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What are the Best Term Insurance Plans in India?

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What are the Best Term Insurance Plans in India?

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If the pandemic taught us anything, it is to know one can never be too prepared for the future. When a global catastrophe as precarious as Covid19 hit the world, it was pretty clear that our future needs to be secured. Because the future is uncertain, you can find your rare crumb of relief in some of the best term insurance plans available in India. 

Term insurance plans are pure life insurance policies providing complete coverage for a designated time. When the policyholder encounters untimely death within the specified duration of an active policy, the sum assured is given to the nominee. In short, you can now protect your family both in your presence and absence. Today, with the right term insurance policy, securing your future is just a premium away. 

Consider the following factors before choosing the best term insurance plan 

  • Understand Your Needs 

Chalking out your primary purpose will assist you in shortlisting a term insurance plan suitable for you. Get the measure of your existing lifestyle, future ambitions and potential shortcomings that might come your way. Upon considering all the facets of your life, go for the plan that aligns with your way of living. 

  • Study the Policy 

The perks of being an aware consumer are ample. Having a thorough knowledge of the shortlisted policy is advisable. Do not limit yourself to the information provided by relatives, insurance agents or friends. While they keep your best interests at heart, you are always the best judge of your requirements. Take time to understand the policy features and its advantages or disadvantages. Store all the necessary information, organize and evaluate to make a wise choice.

  • Measure the Risk Coverage

Safeguarding your risk forms the crux of a term insurance policy. An insurance provider furnishes compensation to the deceased's family members against the sum of the insurance premium. Going for a plan which provides maximum risk coverage is always a better option.

A thumb rule to calculate your risk coverage is by taking 10x or 15x of your annual income. But this is just a quick way to measure. There are other details that go into finding your actual cover amount. 

  • Pick rewarding add-ons

You will find valuable add-ons to expand the benefits of your term insurance plan. These add-ons are also known as riders, which are additional terms to supplement your base policy. It provides extended coverage and increased risk protection. Though it comes with an extra cost, you won't have to buy a legion of policies to mitigate multiple risks. For starters, you can top up your basic plan with add-ons like Critical illness cover, Accidental Death Cover, etc. 

  • Watch out for the Claim Settlement Ratio(CSR)

Claim Settlement Ratio should be your best friend if you plan to go for a term insurance policy. It offers the actual percentage of settled claims by the insurer out of the gross claims received annually. Opting for a policy with high CSR is recommended. It implies that your insurance provider enjoys a high claim clearing rate. 

The best Term Insurance plans have the following benefits.

  • Affordable Premiums

Today, you can get a one-crore insurance cover without making a dent in your pocket. Since the premium reflects the cost of insuring the policyholder’s life, many possess the chance of enjoying low premiums. Like healthy people will find themselves paying lesser premiums. Non-smokers pay lesser premiums, and women need to pay even lesser premiums than men. The premium also depends on your age. So, the younger you are, the lesser your premiums will be. Hence, starting a policy in your twenties rather than your thirties or later is always advisable.

  • Flexible Policy Tenure 

The best term insurance plans have a flexible tenure. The term tenure starts once the policy is purchased and continues until the mentioned age in the policy. The policy ends when the insured crosses the period mentioned in the policy or after the claim has been paid in the event of the insured’s death. The tenure duration can vary depending upon the policyholder’s requirement. If you opt for the policy at a younger age, your premiums will be lower, and the sum assured higher. 

  • Availability and Transparency

Today, term insurance policies are easily accessible online. Whether you want to purchase it via the web or seek the help of an insurance agent, getting insured has become hassle-free. With multiple policies dished out by reliable institutions, the process vouches for transparency. 

  • Availing Tax Benefits

If you go for a term insurance policy, you are entitled to receive tax benefits. Section 80C of the Income Tax Act,1961 mentions that term policies fall under life insurance plans and are liable to receive tax deductions up to Rs 1,50,000 for the paid premium. But, to be eligible for the tax benefits, the premium paid should be less than 10% of the total assured sum. 

Some of the best Term Insurance plans in India

Now that we’ve got the basics out of the way, below is a list we’ve churned out of some of the best term insurance plans available today. Have a look. 

LIC Tech Term Plan 

LIC tech term plan provides full life coverage and is only available online. It is a non-profit and non-linked policy providing higher coverage at minimal premiums in the scenario of the untimely death of the person insured. The plan comes in two options: Level Sum Assured and Increasing Sum Assured. Let's dig deeper into the plan's features:

Level Sum Assured

Increasing Sum Assured

The sum assured will remain the same for the entire policy duration. 

  • For the first 5 years, the sum assured will remain the same. 
  • From the 6th year, the amount increases by 10%. It continues up to the 15th year until the initially assured sum doubles.
  • From the 16th year, the assured sum is twice the original sum. It remains the same for the rest of the policy tenure.

In comparison, this plan is inexpensive since no mediator is involved. You can purchase the policy by connecting directly to the company through their website. 

