Term insurance

Term insurance is pure life cover: it pays a lump sum to your nominee if you die during the policy term, and pays nothing if you outlive it. Because there is no savings component, the premium per rupee of cover is the lowest available — which is the entire point. The cover should reflect what your dependants would need to replace your income and clear liabilities. Premiums stay level for the full term when bought early. Buy through IRDAI-licensed advisors and disclose health and habits accurately: non-disclosure is the main reason claims are rejected.