What is the Difference Between Term Life and Comprehensive Life Cover?

Life insurance plans are an essential part of financial planning. These products safeguard your long-term goals, secure your future, and help with tax savings. However, it is vital to understand the different insurance products available in India to select the one best suited to your needs.

The option to choose between term life insurance and comprehensive life cover has always been a topic of discussion amongst policyholders. If you are unsure which way to go, here’s an explanation of features,benefits, and provisions of both these plans to help you decide on the product that can serve you better.

Term Life Insurance

A term life insurance is the pure-protection form of life insurance that provides life coverage in exchange for a premium. Term insurance in India is slowly getting traction as people get more attracted to low premiums as compared to higher coverage values.

Term life insurance assures payment of the sum assured in case the policyholder passes away during the coverage period. No maturity benefit is usually offered in such term policies. Here are some other things to note:

  •  The tenure of a term life insurance has to be renewed every year for continuous coverage.
  •  The premium paid is tax-deductible in case the person opts for it. Thus, term plans provide double benefits.
  • The premium of term insurance in India depends on various factors, including the age and health conditions of the individual. Generally, the cost rises with increasing age. People working in hazardous industries, or with smoking and drinking habits may also have to pay a higher than average premium.
  • Term plans only offer maturity benefits in case of the demise of the insured person during the policy tenure.
  • You can opt for ‘return of premium’ term plans that repay the entire amount you paid as premiumthroughout the policy period if you survive the tenure. Their premiums are usually higher than traditional term plans, but you get a lump sum amount when the tenure ends.

Comprehensive Life Cover

Comprehensive life cover could be termed as an upgrade over term life insurance, except that comprehensive life cover plans also provide critical illness cover for the insured person and thus offer double protection to the policyholder and their family.

In case of death, the beneficiary receives the insurance payout from a standard term plan, which acts as a safety net against financial encumbrances. A comprehensive life plan also offers maturity benefits to the policyholder on the completion of the policy term.

However, in case the insured person falls critically ill, the family might face financial trouble. The expenses involved in healthcare are also escalating by the day. In the face of illness, especially if a person’s income generation is hampered, families can struggle to meet medical costs as well as their day-to-day expenditure. A comprehensive life cover can take care of the costs for such treatments, providing substantial financial relief to your loved ones.

Which should you prefer?

Every person has different needs. In case you have a history of critical illness in your family, it might be better to opt for a comprehensive life cover. Comprehensive life cover customizes and clubs all your insurance needs in a single policy. Packages like accidental deaths and disability benefits, and everything else your family needs are combined into one comprehensive scheme.

However, it is suitable for someone with no budgetary constraints due to the higher premium involved. Since comprehensive life cover has multiple riders and wider coverage, it is more expensive than term insurance.

Term plans offer an affordable life cover. You can also avail multiple riders like critical illness cover, accidental death benefit, etc. at an additional premium. Term plans with Return of Premium offer maturity benefit on policy completion. Such term plans are advisable for people with financial dependents and debt as it can help you secure the financial freedom of your family in unfortunate circumstances, or for

individuals with budgetary constraints.


Before finalizing the best term plan, it is advisable to read the terms and conditions associated with each policy carefully. It will enable you to get a correct understanding about what will eventually benefit your family. You will also be able to make an informed decision instead of being blindsided.