The cut in solvency margin has prompted private insurers such as Reliance Life Insurance and Kotak Life to initiate a process of revision in term plan rates. According to LIC chairman T S Vijayan term plans are already available at rock-bottom prices and hence he does not expect a significant change. He, however, doesn’t support the idea of term products and thinks investment-cum-insurance products are the flavour of the season.

What is a term cover?

It is a pure protection cover that creates an asset instantly with the first premium paid. In an unfortunate event of the death of the insured, a term cover gives the family the entire sum assured. It is the sheet anchor for all life insurance needs. However, there are no maturity benefits available in such plans.