full refund of premium is available on availing the one-time option of refund of premium. Total premium paid for policy (paid for add-ons) will be the special exit value, payable on availing the one-time option of refund of premium if you wish to completely exit the policy. +Rs. ₹361/month is the starting price for a ₹1 crore loan cover with an 8% interest rate for an 18-year-old male, non-smoker, with no pre-existing diseases, loan tenure up to 20 years, rounded off to the nearest 10 Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881 For more details on risk factors, terms and conditions , please read the sales brochure carefully before concluding a sale

Policybazaar Insurance Brokers Private Limited | CIN: U74999HR2014PTC053454 | Registered Office - Plot No.119, Sector - 44, Gurgaon, Haryana – 122001 | Registration No. 742, Valid till 09/06/2027 , License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the insurers. © Copyright 2008-2026 policybazaar.com . All Rights Reserved ˜ Policybazaar Promise reflects the guarantee offered by insurers. Price assurance is based on certifications shared by insurers with us. General Insurance Car Insurance Bike insurance Motor Insurance Third Party Car Insurance Third Party Bike Insurance Travel Insurance Commercial Vehicle Insurance Motor Insurance Third Party Car Insurance Third Party Bike Insurance Travel Insurance Commercial Vehicle Insurance Life Insurance Life Insurance Life Insurance Calculator Life Insurance Companies Life Insurance for Parents Whole Life Insurance Life Insurance for NRI Income Replacement Life Insurance Calculator Life Insurance Companies Life Insurance for Parents Whole Life Insurance Life Insurance for NRI Income Replacement Term Insurance Term Insurance Best Term Insurance Plan Term Insurance for NRI Best Term Insurance Plan for 1 Crore Term Insurance for HNI Term Insurance with Return of Premium Term Insurance for Women What is Term Insurance Term Life Insurance Benefits Insights Best Term Insurance Plan Term Insurance for NRI Best Term Insurance Plan for 1 Crore Term Insurance for HNI Term Insurance with Return of Premium Term Insurance for Women What is Term Insurance Term Life Insurance Benefits Investment Investment Plans Investment Plans for NRIs Child Plans Gift City Investment Pension Plans ULIP Plans Best SIP Plans Money Back Policy Endowment Policy Guaranteed Return Plans LIC Tax Saving Plans Saving Plan Investment Plans Investment Plans for NRIs Gift City Investment Money Back Policy Endowment Policy Guaranteed Return Plans Tax Saving Plans Health Insurance Health Insurance Health Insurance for Family Senior Citizen Health Insurance Health Insurance for Parents Best Health Insurance Plans Maternity Insurance Mediclaim Policy Critical Illness Insurance Health Insurance Health Insurance for Family Senior Citizen Health Insurance Health Insurance for Parents Best Health Insurance Plans Maternity Insurance Mediclaim Policy Critical Illness Insurance Other Insurance Home Insurance Group Insurance Group Health Insurance Marine Insurance Cargo Insurance Fire Insurance Shopkeepers Insurance Office Insurance Professional Indemnity Insurance Doctors Indemnity Insurance Workmen Compensation Policy Comprehensive General Liability Cybersecurity Insurance Directors & Officers Liability Insurance Contractors All Risk Insurance Surety Bond Contractors Plant and Machinery Insurance Erection All Risk Insurance Business Insurance Cancer Insurance Home Loan Insurance Home Loan Emi Calculator Group Insurance Group Health Insurance Marine Insurance Cargo Insurance Shopkeepers Insurance Office Insurance Professional Indemnity Insurance Doctors Indemnity Insurance Workmen Compensation Policy Comprehensive General Liability Cybersecurity Insurance Directors & Officers Liability Insurance Contractors All Risk Insurance Contractors Plant and Machinery Insurance Erection All Risk Insurance Business Insurance Cancer Insurance Home Loan Insurance Home Loan Emi Calculator Investment Calculators SIP Calculator NPS Calculator Compound Interest Calculator Compound Interest Calculator Fitness Calculators BMI Calculator Ideal Weight Calculator Calorie Calculator BMR Calculator Body Fat Calculator Ovulation Calculator Pregnancy Calculator Pregnancy Conception Calculator Pregnancy Weight Gain Calculator Due Date Calculator Macro Calculator Ideal Weight Calculator Calorie Calculator Body Fat Calculator Ovulation Calculator Pregnancy Calculator Pregnancy Conception Calculator Pregnancy Weight Gain Calculator Due Date Calculator Macro Calculator Income Tax Calculator Term Insurance Calculator Life Insurance Calculator Health Insurance Calculator Travel Insurance Calculator Car Insurance Calculator Bike Insurance Calculator Customer reviews Insurance companies Consumer Insights Legal & Admin policies Verify your advisor Investor Relations Payment Methods Policybazaar Insurance Brokers Private Limited CIN: U74999HR2014PTC053454 Registered Office - Plot No.119, Sector - 44, Gurugram - 122001, Haryana Tel no. : 0124-4218302 Email ID: care@policybazaar.com Policybazaar is registered as a Composite Broker | Registration No. 742, Registration Code No. IRDA/ DB 797/ 19, Valid till 09/06/2027, License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers.Product information is authentic and solely based on the information received from the insurers. BEWARE OF SPURIOUS PHONE CALLS AND FICTITIOUS / FRAUDULENT OFFERS IRDAI or its officials do not involve in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint. © Copyright 2008-2026 policybazaar.com. All Rights Reserved.