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Term Insurance Plans in India

Term insurance is an exclusive traditional form of life insurance plan that offers the required financial coverage to your family in your absence. It is not repayable if the policyholder survives at the maturity date. It can benefit the buyer’s family only in the event of death. Term Insurance is the best and cheapest insurance as one should take a high cover at very low premium rates.

In India, around 24 insurance companies are offering online Term Insurance Plans. Hence, it is difficult to choose the BEST among all for the secure future of our loved ones.

Let us choose the Best Term Insurance Plans in India by comparison. To ease your worries, we have listed the Top 6 Term Insurance Plans in 2019 which are highly effective and can help you in hard times. The data available is updated from time to time as per the latest plans with complete details.

Best Term Plans in India 2019

Term Insurance Plan Policy Term (Min-Max) Coverage Sum Assured (in rupees) Claim Settlement ratios (FY 2017-18) as per IRDA Accidental Death Benefit Critical Illness Benefit Waiver of Premiums Terminal Illness Benefit
LIC e-Term Insurance Plan 10-35 years 75 years 50 lakhs 98.04% N/A N/A N/A N/A
ICICI Prudential iProtect Smart Term Plan 10-30 years 75 years 8 lakhs 97.88% Paid N/A Free Free
SBI Life eShield 5-30 years 75 years 35 lakhs 96.76% Paid N/A N/A N/A
HDFC Click 2 Protect 3D Plus Term Plan 5-40 years 65 years 10 lakhs 97.80% Paid Paid N/A N/A
Max Life Online Term Plan Plus 10-35 years 85 years 25 lakhs 98.26% Paid N/A Included N/A
Aegon Religare iTerm Plan 5-40 years (or upto 80 Years) 100 years 25 lakhs 95.67% Paid N/A Paid Free

**Note: The above plans require mandatory medical proofs.

What is Claim Settlement Ratio?

Claim Settlement Ratio (CSR) is a measurement used to assess the reliability of an insurance company in paying the claims. It is calculated using the simple formula shown below:

CSR = (Total number of claims paid during the time period)/(Total claims received)

For instance, an insurance provider receives 1000 claims in a calendar year, out of which 966 have been settled, 13 claims are pending settlement and 21 claims were rejected. Using the formula stated above the Insurance Company has a CSR of 96.6%.

This Ratio is an important indicator, especially for Life Insurance (Term Insurance) plans. In case of a claim for the death of an individual or even a critical illness, the family shouldn’t be worried about how long and frustrating the process would be. Yes, the premium paid, insurance cover received, are all important indicators to choose a plan, but CSR should not be underestimated or ignored. In an occasion when a claim is to be settled, you may have to suffer if you have chosen an insurance provider that has a CSR of say 60%.

IRDA published its annual report on 9th January 2019. Let us see the IRDA Claim Settlement Ratio 2017-18 i.e. up to 31st March, 2018:

S.No. Life Insurer Claim Settlement Ratio 2017-18 (%)
1 Max life 98.26
2 LIC of India 98.04
3 Tata AIA life 98.00
4 ICICI Prudential Life 97.88
5 HDFC Standard Life 97.80
6 Bharti AXA Life 96.85
7 Exide Life 96.81
8 SBI Life 96.76
9 DHFL Pramerica 96.62
10 Aditya Birla Sunlife 96.38
11 Aegon Religare 95.67
12 Edelweiss Tokyo 95.24
13 Canara HSBC OBC 95.22
14 Reliance Nippon 95.17
15 Aviva Life 94.45
16 Kotak Life 93.72
17 Future Generali 93.11
18 Star Union 92.26
19 Bajaj ALLIANZ 92.04
20 IDBI FEDERAL 91.99
21 Pnb METLIFE 91.12
22 INDIA FIRST 89.83
23 SAHARA LIFE 82.74
24 SHRIRAM LIFE 80.23
  • Green – CSR 96% to 100%

  • Yellow – CSR 90% to 96%

  • Red – Below 90

From the above table, it has been observed that out of 24 different life insurance company 10 companies are in green with CSR of 96% and above, 11 companies are in yellow with settlement ratio in range for 90% to 96%. And 3 companies are in red with a ratio below 90%.

1. LIC e-Term Insurance Plan

LIC e-Term is the most trusted and best online Term Insurance policy that carries good claim settlement ratio and offers the plan at a relatively very low premium cost. It is a non-participating pure life insurance plan that can be bought only through online mode.

If the policyholder dies within the policy tenure, then the Sum Assured is given to the nominee(s) of the insured person. And if the person survives the duration of the plan, then no sum or maturity benefit is provided to the policyholder and his/her family members.

