In case of any unfortunate event, your family will be able to continue with their lifestyle without any financial worries. That is why term insurance is considered one of the most important financial investments for protecting the family against any financial emergencies.
It can be pretty confusing, with numerous options to choose from when locating the best term insurance plans in India. Hence, it is vital to compare the best term plans in India, keeping in mind essential parameters such as coverage, premium, claim settlement ratio, and additional benefits.
A good term insurance plan should provide adequate coverage at reasonable premiums, thereby providing a sense of security for years to come. Suppose you are a young professional embarking on your career or a parent aiming to have long-term coverage.
In that case, the best term insurance plans for the family in India are tailored to meet diverse requirements. These plans take care of your family in terms of finances, such as educational expenses, loan payments, and everyday living costs.
This blog will walk you through the best term insurance plans in India, helping you choose the one that balances affordability, coverage, and trust. By the end of this blog, you will find yourself clear on which policy fits you the best and will guarantee financial safety for your family.
What Do You Mean by Term Insurance?
If you are searching, what is term insurance? It is one of the simplest and most affordable life insurance products. The policyholder pays a fixed premium for a definite tenure, and in case of death during this tenure, the family members receive an assured sum of money (called death benefit). Term insurance, being pure protection does not have any aspects of saving or investment attached with it.
A few of its advantages include high protection with lower premiums. For instance, one can get coverage worth crores by paying an affordable annual premium. Thereby, it acts as an inexpensive option to secure your family’s future irrespective of your presence on this earth.
Term insurance is mandatory for any earning individual, particularly if he has dependents such as parents, a spouse, or children. Some of these sponsorships cover expenses for home loans, education, daily living, and other financial commitments.
Term insurance assures you that your dependents will be well taken care of financially if anything unfortunate happens. It’s a small investment toward huge coverage.
How Term Insurance Works in India?
Discovering how term insurance works is a straightforward process. Let’s understand everything about term insurance in clear steps, including the policies that you need to know.
- Select the Coverage
Calculate how much money you want to ensure would be available for your family in case of your demise. That becomes the sum assured.
- Choosing the Policy Term
Choose the length of time you want life insurance coverage to be in force, for example, for 30 or 40 years, depending upon your age and needs.
- Paying Regular Premiums
Pay fixed premiums either monthly, quarterly, or yearly. Premium depends on your age, health, lifestyle, etc., and the sum assured.
- Death Benefit Payout
If the policyholder dies within the policy term, the insurance company pays the nominee the entire sum assured. This amount is free from taxation and may be used for day-to-day living expenses, repayment of loans, education, or so on.
- Lapse in Policy
On not remitting premiums, the policy may lapse, meaning more defeat than coverage.
- Revival Option
Most insurers give you room to revive a lapsed policy within 2-5 years by paying all due premiums together with interest.
- Example Scenario
Age 30, cover for ₹1 crore for 30 years, the premium is about ₹8,000 to ₹12,000 per annum. If the policyholder dies during the 15th year, then the nominee gets the full payout of ₹1 crore.
- Comparison with Other Life Insurance
Term plans charge less and offer pure protection. Other plans, like ULIPs or endowment plans, combine insurance with investment.
At the end, the term insurance is one of the cost-effective ways to protect your family for a fixed period, with no investment or hidden complications.
What are the Top 10 Best Term Insurance Plans in India?
It goes beyond just finding the best term insurance plans in the current year with the cheapest premium. You require a plan that builds strong coverage, which can accommodate your budget, and, equally important, a reputable insurer. Term insurance is a pure form of protection. It means that, in the case of your demise, the family’s financial needs are well taken care of.
Go Through Premium Insurers and Their Top Plans
Here are the top 10 term insurance plans in India in the current year. Read to know more about these plans and buy accordingly.
1. HDFC Life Click 2 Protect Super
A flexible plan that allows you to increase your coverage during major life events, such as marriage and the birth of a child. Also, it offers riders for critical illness and accidental death. HDFC Life, with its higher claim settlement ratio, provides you with trust and flexibility.
2. ICICI Prudential iProtect Smart Plus
ICICI Prudential iProtect Smart Plus policy provides cover for death, terminal illness, and 34 critical illnesses. You can choose to disburse the amount to your family as a lump sum, a monthly income, or even both. The premiums are run late if you enter the policy early, and the brand name is reliable.
