Home |Life Insurance | If there's no death in those 20 years of term plan, will the premium be returned? What happens to the money we pay as premium?

If there's no death in those 20 years of term plan, will the premium be returned? What happens to the money we pay as premium?

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Shailesh Kumar, Co-founder, Insurance Samadhan verified
Answered on October 27,2021

Dear 

Insurance works on the principle of pool creation and contribution . Insurance company only manages the pool .

So if 1 lakh lives are insured under Term plan and 100 die in a year then 99900 people contribute towards death claim of 100 death . 

So your paid premium contributes towards death claim of 100 people . So premium is an expense and nothing is returned if you survive .

All life insurance business across the world work in this manner .

If you buy saving linked insurance , even then mortality premium goes as contribution and only saving part is returned . 

Hope this clarifies 

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