5 Best Term Life Insurance Plans in India: Full Details, Features, Benefits, and How to Select
A term life insurance plan in India is a popular choice for individuals looking to provide financial protection to their families or other beneficiaries in the event of their untimely demise. It is a simple and affordable way to ensure that your loved ones are financially secure even in your absence.
In this article, we will take a look at the best term life insurance plans in India, including their features, benefits, and factors to consider when selecting the best term life insurance plan in India.
Consider reading Types of Insurance in India – 7 Key Things to consider
Page Contents
How Does Term Life Insurance Plan Work in India?
A term life insurance plan is a contract between the policyholder and the insurer, in which the insurer agrees to pay a sum of money (the death benefit) to the policyholder’s beneficiary in the event of the policyholder’s death during the policy term.
The policy term is the length of time for which the policy is in effect, and it can range from 5 years to 30 years or more, depending on the policy.
The policyholder pays a premium to the insurer at regular intervals (monthly, quarterly, or annually) in exchange for the death benefit. If the policyholder dies during the policy term, the insurer pays the death benefit to the beneficiary.
If the policyholder survives the policy term, the policy expires and the coverage ends. The policy does not have any cash value and does not pay out any benefits to the policyholder or their beneficiaries if the policyholder is still alive at the end of the policy term.
Consider reading: Best Short Term Investment Options in India
Features of Term Life Insurance Plans in India
Here are some of the features of Term Life Insurance Plans in India:
- Coverage Amount: The coverage amount is the sum of money that the insurer agrees to pay to the policyholder’s beneficiary in the event of the policyholder’s death. The policyholder can choose the coverage amount based on their financial needs and obligations, such as outstanding debts, mortgage payments, children’s education expenses, and other financial responsibilities.
- Policy Term: The policy term is the length of time for which the policy is in effect. The policyholder can choose the policy term based on their age, financial obligations, and other factors.
- Premium Payment Frequency: The policyholder can choose the premium payment frequency based on their convenience. Most term insurance policies offer the option of paying premiums on a monthly, quarterly, or annual basis.
- Premium Payment Mode: The policyholder can choose the premium payment mode based on their convenience. Most term insurance policies offer the option of paying premiums through online payment gateways, debit or credit card, or direct debit from a bank account.
- Rider Options: Term insurance policies in India offer various rider options that can be added to the policy to enhance coverage. Some of the common rider options include accidental death benefits, critical illness coverage, and waiver of premium.
Benefits of Buying a Term Life Insurance Plan in India
There are several benefits of buying a term life insurance plan in India. Here are a few key benefits of buying a Term Life Insurance Plan in India:
- Financial protection for the family: Term life insurance provides financial protection to the policyholder’s family in the event of the policyholder’s death. The policy pays out a lump sum amount to the beneficiary, which can be used to meet the policyholder’s financial obligations, such as mortgage payments, children’s education expenses, and other debts.
- Affordable premiums: Term life insurance premiums are generally more affordable compared to other types of life insurance policies. This makes it an ideal option for individuals who are looking for a cost-effective way to provide financial protection to their families.
- Flexibility: Term life insurance offers flexibility in terms of the policy term, coverage amount, and premium payment frequency. Policyholders can choose the policy term and coverage amount based on their financial needs and obligations, and the premium payment frequency based on their convenience.
- Simplicity: Term life insurance is a simple insurance policy that does not require the policyholder to pay premiums for the entire policy term. This makes it an ideal option for individuals who are looking for a basic and affordable life insurance policy.
- Tax benefits: Term life insurance premiums are eligible for tax deductions under Section 80C of the Income Tax Act. This can help policyholders save on their income tax outgo.
How to Select the Best Term Life Insurance Plan in India?
Selecting the best term life insurance policy in India depends on your financial needs and goals.
Here are a few factors to consider when choosing a term life insurance policy:
- Coverage amount: Choose a coverage amount that meets your financial needs and obligations, such as outstanding debts, mortgage payments, children’s education expenses, and other financial responsibilities.
- Policy term: Choose a policy term that aligns with your age, financial obligations, and other factors.
- Premiums: Compare the premiums of different term life insurance policies to find the most cost-effective option.
- Claim settlement ratio: Consider the claim settlement ratio of different insurance companies before buying a policy. A high claim settlement ratio indicates the company’s financial stability and ability to pay out claims. Each year IRDA publishes the IRDA claim settlement ratio for each insurance company.
- Policy exclusions: Review the exclusions of different term life insurance policies to understand what is not covered by the policy.
