₹5 Lakh Term Insurance in India 2025

₹5 Lakh Term Insurance

Term insurance is one of the simplest and most cost-effective ways to secure your family’s financial future. It offers a fixed sum assured to your loved ones in case of your untimely demise during the policy term. The sum assured can help them manage essential expenses in your absence. If you are the primary breadwinner, it is important that you choose a sum assured that is not only suitable for your family’s needs but is also affordable for you in the long run.

A ₹5 lakh term insurance plan can be an ideal option in this regard. The modest sum can act as a valuable safety net and offer you peace of mind without putting pressure on your budget.

What is a ₹5 lakh Term Insurance Plan?

It is a life insurance policy that provides a fixed sum assured of ₹5 lakh to the nominee in case of the policyholder’s demise during the policy term. It is part of the broader types of term insurance available in India and can be preferred for its affordability and simplicity.

A term life insurance plan offers pure risk cover, i.e., it does not offer a maturity benefit (unless it is a return of premium variant). It is purely protection-oriented. With lower premiums and enough coverage for basic financial responsibilities, a ₹5 lakh term insurance plan can be ideal for first-time buyers or individuals with minimal financial liabilities.

Benefits of Having ₹5 Lakh Term Insurance Cover

A ₹5 lakh term insurance plan can be a worthwhile addition to your portfolio, especially if you are seeking affordable protection.

1. Financial Security at a Low Premium

One of the major benefits of term insurance is that it provides a high sum assured at relatively low premium rates. A ₹5 lakh cover can be availed at affordable prices, which makes it accessible to first-time insurance buyers, individuals with modest incomes, or those looking for supplementary coverage.

2. Tax Benefits**

Another key incentive is the tax benefits of term insurance. Under Section 80C of the Income Tax Act, the premiums you pay are eligible for tax deductions. Moreover, the death benefit received by your nominee is exempt from tax under Section 10(10D), subject to terms and conditions.

3. Peace of Mind

Even a modest sum can help cover immediate needs (such as daily living expenses, children’s fees, or clearing debts). It may not match the larger coverage of a ₹50 lakh term insurance policy, but it still offers meaningful support during difficult times.

4. Flexible Customisation with Riders

You can enhance your ₹5 lakh term insurance plan with optional riders, such as critical illness, accidental death, or disability benefits. Adding a term rider can increase the scope of protection for a slightly higher premium.

5. Suitability for Short-Term Needs

If you are nearing retirement or have fewer dependents, this coverage can be a reasonable fit. It also works well for people who have small loans or debts to protect.

6. Easy Starting Point

Term insurance for ₹5 lakhs can be ideal for those who want to start their insurance journey with a simple, affordable product. It is easy to understand, buy, and manage. If needed, one can upgrade their life insurance protection with another, high-coverage policy to supplement the ₹5 lakh cover.

₹5 Lakh Term Plan Premiums

₹5 Lakh Term Plan Tenure

₹5 Lakh Term Plan Misc Queries

What is the premium amount for a term plan offering coverage of ₹5 lakhs?

Answer: The premium for a ₹5 lakh term insurance plan can differ among individuals, even for the same plan, depending on factors such as age, health, occupation, and so on. You can use a term insurance calculator to estimate your premium.

Can I choose the frequency of premium payments with ₹5 lakh term insurance?

Answer: Yes, insurers usually allow monthly, quarterly, half-yearly, or annual payment options, depending on your chosen premium payment term.

What is the term duration of ₹5 lakh Term Insurance?

Answer: You can choose a term duration as per your needs; the options can range from 5 to 25 or 30 years. This can vary based on age and the insurer’s offerings.

What happens if I survive the policy tenure?

Answer: Unless you have opted for a zero-cost term insurance plan, you do not receive any benefits on surviving the tenure. A zero-cost plan allows you to get a refund of all your insurance premiums if you outlive the policy term.

What are the eligibility criteria to purchase a ₹5 lakh term insurance plan?

Question: What are the eligibility criteria to purchase a ₹5 lakh term insurance plan?
Answer: The eligibility criteria for the ₹5 lakh term insurance plan are usually simple. You must be between 18 and 65 years old, have a regular income, and meet basic health requirements.
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Can I avail of loans against my ₹5 lakh term insurance policy?

Question: Can I avail of loans against my ₹5 lakh term insurance policy?
Answer: It depends on the insurer. As term life insurance policies do not have a cash value, it may be difficult to secure a loan against them.
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What happens if I move to another country after purchasing ₹5 lakh term insurance?

Question

What happens if I move to another country after purchasing ₹5 lakh term insurance?

Answer

Most plans offer global coverage, making this a valid term insurance option for NRIs, as long as premiums are paid.

** Tax exemptions are as per applicable tax laws from time to time.

₹5 Lakh Term Insurance

What is a ₹5 lakh Term Insurance Plan?

How Does A ₹5 Lakh Term Plan Work?

Policy Purchase

Policy Term

Death Benefit

No Survival Benefit

If Mohnish Passes Away During the Term (e.g., in the 10th year)

If Mohnish Survives the Entire 20-Year Term

Benefits of Having ₹5 Lakh Term Insurance Cover

1. Financial Security at a Low Premium

2. Tax Benefits**

3. Peace of Mind

4. Flexible Customisation with Riders

5. Suitability for Short-Term Needs

6. Easy Starting Point

Who Should Consider a ₹5 Lakh Term Insurance Plan?

First-Time Insurance Buyers

Single Individuals with Limited Liabilities

Retirees or Near-Retirement Individuals

People Seeking Supplemental Coverage

Homemakers or Those Earning Modest Incomes

Choosing the Right ₹5 Lakh Sum Assured Term Plan

Compare Premiums and Benefits

Check Claim Settlement Ratio

Consider Policy Flexibility

Add Riders for Enhanced Protection

Review Payment Options

Policy Term

Evaluate Insurer’s Reputation

Future Upgrade Options

Eligibility Criteria for 5 Lakh Term Insurance

Minimum Entry Age

Maximum Entry Age

Policy Term

Income Proof

Health Declaration

How to Buy ₹5 Lakh Term Insurance?

Assess Your Needs

Compare Plans Online

Use the Right Tools

Choose the Right Policy Term

Add Riders if Needed

Fill Out the Application

Provide Medical Info

Make the Payment

Factors Affecting Premiums of ₹5 Lakh Term Insurance

Age

Health Condition

Lifestyle Habits

Policy Term

Gender

Occupation

Add-Ons/Riders

Family Medical History

Claim Settlement Process for ₹5 Lakh Term Insurance

Informing the Insurer

Submitting Documents

Verification

Claim Acceptance

Payout

FAQs

₹5 Lakh Term Plan Premiums

₹5 Lakh Term Plan Tenure

₹5 Lakh Term Plan Misc Queries

What is the premium amount for a term plan offering coverage of ₹5 lakhs?

Can I choose the frequency of premium payments with ₹5 lakh term insurance?

What is the term duration of ₹5 lakh Term Insurance?

What happens if I survive the policy tenure?

What are the eligibility criteria to purchase a ₹5 lakh term insurance plan?

Can I avail of loans against my ₹5 lakh term insurance policy?

What happens if I move to another country after purchasing ₹5 lakh term insurance?

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