The primary consideration should only be the amount of cover it provides. A term cover is the purest form of insurance. This policy protects the buyer against the risk of death for a specified period. The cost is the premium paid.

The easiest analogy for a term policy is a car insurance policy. Car insurance is a yearly contract. Every year you pay the premium, if your car meets with an accident then a compensation is paid to make good the damage. If you have driven safely then bravo. The insurance company pats you on your back and may give a discount on the next year's premium.

Similarly, term is a contract for a pre-specified period. If the policyholder dies while the policy is in force then the insured amount is paid to the beneficiaries. If he lives beyond it then he is entitled to no maturity benefit, no bonus. The premiums paid will have to be forfeited.

Obviously, the thought which crosses our mind is what makes term a superior insurance product? Well the answer is in its cost. For a paltry sum of premium, an enormous cover can be bought. For example, a 30-year-old can buy a term policy for Rs 25 lakh (Rs 2.5 million) for 30 years for a yearly premium of around Rs 9,200.

If the insured does not live to see his 60th birthday then his family will be richer by Rs 25 lakh. And if he survives that age and enjoys his grand children's company then the premium paid is "sunk".

A 37-year-old colleague who was in a senior management position was paying Rs 35,000 per annum for a Rs 750,000 sum assured for a 20-year endowment policy. It promised to give about 6 per cent compounded return, tax-free after the completion of the 20 years, which would work out to about Rs 13.7 lakh (Rs 1.37 million).

If he were to die during the term then he would be paid the sum assured of Rs 750,000-plus the accrued bonus.

A little introspection made him realise that the cover of Rs 750,000 was painfully inadequate for his family in the event of his untimely death. His monthly household outgo was about Rs 25,000. His son was bright and aspired to pursue a career in medicine, while his daughter wanted to study at the National Institute of Design, which was also not easy on the pocket.

His career was moving well and he would be able to provide all of the above and live a comfortable retired life without any difficulty.

But the morbid thought kept niggling in his mind that if he were to pass away in the next 10-15 years his family would be in dire financial straits.

He shopped around and bought a term cover for Rs 50 lakh (Rs 5 million) for an annual premium of around Rs 30,000 per annum, which protected his family till he was 65. Traditional endowment products give low returns because insurance companies have to invest a chunk of the premium in low-yielding sovereign bonds.

An investment-based policy for a sum assured of upwards of Rs 50 lakh would set him back substantially every year. The low returns would result in his retirement planning go haywire.

The term cover of Rs 50 lakh, plus the earlier cover of Rs 750,000, if invested correctly, would meet all his families needs if were to die before 65.

The benefits of term insurance are self-evident. Yet why is it not so popular? Although we are aware that death can strike any time but in our hearts we want to believe that this cannot be our fate. So the resistance to buy a policy without any maturity benefits.

If you have the financial discipline to buy adequate term cover and invest your surplus in other assets then you have what it takes to attain financial nirvana.