Term insurance is mainly suitable for which of the following needs?

A. Tax planning

B. Savings

C. Disease

D. Income replacement

Answer: Option D

Solution(By Examveda Team)

Term insurance is mainly suitable for income replacement.
Under regular term plans, the amount is paid as lump sum in the event of death of the policyholder. Under income replacement term plans, the sum assured is not paid in lump sum, but as monthly payout for a fixed number of years. This monthly payout takes away the pressure to generate income from your investment.