3. Max Life Smart Secure Plus
You get “Return of Premiums,” meaning that in the event you survive the term for which the policy has been purchased, the premiums paid shall be returned to you; accidental death benefits may also be added. The Max Life Smart Secure Plus plan is certainly preferred for those willing to make some returns from their protection.
4. Bajaj Allianz eTouch Term Plan
Bajaj Allianz Term Plan combines life cover with cover for accidental death and permanent disability. It offers coverage till 85 years of age, and the online purchase is very easy.
5. SBI Life eShield Next
SBI Life eShield Next offers three types of covers: Level Cover, Increasing Cover, and Future Proofing. Its premium rates start to get affordable once you select higher coverage, and SBI’s trust backs the plan.
6. Tata AIA Sampoorna Raksha Supreme
Since it has been up for coverage for about 100 years, it is considered a long-term option for lifetime protection. Tata AIA Sampoorna Raksha Supreme offers flexible payment terms and better claim settlement history.
7. PNB MetLife Mera Term Plan Plus
PNB MetLife Mera Term Plan Plus has a maximum coverage of 99 years, with recommendations for riders for critical illnesses and accidental deaths. Payout options may be received as a lump sum, a monthly income, or a combo payout.
8. Aditya Birla Sun Life DigiShield Plan
Aditya Birla Sun Life DigiShield Plan offers 10 types of plan options, such as level cover and increasing cover. There are special benefits for female policyholders, and it is well customizable.
9. Kotak e-Term Plan
Kotak’s e-Term Plan is the cheapest online plan with payout options, flexible coverage, and coverage for up to 75 years. This really is a basic budget choice for starters.
10. LIC Tech Term Plan
The LIC Tech Term Plan is an easy plan for coverage with the premium discount offered for non-smokers from one of the most trusted insurers in India, and it provides straightforward coverage.
What are the Factors to Keep in Mind While Choosing Term Insurance?
If you are going to choose a term life insurance, then choosing the right plan is essential, as the right plan can provide you with full benefits. There is a wide variety of factors that will help you in making an informed decision and save your pocket.
- Review Claim Settlement Ratio
Before choosing the insurance, make sure it has a settlement ratio for higher approval chances. A higher ratio helps you get a complete payout without delays or paperwork.
- Affordability of Premium
Go with a plan that provides higher coverage within your pocket. Review other plans from other companies to get more clarity and find the best solution and cost benefits.
- Policy Terms and Features
Check flexibility while choosing terms, premium payment options, and renewal policies. By understanding these, you can get complete clarity about your plan, which is reliable and affordable to your budget.
- Additional Benefits of Term Insurance
Consider additional benefits of term insurance, like critical cover, accidental claim, or premium refusal features, as these add-ons can help you boost the protection of your policy.
- Coverage Amount
Choose a coverage amount that is more than fifteen times your annual income. This amount will help you cover your daily expenses, debits, and future financial needs without you.
- Check Nominee or Beneficiary Option
If you choose a nominee for your policy, it will provide you with a complete advantage, as the person you select will continue the term insurance in your absence. So reading the nominee policy is a must.
What is Claim Settlement Ratio Analysis?
Claim settlement ratio (CSR) plays a vital role in choosing a term insurance plan in India, and checking is one of the crucial things. It shows the percentage of the insurance total amount that the insurer has paid out compared to the total claims they received within a year.
A high CSR means 99 per cent or more, which shows the insurer is more reliable when it comes to paying out claims. Another benefit of measuring claim settlement benefits is that it assures your family will get the total amount of your claim without any unnecessary delays or disputes.
Let’s understand with an example, in the recent study, Max Life touched an impressive 99.70 per cent claim settlement ratio; on the other hand, HDFC had 99.40 per cent. These data show excellent trust and efficiency in managing claims. Additionally, choosing an insurer with a higher rate can provide you with a complete guarantee and reduce the claim risk for your family.
An efficient CSR means that payouts are done on time, less stress on the family, and the difficult emotional process becomes slightly easier to endure. It proves that the company has had a good track record of honoring their commitments to policyholders.
To sum up, whenever you compare term insurance, always choose those insurers who have had a CSR of an A rating, year after year. It will ensure the policy is going to work when time really matters.
What Do You Mean by Sum Assured and Premium Calculator?
