The main difference is the aim of the plan. Term plans cover risk in the event of eath. Pension plans assure income to those who survive past their retirement age, enabling them to be financially independent. Term plans offer financial backup for the family in the event of the policyholder’s death while pension plans offer financial security both for policyholder and family after retirement. Pension plans include the eventuality of untimely death, in which case the pension is paid to the beneficiary. In term plans, maturity benefit is paid as a lump sum and is exempted from tax. In pension plans, 1/3 of the maturity amount is paid as a lump sum and is exempted from tax, while the remaining is paid as an annuity and attracts tax.