Best Term Insurance Plans
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Best Term Insurance Plans

No one is invincible these days. With uncertainties like death, disease and disability around the corner, an individual needs to buy the best term insurance plan to secure the financial future of his/her dependents. In India, 24 insurance companies offer online term insurance plans. It is because of this number that you may feel confused about who to trust with the financial future of your family. To ease your worries, below is a list of top 6 term insurance plans of 2020 which are highly effective and can assist during hard times. These plans are sold by companies that have the best claim settlement ratio in the market as per IRDA 2018-19 report.

Best 6 Term Insurance Plans in India of 2020

Sr. No.Company NameTerm Insurance PlansPolicy Term (years)Coverage (years)Minimum Sum Assured (Rs.)Claim Settlement Ratio 2018-19*
1.LIC of IndiaLIC Tech Term18-658050 Lakhs97.79%
2.ICICI Prudential LifeICICI Prudential iProtect Smart Term Plan18-6585, 9950 Lakhs98.58%
3.SBI LifeSBI Life eShield18-60, 6575, 8035 Lakhs95.03%
4.HDFC LifeHDFC Click 2 Protect 3D Plus Term Plan18,25-6575, 85, whole of life10,00099.07%
5.Max LifeMax Life Online Term Plan Plus18-608525 Lakhs99.22%
6.Kotak MahindraKotak e-term5-75Up to 4025 lakhs97.40%

**Last Updated on 14-09-2020

*The claim settlement ratio is taken from IRDA's Annual Report 2018-19.

1. LIC Tech Term Insurance Plan

It is a non-linked pure protection plan that offers the required financial protection to the insured's family in case of his/her unfortunate demise. Know More...

Features and Benefits

  • You can avail the plan through an online application process and no intermediaries will be involved.
  • Free look period of 30 days is provided by the company. The policyholder can return the policy (in that duration) if he is not satisfied by its clauses.
  • Non-Resident Indians (NRIs) will be covered under the plan even if they are not in the country but should be present in the country for the medical tests.
  • Premiums paid every year is applicable for deduction from the taxable income under Section 80C of the Income Tax Act, 1961.

2. ICICI Prudential iProtect Smart Term Plan

It is an effective term insurance policy that offers 360-degree coverage at an affordable premium. Know More...

Features and Benefits

  • It offers 4 payout options to the insured consisting of the lump sum, income, increasing income and lump sum plus income.
  • Female policyholders will get a special discount on the premiums.
  • Females will also get extensive coverage for cervical and breast cancer.
  • The surrender value is only applicable for a single premium.

3. SBI Life eShield

It is a non-linked and non-participating insurance plan which offers high coverage at minimal premiums. Know More...

Features and Benefits

  • The plan offers 30 days to review the terms and conditions of the policy. If you see a red flag during that duration, you are free to return the policy.
  • Under Section 80C of the Income Tax Act, 1961, you can enjoy tax exemptions on the regularly paid premiums.
  • SBI Life eShield offers 2 plan options- Increasing Cover and Level Cover. If you decide to go with increasing cover, your sum assured amount will increase by 10% after every 5 years of the policy tenure.

4. HDFC Click 2 Protect 3D Plus Term Plan

It is an exclusive term insurance policy that covers three uncertainties- death, disability, and disease. It is designed to target the needs of women and children. Know More...

Features and Benefits

  • If you are a female or non-smoker, you can grab the benefits of this plan at a low premium.
  • The plan offers the utmost flexibility to choose premium payouts, policy period, etc.
  • Regular premium payment in exchange for tax benefits is always an option, thanks to the Income Tax Act, 1961.
  • 9 plan options are available at your service. You can choose the ones to better suit your needs.

5. Max Life Online Term Plan Plus

It helps your family to fight the 3 Ds of life- Disease, Death & Disability. It offers the required basic life cover along with the increased monthly income options for your family in your absence. Know More...

Features and Benefits

  • You can enhance the cover by choosing optional riders such as accidental death, premium waiver, and critical illness covers by paying an additional premium.
  • The plan offers 2 variants of death benefits to choose from- income payout and lump sum.
  • Non-Resident Indians (NRIs) of selected countries can also take advantage of this policy.
  • The amount payable as a death benefit to the beneficiary(s) is also exempted from tax under Section 10 (10D) of the Income Tax Act, 1961.

6. Kotak e-Term Plan

It is an affordable yet effective pure life insurance plan that provides a death benefit to the family/nominee in the event of the death of the policyholder.

Features and Benefits

  • The policy offers a discount (lower premium) to women and non-tobacco users.
  • Premiums paid and benefits received from the policy are tax-free under Section 80C and Section 10 (10D) of the Income Tax Act, 1961.
  • You have the option to include Kotak Critical Illness Plus Benefit Rider and Kotak Permanent Disability Benefit Rider to enhance the policy coverage.

Which Factors Should Be Kept in Mind While Buying a Best Term Insurance Plan?

Claim Settlement Ratio: There is no point of having insurance if your claims are rejected by the provider. So, checking and comparing the claim ratio of insurance providers should be the topmost priority. Higher the claim ratio, higher will be your chances to get a green signal for your claims.

Solvency Ratio: In simple words, solvency ratio dictates whether a provider is financially capable to handle your claim at the time of an emergency. According to IRDA, the solvency ratio of an insurance provider should be 150% to minimize bankruptcy. Anything less than that gives a clear sign that the company would fail to clear your claims.

Consider Your Needs: There is a common misconception that people have- only higher premium plans should be taken into consideration. That's not the truth. Of course, there are a few variations but a lower premium plan would not prove to be useless for you. To decide between the two, you should compare the benefits/features of the different providers along with their premium costs. If the selected plan matches your needs, it should be your choice among the lot.

Customer Service: Customer service has become an important part of the buying model. You should evaluate every provider's customer care department to get a better view of its after-sales service. After all, your queries will be entertained by them in the future.

Reputation: Apart from the above factors, the overall reputation of the company is important as well. You should take a look at the provider's government records, AUM and IRDA's rules violation (if any). It will give you a brief idea of which providers are playing by the book.

Additional Riders: It's always better to get extra protection. Riders are known for that. But not all companies offer them to their customers. So, it's recommended to go with the insurance provider who has listed additional rider(s) in its umbrella of protection.

How Can You Purchase a Term Insurance Plan?

Generally, there are two ways to buy a term insurance plan- offline and online methods. In the offline method, you can directly speak to the agent of the company (who comes to meet you) or visit the provider's branch office. This approach is time-consuming. Instead, you should prefer the online method. It's simple and convenient.

Just visit the official site of the insurance provider or log on to PolicyX.com. Both will allow you to purchase the plan in no time.

FAQs

No, there are other factors along with claim settlement ratio which should be stressed upon before you choose a term plan. Those factors are explained in the above part of the write-up.

There are 24 insurance providers in the market. We have prepared the above list of 6 providers/plans based on the IRDA annual report and user interests. If none of the above suit your needs, you are free to consult with other 18 of them.

Yes, the provider can increase the premium amount or cancel the policy altogether.

Last updated on 14-09-2020