What Is a Term Plan? Why Most People Still Don't Understand It

Why should we buy...

Even today, many people — whether in private jobs or government jobs — still don’t clearly understand what a term plan really is.

As soon as you mention the word “insurance,” their first question is:
“Will I get my money back?”

When you tell them that a term plan is not a money-back policy, and it only gives coverage in case something happens to you — they instantly lose interest.

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What do most people think?

• “If I won’t get my money back, what’s the benefit?”

• “What if the company shuts down and doesn’t pay?”

• “LIC gives back the money, so it’s safer.”

• “SIP and other things are risky. LIC is better.”

Because of these doubts, most people end up buying LIC’s money-back plans — even though the premium is 5 times higher.

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So, what is a term plan?

A term plan is simple.

If something happens to you during the policy period, your family gets a big amount — like ₹50 lakhs or ₹1 crore.

But if you live a healthy life and nothing happens during the term, you don’t get any money back.

So it’s not an investment. It’s just pure protection — like a helmet or seatbelt.

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Why should you consider it?

Because you can get huge coverage for a small monthly payment.

Example: ₹500–₹1000 per month can give you ₹50 lakh – ₹1 crore cover.

This money helps your family with:

• Daily expenses

• Children’s education

• Loan repayments

• Medical needs

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LIC vs Term Plan?

LIC’s money-back plans:

• Give some money back

• Offer very low coverage

• Cost a lot more every month

Term plan:

• No money back

• High coverage

• Very low premium

So the real question is:
Do you want money back, or do you want real protection for your family?

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What if the company shuts down?

All IRDAI-approved insurance companies follow strict rules.
Even if a company shuts down, your policy stays safe and is taken over by another company.

So your money and family security are not lost.

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Final Thought

If others depend on your income, then a term plan is not a choice — it's your duty.

If you want investment too, then combine a term plan with an SIP.
That way, you get both protection and returns.

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What do you think?

Do you still prefer money-back plans or do you want real safety for your family?

💬 Share your thoughts in the comments!

Thank you for being here.

— Prafull Ranjan 🙏

Thank you for being here.

— Prafull Ranjan | Stories that Speak to the Heart ❤️

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