Life Insurance

Life Insurance, Explained Honestly

Life insurance pays your family a sum if you die while the policy is in force. Term insurance does only that, which makes it the cheapest cover per rupee; the other types also pay if you survive, funded from your own premium. LIC settles 98.3% of death claims, against 99.6% at HDFC Life (IRDAI data, three-year average to March 2026).

Written by Kshitij JainReviewed by Harsh SoniUpdated nyvo insurance Services LLP, IRDAI Corporate Agent (Composite) CA1085Salaried advisors, no commission-based ranking

See the 7 TypesCompute Your Real Return

Types of Life Insurance in India

The seven product families, sorted by whether the payout is guaranteed, bonus-dependent or market-linked.

Read guide

How to Read a Benefit Illustration

Every savings policy comes with one, and it holds the number the pitch leaves out. Work out what a plan actually returns.

Read the guide

The largest life insurers, on their claim record

Settlement ratios sit within a few points of each other, so read the complaint rate beside them. Both figures are IRDAI data, as a weighted average of the last three financial years to March 2026.

Life insurerDeath claims settledComplaints per 10,000 claims
LIC98.3%4.57
HDFC Life99.6%1.33
SBI Life99.0%5.59
ICICI Prudential98.5%11.0
Axis Max Life99.3%7.0
Tata AIA99.5%3.0
Bajaj Life99.2%3.95
Aditya Birla Sun Life98.5%2.33

Weighing a savings plan against term cover and an investment of your own? Talk it through with an advisor; they are paid a salary, not per policy sold, and the call is free.

How does life insurance work?

You pay a premium, yearly or monthly, for an agreed number of years. If you die while the policy is in force, your nominee gets the sum assured. What happens if you live is what separates the types: a term plan pays nothing, an endowment or guaranteed savings plan pays a maturity amount, and a ULIP pays whatever its funds are worth. That survival payout is funded from your own premium, which is why it costs so much more than the same cover on term insurance.

Is LIC the same thing as life insurance?

No. The Life Insurance Corporation of India, LIC, is one insurer, one of 25 life insurers in our table. Life insurance is the product it sells alongside the others. On IRDAI's figures LIC settles 98.3% of death claims and draws 4.57 complaints per 10,000 claims. We have reviewed four LIC term plans, including LIC Digi-Term, which is sold online, and worked out what its savings plans return, for example in our LIC Jeevan Labh review.

What is whole life insurance?

Whole life insurance covers you to age 99 or 100 rather than for a fixed term, so it pays out whenever death comes. It comes in two forms. Some savings plans run for life, such as LIC Jeevan Umang, which pays 8% of the sum assured every year for life; our LIC Jeevan Umang review shows why that 8% is not an 8% return. And some term plans offer a whole-life option, such as the Whole Life Cover variant of Axis Max Life Smart Term Plan Plus, which runs to 100 and hands half the premiums back at 60 or later. Either way, you pay for decades in which most families no longer need the cover.

Life insurance terms, in plain words

  • Sum assured: the amount the policy promises to pay on death.
  • Policy term: how long the cover lasts. The premium paying term can be shorter, on limited pay.
  • Nominee: the person the insurer pays the claim to. Not always the same as the legal heir.
  • Maturity benefit: what a policy pays if you survive the term. Nil on plain term cover.
  • Surrender value: what you get back if you stop a savings policy early. Usually poor in the first years.
  • Bonus: an addition declared each year on a participating plan, and not promised in advance.
  • Rider: extra cover bought on top of the base plan, such as critical illness or accidental death.
  • Grace period: the time after a missed premium during which you stay covered. 30 days, or 15 on monthly premiums, on every term plan we re-read in October 2026.

All Life Insurance Articles23 articles

A short solid column of coins beside a taller dashed-outline column, standing for a small guaranteed return against a larger illustrated one

Bajaj Life ACE Advantage Review: 1.1% Is the Guarantee

The guaranteed part of this participating plan returns about 1.1% a year. Getting to 5.3% needs bonuses the insurer may declare and may not.

Read article
A ruled paper document fastened at its corners beside a short stack of paper slabs

Bajaj Goal Suraksha Review: 5.65%, and It Is Contractual

₹12,00,000 in and ₹20,59,000 out on the insurer's own example. As an annual rate that is 5.65%, and every rupee of it is in the contract.

Read article
A paper urn with nine spouts, one of them open and pouring a steady ribbon into a bowl

Guaranteed Pension Goal II: The Plain Plan Pays More

Same insurer, same ₹25 lakh, same age. The regulator's standardised annuity pays 9.7% more income than this flagship product on the comparable option.

