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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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