No, you can not cash out your term insurance plan. If the policyholder passes away during the policy term, then his/her family receives the sum assured (death benefit). On the other hand, if the policyholder survives the policy term, then there are no maturity benefits. Besides the death benefit, term plans do not offer any other cash benefits.

Term plans are pure life insurance. They do not offer any savings component. Term plans are used mainly to act as an income-substitute, if the primary breadwinner passes away. They provide the beneficiaries with a large sum assured, if the policyholder passes away unexpectedly. The sum assured by a term plan can be used to pay for the child’s education, home loan, car loan and other financial commitments of the insured, in his/her absence.

If you’re looking to cash out a life insurance plan, then you need to invest in plans that have a savings component like whole life insurance, ULIPs, etc. In these plans, a portion of your premiums are used for investments. Once the policy has attained sufficient cash value, you can take a loan or partially withdraw the accumulated funds.

Since, term plans do not have any cash value, the premiums of term plans are significantly cheaper when compared with other life insurance plans like ULIPs, investment plans, etc.