Choosing the correct term insurance sum assured is very necessary to ensure that your family is financially secure in case something does happen to you. A generic way to decide is to look at the 10–15x annual income rule. For instance, if your yearly earnings are around ₹8 lakhs, your sum assured should lie somewhere between ₹80 lakhs and ₹1.2 crore. This amount is expected to meet the usual living expenses, loans, and other subsequent needs of the kind that include children’s education.
The other route is the Human Life Value (HLV) calculation method. It uses your income, expenses, savings, and future financial goals to calculate the exact amount of coverage that you ought to have. It is a more customised approach to determining adequate funds for your family to keep up with the lifestyle.
If you are planning coverage, never set aside your capability to pay. The higher the sum assured, the more security it offers, yet it requires the highest premium. Later, use premium calculation tools online to learn from various combinations of coverage amounts and premiums, to be genuinely confident that you have picked a premium the family can comfortably afford without giving away vital protection.
The name of the game is financial stability for loved ones, with affordability for you through to the end.
Why Should You Buy Term Life Insurance?
Buying term life insurance carries a wide variety of benefits. Here is a list of points that help you understand why you should purchase term life insurance.
1. Protect Family Wealth
If you want to secure your family financially, then you should buy term life insurance. These types of insurance help you safeguard your property in crucial times. If something happens immediately with you, it will help your family manage all medical or financial expenses, which will work as a safety net for them. These provide a wide variety of benefits to your loved ones.
2. With Term Insurance, You Can Save Your Assets
Another prominent benefit of term insurance is that it helps you protect your assets. Suppose you have loans such as home loans, car loans, or other types of loans. By using your term plan, you can easily fulfil all your financial needs and make your family debt-free. With these, your family can manage their daily expenses in your absence.
3. Term Insurance Makes You Prepared for Instabilities
We can not expect what will happen in the next movement. There are a wide variety of unexpected circumstances we have seen, such as COVID, which changed the situation all over the world within a few days, so preparing for these is vital. While term insurance helps you in tackling these situations easily, it plays a key role and works as a backup plan for critical situations. Having insurance gives your family financial help that helps them stay strong in bad times.
4. Offers Mental Peace
For your peace of mind, term life insurance is the best, as when a critical time comes, it will carry a lot of burden, and with the help of insurance, you can easily tackle the situation and maintain your peace of mind.
5. Term Life Insurance Carry Tax Benefits
Tax benefit is also a crucial benefit of term insurance. According to the Indian Constitution, Section 80C of the Income Tax Act 1961, you can claim a deduction on your premiums, which will help you save your tax money. Additionally, if you claim the death amount, that money typically becomes tax-free.
6. Term Insurance is a Budget-Friendly Life Cover
If you are from a middle-class family and want to protect your family in your absence, then you should choose term life insurance, as these plans give your loved ones protection in critical situations. After your death, these plans provide premiums for your family, which helps them manage their expenses and take care of them. These planes come at the lowest price so that everyone can afford them.
What are the Specifications of Term Insurance in India?
There are wide features of term insurance, whether it is a 30-year term or a 40-year term. These are ideal and can safeguard your family in critical scenarios. Let’s understand a few core features of term insurance that you should know.
Budget-Friendly Premium Structure
Term insurance is a cost-effective and suitable option for a middle-class person. With its cost, everyone can protect their family’s future without them. By taking small annual premiums, everyone can take full benefits, as these policies do not require a heavy investment. If you are looking for a low investment with high returns, then go with these term policies and get life-long cover.
Complete Life Protection
As compared to other plans that only provide you with short-term benefits, term life insurance offers you and your family lifelong financial protection, enabling them to stay strong financially.
Term Insurance is Affordable
It is one of the most crucial features that these plans are reliable for your budget. These do not require lots of investments to protect your life and your family’s life. By investing a small amount, you can make your parents’ lives stronger even after your absence.
Simple to Buy
If you think purchasing a term insurance is a difficult task than you are not right. Buying a plan is one of the easiest tasks; you only need to visit the official website or platform of a reliable plan provider and provide the required documents to buy the plan. Once you have done all the processes, your plan will be activated. You can also do it offline; you can reach out to agents, and they will help you with all processes.
- Term Plan Does not Require Low Age
Another specification of term insurance is that it does not require higher age limits; to take premiums, you must be 18 years old, which shows that you can secure your family’s future from an early age with a basic plan.