Read article
A tall column of stacked coins beside a document under a magnifying glass with a percent symbol above, standing for checking the real annual rate behind a guaranteed plan

Bajaj Life Assured Wealth Goal Review: 3.72x is 6%

The brochure headlines 3.72 times your money. Run the same figures as an annual rate and it is about 6%. A review from Bajaj Life's own filed documents.

Read article
Paper diorama of a stack of forms with a fountain pen and a small key on a ring, under the words Bank-Sold ULIP and a plaque reading Keep, cancel or stop

Sold a ULIP at Your Bank? Keep It, Cancel It or Stop Paying

Signed a ULIP while opening an account, applying for a locker or moving a loan along? What you get back if you cancel in the free-look period, stop paying inside the five-year lock-in, or keep going, and how to complain if it was mis-sold.

Read article
A policy document with one line circled, beside a rising column of stacked coins and an upward arrow, standing for the annual rate hidden inside the illustration

Benefit Illustration: How to Find Your Real Return

Every savings policy comes with a benefit illustration, and it holds the one number the sales pitch leaves out. How to read it and compute your actual return.

Read article
Paper diorama of a magnifying glass on a stand beside a short tower of paper blocks, under the words The Real Return and a plaque reading Guaranteed income plans

Guaranteed Income Plans: The Real Return, Worked Out

The 8% or 11% in a guaranteed income plan's pitch can be a share of the sum assured, not your return. We work out the annual return (IRR) of nine options from five guaranteed plans, using each insurer's own illustration with every input stated, and set it beside the PPF and an SBI fixed deposit.

Read article
A paper graduation cap on a stack of three books with a slim ladder beside it

Click 2 Achieve Smart Student Review: 3.6% for a Degree

The child education plan in HDFC Life's range returns about 3.6% a year on its own illustration – among the lowest rates of the guaranteed plans we have reviewed.

Read article
Two columns of coins of noticeably different heights beside a document, standing for the gap between a gross investment return and what is left after charges

HDFC Life Click 2 Wealth Review: The Wrapper Costs 1%

On the brochure's own figures, 8% gross becomes 6.99% net. That one point a year is what the ULIP wrapper costs, and it is less than the reputation suggests.

Read article
One short solid column of coins beside a much taller column drawn as a dotted outline, standing for a small guaranteed benefit against a large one that is not promised

Sanchay Par Advantage: Only Your Money Back Is Guaranteed

The guaranteed maturity benefit is ₹8,00,000 on ₹8,00,000 of premiums. Everything above that is a bonus the insurer may or may not declare.

Read article
Four columns of coins of different heights beside a document, standing for four plan options whose headline multiples rank differently from their annual returns

HDFC Life Sanchay Plus Review: 4.03x Is Not the Best Option

Four options, one plan. On the brochure's age-30 examples, Long Term Income shows 3.63 times your money and returns 6.34%; Guaranteed Maturity shows 2.66 times and returns 6.40%. Rate and multiple disagree.

Read article
A long row of small equal income coins stretching far to the right, standing for a guaranteed income paid slowly over decades at a low rate

ICICI Pru GIFT Select Review: 4.1% on the Illustrated Option

ICICI Pru GIFT Select pays a guaranteed income for decades. On the increasing-income option ICICI illustrates, the return works out to 4.13% a year. What that means against a PPF.

Read article
A short column of coins beside a longer row of years, standing for a small guaranteed return spread across a long horizon

Kotak Assured Savings Plan Review: 3.6-4.7% Guaranteed

Kotak Assured Savings Plan is fully guaranteed. On its own figures the return works out to between 3.59% and 4.67% a year – among the lowest of the savings plans, below a bank FD.

Read article
A single premium receipt beside a maturity cheque of roughly two and a half times its height, standing for money paid in versus money returned over 25 years

LIC Jeevan Labh Review: 4.76% in the 8% Illustration

On LIC's own Plan 736 illustration (age 30, ₹10,025 a year for 16 years, 25-year term), Jeevan Labh returns 4.76% a year in the 8% scenario and 1.26% guaranteed. What that means against a PPF, and who it is for.

Read article
A tall column of premium coins beside a long low trailing stream of small yearly-income coins, standing for an 8%-of-sum-assured payout that works out to a far lower real return

LIC Jeevan Umang Review: The 8% Is Not an 8% Return

LIC Jeevan Umang pays 8% of the sum assured every year for life. That is not an 8% return. On LIC's own premium table the guaranteed return works out to about 4.47% a year.

Read article
A tall stack of premium coins beside a shorter guaranteed maturity stack, the guaranteed return falling below what was paid in

LIC New Jeevan Anand Review: The Guaranteed Part Loses Money

On LIC's own premium table, New Jeevan Anand's guaranteed maturity is less than the premiums you pay in. Every rupee of positive return depends on bonuses LIC may or may not declare.