Eligibility check

Entry Age Bandwidth: 18 - 65 years

Maturity Age Bandwidth: 28 - 80 years

Policy Term Tenure: 10 - 40 years

Guaranteed Sum: ₹50 Lakhs and Above

Premium Payment Pattern: Annually or Semi-Annually

CSR: 96.69%

HDFC LIFE Click 2 Protect Plus 

HDFC LIFE Click 2 Protect Plus is an umbrella plan providing insurance coverage to the policyholder and the family at affordable rates. You can customize the programs to meet your requirements. They offer a range of options such as Life Option, Extra Life Option, Income Option and Income Plus Option. It comes with a basket of benefits, significantly the surrender benefit. If you decide to terminate the policy, you can do so by paying a surrender value to the company. 

The USP of the plan lies in the high Claim settlement ratio coupled with a broad tenure period. 

Eligibility check

Entry Age Bandwidth: 18 - 65 years

Maturity Age Bandwidth: up to 75 years

Policy Term Tenure: 5/10 - 85 years

Guaranteed Sum: ₹25 Lakhs and Above

Premium Payment Pattern: Annually, Semi-Annually, Quarterly and Monthly

CSR: 99.07%

Max Life Smart Secure Plus Plan

Max Life Smart Secure Plus Plan is your go-to plan for future contingencies. The scheme comprises two death benefits options and several in-built add-ons like an exceptional exit benefit or the cover for terminal illnesses. It also helps you by offering optional perks such as premium breaks and joint life cover. The beauty of the plan lies in its totality since you can customize it as per your needs. Let us explore the death benefits.

  • Life Cover: The assured sum remains the same during the entire policy duration.
  • Increasing Life Cover: The assured sum rises annually by 5% every year since the initiation of the policy. It is important to note that the sum value increases up to a maximum of 200% of the originally assured sum. 

The key feature of the plan is the importance accredited to health, especially critical and terminal illnesses. It applies to all the diseases covered under the policies of the company. Also, the availability of multiple riders helps you expand your coverage and realize the benefits. 

Eligibility check

Entry Age Bandwidth: 18 - 65 years

Maturity Age Bandwidth: up to 65/85 years

Policy Term Tenure: 5/10 - 67 years

Guaranteed Sum: Varies as Per Plan

Premium Payment Pattern: Annually, Semi-Annually, Quarterly and Monthly

CSR: 99.22%

SBI Life eShield Plan 

If you want high-risk coverage at reasonable rates, SBI Life eShield Plan is ideal. You can buy it online, and the process is relatively straightforward. It provides comprehensive coverage to the policyholder and ensures the family against unforeseeable circumstances. SBI’s eShield presents an accidental death benefit rider and lower premiums for both women and non-smokers. You can also get hold of tax benefits with this insurance plan. The policy comprises four different plans:

  • Level cover: The Assured sum remains the same throughout the policy tenure
  • Level cover with an accidental death benefit: In addition to the assured sum, it provides death coverage due to accidents within the policy tenure. 
  • Increasing cover: After every 5 years of tenure, the assured sum increases. The premium remains the same for the entire policy duration.
  • Increasing cover with an accidental death benefit: Accompanying the perks of the increasing cover package, it provides death coverage due to accidents within the policy tenure. The value of the accidental death coverage does not increase in the policy tenure. 

The plan encourages you to make your desired pick based on your requirements.

Eligibility check

Entry Age Bandwidth: 18 - 60/65 years

Maturity Age Bandwidth: up to 70 years

Policy Term Tenure: 5/10 - 30 years

Guaranteed Sum: Minimum ₹20 Lakhs

Premium Payment Pattern: Annually

CSR: 94.52%

ICICI Pru iProtect Smart Term Plan

ICICI Pru iProtect Smart Term Plan possesses all the features to be the best term insurance plan. It provides high-risk coverage at an affordable sum and a broad scope of illnesses, including AIDS. You can make your choice between Critical illness Benefits and Accidental Death benefits. Moreover, the Flexible protection and Flexible Payout options with an enhanced protection cover helped it achieve the best term insurance provider 2017- 2018 award. 

Are You Eligible? 

Entry Age Bandwidth: 18 - 65 years

Maturity Age Bandwidth: up to 70 years

Policy Term Tenure: 5 - 40 years

Guaranteed Sum: Varies as Per Plan

Premium Payment Pattern: Annually, Semi-Annually, Quarterly and Monthly

CSR: 97.84%

Wrapping up

Amidst an ocean of term insurance alternatives, it is alright to feel overwhelmed. While some policies offer a broad tenure, others have better CSR. Few others offer exciting add-ons, and some come at an affordable cost. There can be no single answer to which is the best term insurance plan for you. There are multiple factors like age group, income, health status, number of family members, age group and income of the family members, amongst others which come into play in selecting a policy tailor-made for you and your family. It is crucial first to analyse your situation, estimate and evaluate your resources, and measure your expectation. Hence, do remember that organising today will prepare you for a better tomorrow. 

Frequently Asked Questions

1. Which bank is best for the term plan?

When it comes to term insurance policies, one size cannot be the apt fit for all. Based on the specifics of the need, various plans from different banks can fit the bill. Nevertheless, term plans from both HDFC and Max Life look promising. 

2. How do I choose the best term insurance plan?

The best term insurance plan should take care of your family’s income requirements after your demise. A high-risk coverage policy can be a good option if it meets your desired criteria. Also, go for the add-ons that help you provide the maximum coverage and select a policy with high CSR. 

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