Who Should Buy a Term Insurance Plan?
There is a wide range of people who can buy premium, who are looking to save their family even after their death, depending on their age. Let’s understand in detail who is eligible to purchase insurance premiums for their family’s future.
1. Young Professionals Can Buy
Are you a young professional and do you have a responsibility on your head, then you can take a premium. Taking plans too early can provide you with long-term benefits. If you choose the plan at this age, your plan will be low, but by the time it matures, it can lead to a higher amount and provide your loved ones with complete financial security.
2. Newly Married People Also Take Advantage of Term Insurance
Buying term insurance just after marriage can be a vital move for your family. After marriage, a plan ensures the complete protection of your family’s future. Selecting the plan that suits your needs is essential, so choose wisely and secure your loved ones.
3. Working Women Can Purchase a Term Insurance Plan
Being a working woman, choosing a term plan can be a reliable way to secure a future. In the current society, women are dominating the world, and they are capable of managing their financial needs. In addition to choosing a plan, it can allow them to secure their future, and they can also get extra advantages in their bad health conditions or case of death. However, term plans provide additional benefits for women, which allows they to afford a plan.
4. Self-Employed Person
Self-employed individual should have term insurance regardless of the size of their business and how many dependents they have. When you are running your business, having insurance can save your business from future financial crises, as it offers stability.
5. Taxpayers Can Buy
According to the Indian Constitution, Section 80C and the Income Tax Act, 1961, allow people to save their taxes if they are eligible. With the help of this act, the person who wants to save taxes can do so.
What are the Different Types of Term Insurance in India?
When it comes to types of term insurance plans, there are several kinds that come into the list. Here are a few of them given below according to your needs and preferences.
1. Level Premium Plan
It is a type of term plan in which the user gets a sum assured or life cover that remains consistent for the whole tenure of the plan against a fixed monthly or annual payment.
2. Increasing Term Plan
In this plan, the coverage amount grows each year, helping you keep up with inflation. Many users prefer this option to manage increasing costs.
3. Term Insurance with Return of Premium (TROP)
In this plan, your dependents get financial security at budget-friendly premium rates in the event of your death. If you survive the policy term, all the premiums you paid are returned to you.
4. Joint Term Insurance
It is a life plan that is shared with couples. Both the couples and their children are covered under a single policy. It is the best plan for a nuclear family as it covers all the members of the family.
5. Term Plan for Non-Resident Indian (NRI)
If you live in other countries and want to take out insurance in India, then you can do so. Non-Resident Indian people get their premium through video or telemedical checkups and enjoy an 18% GST exemption along with an extra 5% discount on the annual plan premium payment.
Term Life Insurance Policy vs. A Whole Life Insurance Policy: What is the Difference?
Let’s understand the core difference between term life insurance and a whole life insurance plan with the table.
Specifications | Term Life Insurance | Whole Life Insurance |
Duration of Coverage | In a term life plan, the policyholder chooses a fixed duration for coverage, and protection is available only within that selected period. | A whole life insurance policy lasts for the insured’s entire lifetime, usually up to age 100 or above, provided the premiums are paid consistently. |
Policy Amount | The policy amount is generally lower compared to a whole life plan, owing to it covering a fixed time. | The premium is higher than others, as this plan covers lifelong coverage and provides add-on features for the long term. |
Purpose | Term life insurance mainly deals with providing financial protection to your loved ones in your absence. | A whole life plan offers complete financial protection to your family till you are 100 years old. A longer premium allows you to secure lasting financial support and leaves something for your parents. |
Payment on Survival | Term insurance provides you with coverage only if you die before the completion of the plan; if not, it does not offer any benefits, but it gives life coverage. | While whole life insurance premiums offer benefits till the age of a hundred years, there are no payout options available. |
Provided Tax Benefits | This premium plan offers tax fee benefits for death under the India Constitution section 80C | Same as term life insurance |
How to Buy a Term Life Insurance?
If you are searching for how to buy term life insurance to secure your family’s future, then you need to stop searching. Here are a few crucial steps mentioned below that can help you.
Step 1. Go to the official website or application and choose a reliable plan that fits your needs.
Step 2. Now, leverage the insurance calculator to check your premium according to the sum assured and policy period. By using this tool, you can make it easier to find a plan that best aligns with your budget.