Read article
A broad bare paper canopy beside a narrower one sheltering a half-filled jar

Term Insurance vs Life Insurance: The Real Difference

The difference between life insurance and term insurance: term is one type of life insurance, the kind that pays only on death. What the rest of the category adds, and what that costs you.

Read article
A tall column of coins beside a longer one, standing for a guaranteed savings return that is higher than most plans but still short of a benchmark line

Axis Max Life Smart Wealth Plan Review: 5.9–6.4% Guaranteed

Axis Max Life Smart Wealth Plan is fully guaranteed: 5.94% a year on the lump-sum option, 6.39% on long-term income, per its own illustrations. Below PPF.

Read article
A paper reservoir releasing a thin steady ribbon along a long channel

Saral Pension Review: 6.93% for Life, and the Catch

IRDAI's standardised immediate annuity pays about 6.93% of your purchase price for life. Every insurer sells the same product, so only the rate differs.

Read article
Two coin columns of different heights, the taller one a market fund and the shorter one what reaches the investor after a wedge of charges is removed

SBI Smart Fortune Builder Review: 6.4% After the Charges

SBI Smart Fortune Builder is a ULIP. On SBI's own illustration, an assumed 8% fund return reaches you as 6.43% after charges. What the wrapper costs against a direct index fund.

Read article
A steady row of equal income coins over fifteen years beside a single premium stack, standing for a guaranteed income that returns a low single-digit rate

SBI Smart Platina Plus Review: 5.49% on SBI's Own Numbers

SBI Smart Platina Plus pays a guaranteed income and returns 110% of premiums. On SBI's own brochure illustration that works out to 5.49% a year. What that means against a PPF.

Read article
Three identical sealed envelopes in a letter rack beside a plain measuring rod

Tata AIA Fortune Guarantee Plus Review: 3x is 5.46%

The brochure shows ₹10 lakh in and ₹30.24 lakh out. As an annual rate that is 5.46%. A review built from Tata AIA's own current brochure and policy document.

Read article
Seven paper folders fanned out in an index box, each with a blank tab

Types of Life Insurance in India: All 7 Explained

Term, endowment, money-back, whole life, ULIP, guaranteed savings and annuity plans. What each one actually does, what it costs, and who each is built for.

Read article

Life insurance questions, answered

If the vocabulary is the confusion, start with term insurance vs life insurance; before buying any savings plan, read how to read a benefit illustration.

Is term insurance a type of life insurance?
Yes. Life insurance is the whole category of policies that pay out on death, and term insurance is the type that pays only on death, with nothing back if you outlive the term. So the real choice is not term or life, but pure protection or protection bundled with a savings plan.
What are the types of life insurance in India?
Seven product families: term, endowment, money-back, whole life, guaranteed savings (non-participating), ULIP, and annuity or pension plans. Only term is pure protection; five bundle cover with saving funded from your own premium, and annuities turn savings into an income for life.
How do I work out the real return on a life insurance savings plan?
Compute the annual rate from the insurer's benefit illustration, not the maturity multiple. On round numbers, paying ₹1,00,000 a year for 10 years and receiving ₹22,00,000 at the end of year 20 is 2.2 times the money paid in, but an internal rate of return of about 5.1% a year, with premiums paid at the start of each year.
Are bonuses on a life insurance policy guaranteed?
No. On a participating plan, bonuses are declared each year out of the insurer's surplus and are not promised in advance, so only the guaranteed column of the benefit illustration is a commitment. On a guaranteed non-participating plan every figure is contractual, which is why its return can be computed exactly before you buy.
What does term life insurance cover?
Death from any cause during the policy term, with one standard exception: suicide within the first 12 months, when most plans return part or all of the premiums instead. Many term plans also pay early if you are diagnosed with a terminal illness. Nothing is paid if you outlive the term, unless you bought a return-of-premium version.
What happens when a life insurance policy matures?
It depends on the type. A plain term plan pays nothing at the end of its term; the cover simply stops. An endowment or guaranteed savings plan pays its maturity benefit, guaranteed or with bonuses. A ULIP pays the fund value, and a whole life plan carries on until 99 or 100. Check the benefit illustration for the exact amount.
What are the drawbacks of a savings life insurance policy?
Three, mainly. The return is usually lower than the pitch suggests, because the maturity amount is quoted as a multiple rather than a yearly rate. Surrendering in the early years returns much less than you paid in. And the life cover is small for the premium, so you may still need a term plan. Work out the rate before you sign.

Sources

Not sure how much cover you need?

Book a free 30-minute call with our life insurance experts. No pressure, no spam – just honest, personalised advice.

Book a Free Call

Ready to Simplify Your Insurance?

Book a free 30-minute call with a salaried nyvo advisor. No pressure, no spam.