The premium that you pay towards life insurance comes under Section 80C. Now, there are several forms of life insurance policies. Amongst them, term insurance is indeed the best option. It offers you a large cover at very low premiums.
Term insurance differs from Unit Linked Policies or ULIPs and endowment. Unit Linked Policies and Endowment are types of savings plans. The premium that you pay towards them will get accumulated over time. If you invest in ULIPs, the premiums will get invested in the stock market. But In the case of term insurance, although you get a large cover, you will not be able to acquire back your premiums. Because of this reason, a lot of investors consider ULIPs or endowment policies to be a better option than term insurance. However, this is not the case.
The most significant function of insurance is to offer protection. Insurance products which double up as investments are not suitable because of two reasons. One, it provides inadequate insurance over. Two, the returns on investment are extremely unsatisfactory. Hence, you mustn't mix up investment and insurance. For achieving protection, you need to buy pure investment products.
Not everyone should buy life insurance policies. Those who have any kind of financial dependents should purchase life insurance covers. Those who do not earn money they need not purchase life insurance. A lot of parents buying life insurance for their children. While it may sound appealing, but this has no business logic. Parents are not dependent on children for matters related to finances. So, it makes no sense to buy insurance for their kids. Instead, they should consider buying life insurance covers for themselves.