Step 3. Select a term plan and think about including riders, including critical illness coverage or accidental death benefit. These add-ons provide additional security in particular situations.
Step 4. Now, complete the application by providing the necessary details such as ID, permanent address, and proof of income. Once you have provided all the required details, upload your documents. However, you may be asked to share medical information for the underwriting process.
Step 5. Make your premium payment, and do not forget to carefully read all the documents related to your policy. It is suggested that you review all the terms & conditions before submitting your document.
Why is Buying Term Insurance Online the Best?
- Low Policy Cost
As compared to choosing a policy through agents, it can demand a high cost as there is commission involved. On the other hand, buying insurance online does not demand any commission or fee, which can help you save your pocket.
- Online Premium Offers, Offers & Discounts
Purchasing a plan online provides you with offers and discounts that enable you to secure high coverage without spending a huge budget.
- Transparency
Another advantage of buying a plan online is that you can read all the details of your plan, terms & conditions, and benefits directly without any hidden facts. It is the best transparent way.
- Requires Less Effort and Time
Selecting online term insurance does not require a lot of time and effort. You need to visit the website or app and choose the term plan that suits your preferences.
- Safe & Secure Process
One of the most crucial benefits of online premium is that the complete process is secure; no one can view or access your details.
What are the Common Mistakes to Avoid While Buying Term Insurance?
There are so many mistakes that you need to avoid while choosing a term life insurance plan. Let’s discover one by one.
- Not Reviewing Policy Consistently
Your policies demand changes by the time. Review your policy and update it so that you can easily get your coverage amount without any effort.
- Buying Too Late
Term insurance premium increases with your age. Delaying purchase until your 30s or 40s makes the premium much higher than in your 20s. It is most reliable to buy at an early age so that you have a steady income.
- Selecting Insufficient Cover Amount
If you are going to choose a term plan, selecting a low assured amount can be the biggest mistake. Moreover, the amount may not suit your family’s financial needs. You should go with the premium that aligns with your overall responsibilities and future needs.
- Not Reviewing Claim Settlement Ratio (CSR)
Claim Settlement Ratio (CSR) plays a vital role in understanding how many claims the company settles. A high CSR shows that the company is reliable and increases the chances that your family will get your claim.
- Do Not Choose Add-Ons
There are so many people who do not go for the add-ons, including illness or disability cover. If you choose these, you can easily boost your term plan and provide an extra layer of protection during complex times.
What Do You Mean By a Term Insurance Calculator?
The term insurance calculator is a free online tool that helps you estimate the right premium for the coverage you want. These term calculator considers details such as your age, policy term, life cover amount, and other factors to provide an estimated premium based on your profile.
Using an online calculator, you can easily compare and choose the best term plan that aligns with your budget and requirements. Tools also ensure that you choose a plan that protects your family’s financial future in your absence.
Best Term Insurance Plans in India: Concluding Words
The term life insurance is an agreement where the insurer pays a fixed amount to the nominee if the insured dies. It helps families stay financially secure during tough times. These plans can cover significant expenses like a house or education, as well as smaller needs. When choosing a term plan, always consider your needs, compare benefits, and pick the one from the above list that best secures your family’s financial future. Visit our other post on the best health insurance in India to get a broad insight into the insurance landscape.
Frequently Asked Questions?
Let’s take a look at a few common frequently asked questions related to the best term life insurance, as asked by users.
Question. Which is the top term insurance plan to purchase?
Answer. There are wide plans available to meet your needs and requirements. Explore the list mentioned above to get more clarity about the plan to secure families’ financial future.
Question. Can I purchase a term insurance online plan?
Answer. Yes, you can easily purchase a term insurance plan online. Doing this offers many advantages, such as better comparison of different plans, access to online discounts from insurers, and faster policy issuance.
Question. What does sum assured mean in term insurance?
Answer. The sum assured is the fixed amount you choose when buying the policy. This amount is given to your nominee if you pass away during the policy term. The correct sum assured depends on your family’s monthly needs, lifestyle expenses, and future goals.
Question. Does a term insurance policy cover natural death?
Answer. Yes, term insurance covers both natural and accidental death. However, there are a few exceptions, like suicide within the waiting period or hiding important health or lifestyle details while buying the policy.