- Rider options: Consider adding rider options to your term life insurance policy to enhance the coverage.
- Company reputation: Choose an insurance company that has a good reputation and is financially stable.
- Customer service: Consider the customer service offered by different insurance companies before buying a policy.
It is important to carefully review the terms and conditions of different term life insurance policies and compare the features and benefits before making a decision. It may also be helpful to seek the advice of a financial advisor or insurance broker before choosing a term life insurance policy.
Consider reading: Types of Mutual Funds in India
Mistakes to Avoid While Buying Term Insurance in India
Here are some mistakes to avoid when buying term insurance plan in India:
- Not comparing policies: It is important to compare policies from different insurers to ensure that you are getting the best coverage at the most affordable price.
- Not disclosing pre-existing medical conditions: Failing to disclose pre-existing medical conditions can result in your claim being denied.
- Not reading the fine print: It is important to thoroughly read and understand the terms and conditions of the policy before purchasing it.
- Not reviewing the policy periodically: Life insurance needs and circumstances change over time. It is important to review your policy periodically to ensure that it still meets your needs.
- Not purchasing sufficient coverage: It is important to purchase sufficient coverage to ensure that your loved ones are financially protected in the event of your death or disability.
- Not considering the option to convert to a permanent policy: Some term insurance policies allow you to convert to a permanent policy, such as whole life insurance, without the need for a medical exam. This can be a good option if your health has changed since purchasing the term policy.
- Purchasing insurance for the wrong reasons: Insurance should be purchased to protect against financial loss, not as an investment.
5 Best Term Life Insurance Plan in India in 2023
The Top 5 Best Term Life Insurance plans in India in 2023 are as below:
- LIC e-Term Insurance Plan: LIC’s e-Term insurance plan is a term life insurance policy that is available online. It provides coverage for a specific term, or length of time, and pays a death benefit to the beneficiary if the policyholder dies during the term of the policy. The policy does not have any cash value and does not accumulate any savings or investment component.
- SBI eShield: SBI eShield is a term insurance plan offered by the State Bank of India (SBI) that provides financial protection to the policyholder’s family in the event of the policyholder’s death. The plan offers a coverage amount of up to Rs. 1 crore and a policy term of up to 30 years. The policy also offers various rider options such as accidental death benefits, critical illness coverage, and waiver of premium. The premium for this plan is affordable and can be paid on a monthly, quarterly, or annual basis.
- HDFC Life Click 2 Protect Plus: HDFC Life Click 2 Protect Plus is a term insurance plan that offers a coverage amount of up to Rs. 50 crore and a policy term of up to 50 years. The plan also offers various rider options such as accidental death benefits, critical illness coverage, and waiver of premium. The premium for this plan is competitive and can be paid on a monthly, quarterly, or annual basis.
- ICICI Prudential iProtect Smart: ICICI Prudential iProtect Smart is a term insurance plan that offers a coverage amount of up to Rs. 50 crore and a policy term of up to 50 years. The plan also offers various rider options such as accidental death benefits, critical illness coverage, and waiver of premium. The premium for this plan is competitive and can be paid on a monthly, quarterly, or annual basis.
- Max Life Online Term Plan Plus: Max Life Online Term Plan Plus is a term insurance plan that offers a coverage amount of up to Rs. 50 crore and a policy term of up to 40 years. The plan also offers various rider options such as accidental death benefits, critical illness coverage, and waiver of premium. The premium for this plan is competitive and can be paid on a monthly, quarterly, or annual basis.
LIC e-Term Life Insurance Plan
LIC Claim settlement Ratio in 2022: 98.62%
Here are the complete features and details of the LIC e-Term Life Insurance Plan:
| Feature | Description |
|---|---|
| Coverage | In case of death, the beneficiary can file a claim online for the death benefit. |
| Term options | Choices of 5, 10, 15, 20, 25, or 30 years. |
| Premiums | Generally lower than traditional policies. Calculated based on age, gender, health, and coverage amount. |
| Online application | Can be applied for and purchased online. |
| No cash value | Does not have any cash value; no savings or investment component. |
| Riders | Option to add additional coverage such as accidental death benefit or critical illness coverage. |
| Claim settlement | Premiums are tax deductible under section 80C. The death benefit is tax-free under section 10(10D) of the Income Tax Act. |
| Eligibility | Available for individuals aged 18 to 65. Maximum coverage amount varies based on age and term length. |
| Tax benefits | Premiums are tax deductible under section 80C. Death benefit is tax-free under section 10(10D) of the Income Tax Act. |
SBI eShield Term Life Insurance Plan
SBI Life Claim settlement ratio in 2022: 93.09%
SBI eShield is a term life insurance plan offered by the State Bank of India (SBI) that provides financial protection to the policyholder’s family in the event of the policyholder’s death.
