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Everything About Non-Linked and Non-Participating Life Insurance Plans

Updated On Dec 27, 2022

We often hear everyone say, “Life is uncertain." As uncertainty follows us wherever we go, it has become crucial for us to secure ourselves and our loved ones under a term life insurance policy. It is one of the healthier ways to financially protect our families. In India, term insurance plans are classified differently. The most popular ones include non-linked and non-participating term insurance policies. Read on to understand these types of term policies in detail. 

Everything About Non-Linked and Non-Participating Life Insurance Plans

Meaning of Non-Linked Term Insurance Plan

Non-linked term policies are those in which the policy and its benefits do not depend on the performance of the market. In simple terms, the insurance company pays a fixed sum assured during any uncertain circumstances, such as the death of a policyholder. All the term plans offered by different insurance companies are non-linked, as they are not linked to market fluctuations. Any individual who wants to make low-risk investments can purchase this insurance policy, as an insurance company must pay regardless of its condition. 

Meaning of Non-Participating Term Insurance Plan

Numerous insurance companies in India provide non-par or non-participating term plans. It is the policy under which the insured does not participate in the profits of the company’s market performance. In simple terms, the policyholder is not entitled to any profit, bonus, or other additional benefits. Thus, traditional term insurance policies are non-participating in nature. 

During the policy period, if an insurance company remains profitable, the insured cannot claim any extra benefits, annual returns, or bonuses. Simultaneously, the loss of the company will not affect the policyholder’s claim. Therefore, an insured is only entitled to pay the assured death benefit if the insurer passes away during the policy period. 

Features of a Non-Linked, Non-Participating Term Plan 

Non-linked and non-participating term life insurance policies are those that are bought for a fixed policy period. A fixed amount known as a death benefit would be paid to the nominees of the policyholder if he or she died during the policy period. Listed below are some common features of non-linked, non-participating term policies. 

  • Fixed Return: 

The guaranteed benefit is given to the policyholder as market volatility does not affect the policy. In case of the demise of the insured, the nominees of the policyholder would be eligible to receive the agreed sum assured. 

  • Low-Risk Policy:

As non-linked and non-participating plans are not linked to the market, the risk of return is lower than for those that are linked to the market. It is most suitable for individuals who are looking for basic life insurance to secure themselves and their families. 

  • Affordable Plans:

The insurance companies charge a reasonable premium on non-linked and non-participating term plans. This is because there is no investment choice given to the customers under this plan. Thus, these are more suitable for those who want to secure the future of their loved ones at a low cost. 


In a nutshell, it is crucial to create a safety net for your loved ones that can cover all their financial needs in your absence. A pure life cover like a non-linked and non-participating term insurance plan would be an ideal choice for people who are planning to buy low-risk guaranteed return plans.

Also Read: 

How To Choose The Right Tenure In Term Insurance?

How To Cancel Term Life Insurance Policy?


This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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