New Delhi, Oct. 25 -- People buy term insurance to ensure their families remain financially secure in the event of their untimely death. A term insurance policy is essentially an agreement between the insurer and the policyholder for a fixed period, typically ranging from 10 to 40 years, during which the insurer pays the death benefit to the beneficiaries if the policyholder passes away.

This can help ensure that the insured person's family has the financial support to handle outstanding debts and expenses in their absence.

Most term insurance plans offer a lump sum payout to the designated nominees when the insured person passes away. Under Section 39 of the Insurance Act, 1938, a policyholder can nominate one or more persons to receiv...