Here are some of the features and details of the SBI eShield term insurance plan:
| Feature | Description |
|---|---|
| Coverage Amount | Up to Rs. 1 crore, chosen based on financial needs such as debts, mortgage, children’s education, etc. |
| Policy Term | Up to 30 years, chosen based on age, financial obligations, and other factors. |
| Premium Payment Frequency | Options of monthly, quarterly, or annual payments. |
| Premium Payment Mode | Options include online payment gateways, debit or credit card, or direct debit from a bank account. |
| Rider Options | Accidental death benefit, critical illness coverage, waiver of premium, etc. |
| Eligibility | – Minimum age: 18 years |
| – Maximum age: 65 years | |
| – Minimum policy term: 5 years | |
| – Maximum policy term: 30 years | |
| Exclusions | – Suicide or self-inflicted injury within 1 year |
| – Death from war, terrorism, hazardous activities | |
| – Death from undisclosed pre-existing conditions | |
| Claim Process | Submit policy documents, death certificates, and medical certificates. The process might vary based on chosen rider options. |
HDFC Life Click 2 Protect Plus Term Life Insurance Plan
HDFC Life Claim settlement ratio in 2022: 98.01%
HDFC Life Click 2 Protect Plus is a term life insurance plan that provides financial protection to the policyholder’s family in the event of the policyholder’s death. Here are some of the features and details of the HDFC Life Click 2 Protect Plus term insurance plan:
| Feature | Description |
|---|---|
| Coverage Amount | Up to Rs. 50 crore, chosen based on financial needs such as debts, mortgage, children’s education, etc. |
| Policy Term | Up to 50 years, chosen based on age, financial obligations, and other factors. |
| Premium Payment Frequency | Options of monthly, quarterly, or annual payments. |
| Premium Payment Mode | Options include online payment gateways, debit or credit card, or direct debit from a bank account. |
| Rider Options | Accidental death benefits, critical illness coverage, waiver of premium, etc. |
| Eligibility | – Minimum age: 18 years |
| – Maximum age: 60 years (for a policy term of up to 40 years) | |
| – Maximum age: 55 years (for a policy term of up to 50 years) | |
| – Minimum policy term: 5 years | |
| – Maximum policy term: 50 years | |
| Exclusions | – Suicide or self-inflicted injury within 1 year |
| – Death from war, terrorism, hazardous activities | |
| – Death from undisclosed pre-existing conditions | |
| Claim Process | Submit policy documents, death certificates, and medical certificates. The process might vary based on chosen rider options. |
ICICI Prudential iProtect Smart Term Life Insurance Plan
ICICI Pru Life Claim settlement ratio in 2022: 97.90%
ICICI Prudential iProtect Smart is a term life insurance plan that provides financial protection to the policyholder’s family in the event of the policyholder’s death. Here are some of the features and details of the ICICI Prudential iProtect Smart term insurance plan:
| Feature | Description |
|---|---|
| Coverage Amount | Submit policy documents, death certificates, and medical certificates. The process might vary based on chosen rider options. |
| Policy Term | Up to 50 years, chosen based on age, financial obligations, and other factors. |
| Premium Payment Frequency | Options of monthly, quarterly, or annual payments. |
| Premium Payment Mode | Options include online payment gateways, debit or credit card, or direct debit from a bank account. |
| Rider Options | Accidental death benefits, critical illness coverage, waiver of premium, etc. |
| Eligibility | – Minimum age: 18 years |
| – Maximum age: 60 years (for a policy term of up to 40 years) | |
| – Maximum age: 55 years (for a policy term of up to 50 years) | |
| – Minimum policy term: 5 years | |
| – Maximum policy term: 50 years | |
| Exclusions | – Suicide or self-inflicted injury within 1 year |
| – Death from war, terrorism, hazardous activities | |
| – Death from undisclosed pre-existing conditions | |
| Claim Process | Submit policy documents, death certificates, and medical certificates. Process might vary based on chosen rider options. |
Max Life Online Term Plan Plus Term Life Insurance Plan
The Max Life Claim settlement ratio is 2022: 99.35%
Max Life Online Term Plan Plus is a term life insurance plan that provides financial protection to the policyholder’s family in the event of the policyholder’s death.
Here are some of the features and details of the Max Life Online Term Plan Plus term insurance plan:
| Feature | Description |
|---|---|
| Coverage Amount | Up to Rs. 50 crore, chosen based on financial needs such as debts, mortgage, children’s education, etc. |
| Policy Term | Up to 40 years, chosen based on age, financial obligations, and other factors. |
| Premium Payment Frequency | Options of monthly, quarterly, or annual payments. |
| Premium Payment Mode | Options include online payment gateways, debit or credit card, or direct debit from a bank account. |
| Rider Options | Accidental death benefits, critical illness coverage, waiver of premium, etc. |
| Eligibility | – Minimum age: 18 years |
| – Maximum age: 55 years (for a policy term of up to 40 years) | |
| – Minimum policy term: 5 years | |
| – Maximum policy term: 40 years | |
| Exclusions | – Suicide or self-inflicted injury within 1 year |
| – Death from war, terrorism, hazardous activities | |
| – Death from undisclosed pre-existing conditions | |
| Claim Process | Submit policy documents, death certificate, and medical certificate. Process might vary based on chosen rider options. |
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Closing Thoughts on Best Term Life Insurance Plans in India
Navigating the world of financial security can be daunting, but one thing remains clear: Term Life Insurance Plans in India are an essential pillar of sound financial planning.
They offer the peace of mind that, in unforeseen circumstances, your loved ones will be provided for. While there’s a myriad of choices available, it’s paramount to choose a plan that aligns with your personal and financial needs.
India’s dynamic insurance market is geared to meet diverse requirements, making it easier than ever to secure the future of your family.
So, if you haven’t yet, dive into the realm of Term Life Insurance Plans in India and invest in a promise of protection.
Remember, it’s not just about planning for the unexpected, it’s about ensuring a legacy for those you cherish the most.
FAQs on Best Term Life Insurance Plans in India
What is term life insurance?
Term life insurance is a type of insurance policy that provides financial protection to the policyholder’s family in the event of the policyholder’s death. The policy pays out a lump sum amount to the beneficiary, which can be used to meet the policyholder’s financial obligations, such as mortgage payments, children’s education expenses, and other debts.
How does term life insurance work?
Term life insurance works by providing financial protection to the policyholder’s family in the event of the policyholder’s death. The policyholder pays premiums for the policy term, and in the event of their death during the policy term, the beneficiary receives a lump sum amount as the death benefit.
How long does term life insurance last?
Term life insurance lasts for a specific period of time, known as the policy term. The policy term can vary from 5 years to 30 years or more, depending on the policy and the policyholder’s needs.
What happens if I outlive my term life insurance policy?
If the policyholder outlives the term of their term life insurance policy, the policy will expire and the coverage will end. The policyholder will not receive any payout or benefit from the policy.
Can I renew my term life insurance policy?
Some term life insurance policies allow policyholders to renew their policy at the end of the term. However, the premiums for a renewed policy may be higher due to the policyholder’s age and any changes in their health condition.
Can I convert my term life insurance policy to a permanent policy?
Some term life insurance policies allow policyholders to convert their term policy to a permanent policy, such as whole life or universal life insurance. The policyholder can typically do this without having to undergo a medical examination. However, the premiums for a permanent policy are usually higher compared to term life insurance premiums due to the added features and benefits of a permanent policy.
Which term insurance is best to buy in India?
When considering the best term insurance to buy in India, it is crucial to evaluate factors such as coverage, claim settlement ratio, and premium affordability. Conduct thorough research and compare policies from reputable insurers to find the one that suits your needs.
Which insurance company is best for term insurance?
The best insurance company for term insurance in India are LIC, ICICI Pru, SBI, HDFC, and Max. These companies offer top-notch term life insurance plans to secure your future. Choose the one that best suits your needs and provides comprehensive coverage at competitive premiums.
Which is better LIC or term insurance?
It depends on your individual needs. LIC (Life Insurance Corporation) offers a variety of insurance products, including term insurance. Term insurance plans in India generally have lower premiums compared to life insurance plans, but they don’t offer any maturity benefits. Evaluate your requirements and consider factors like cost, coverage, and benefits before deciding which option is better for you.
What is the most popular term for life insurance?
The most popular term for life insurance is term life insurance. It is the simplest and most affordable type of life insurance. With term life insurance, you are covered for a specific period of time, and if you pass away during the policy term, your beneficiaries will receive a death benefit. This type of life insurance provides financial protection when it is most needed.