Features and Benefits

  • You can easily buy the policy online sitting at home.

  • It is a pure Term Insurance Plan that provides death benefit only and no maturity benefit.

  • It will provide coverage on all forms of death, including the accidental death.

  • It does not come with any riders.

  • Minimum policy tenure is 10 years and the maximum is 35 years.

  • You will be able to take advantage of the policy for up to 75 years.

  • Minimum Sum Assured is Rs. 50 lakhs (non-smoker).

  • Free look period of 30 days is provided by the company on purchasing the policy if the policyholder is not satisfied by any of the clauses in the policy document.

  • It is cheaper than the offline term plans as there is no involvement of middleman.

  • It is applicable for Non-Resident Indians (NRIs)as well who will be covered under the plan even if they are abroad, but should be present in the country for the medical tests.

  • Premiums paid up to Rs. 1.5 lakhs every year is allowed as a deduction from the taxable income each year under Section 80C of the Income Tax Act, 1961.

  • 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.

Eligibility Criteria

Entry Age

Minimum: 18 years

Maximum: 60 years

Sum Assured

Minimum: For aggregate category Rs. 25 lakhs.

For non-smoker category Rs. 50 lakhs.

No maximum limit on Sum Assured.

Policy Term

Minimum: 10 years

Maximum: 35 years

Premium Payment Frequency Annually
Income Insured should be earning income
Person covered Only the insured’s life is covered

Myths

The purchasers of this plan always have a concern that an online plan has exclusions hidden in the documents. Let us clear this query, the premiums of this plan are less because there is no involvement of a middleman; that’s why the agent’s commission is passed on to the client. The insurer always involves in the proper verification of the customer and he/she could be seen as a low-risk client as they are well-educated to understand the terms and conditions of the policy. Also, they might be already likely to have health insurance for them as well as their families. All these factors reduce the risk and thereby, lower the premium rates.

2. ICICI Prudential iProtect Smart Term Plan

iProtect Smart by ICICI Prudential is an effective Term Insurance policy that provides 360-degree coverage at an affordable premium. It also allows you to file a claim against 34 critical illness diseases. It is also rated as one of the best Term Insurance Plans of 2018-19 just because of its attractive features.

Features and Benefits

  • Offers 4 payout options available comprises of the lump sum, income, and increasing income for your nominee.

  • It also provides terminal illness (including AIDS) advantage i.e. you will get the claim amount in case of diagnosis of any of the 34 critical illnesses. This is one-time benefit only during the policy tenure.

  • It comes out with a wider cover that includes a wide list of critical illnesses.

  • Suicidal cases are also liable to get coverage under this plan.

  • The minimum tenure of the policy is 10 years and the maximum is 35 years.

  • Minimum Sum Assured is 8 lakhs.

  • Life Plus-Along with Life option offers accidental rider benefit.

  • Life & Health Along with Life option offers critical illness rider benefit.

  • Premiums paid and benefits received under the policy are tax-free under Section 80C and Section 10 (10D) of the Income Tax Act, 1961.

Different iProtect Smart Term Plans

Variant name Benefits
Life
  • Death

  • Terminal illness benefit

  • Premium waiver on permanent disability

Life Plus
  • Death

  • Terminal illness benefit

  • Premium waiver on permanent disability

  • Accidental death benefit

Life and Health
  • Death

  • Terminal illness benefit

  • Premium waiver on permanent disability

  • Critical illness benefit

All In One
  • Death

  • Terminal illness benefit

  • Premium waiver on permanent disability

  • Critical illness benefit

  • Accidental death benefit

Protection Benefits

1) Death and Terminal Illness

The life cover amount will be provided only in case of death and terminal illness of the policyholder to the nominee(s). Also, if diagnosed with terminal illness 100% cash payout of the total life cover.

The policy will terminate on payment of either the death benefit or terminal illness.

Terminal illness refers to high-risk death within the next 6 months as diagnosed by medical practitioners.

2) Permanent Disability

If the policyholder is diagnosed with permanent disabilities due to an accident, then he/she will not have to pay the future premiums. The policy will continue normally without any premium payment from the insured person.

This benefit will be activated if the policyholder is unable to perform 3 out of the 6 listed activities permanently and consistently for 6 consecutive months.

3) Accidental Death (Optional)

In case of death due to accident, the nominee(s) will get a lump sum amount called the accident cover.

4) Critical Illness (Optional)

If the policyholder diagnosed with critical illness with any of the 34 listed diseases, he/she will receive a lump sum payout.

3. SBI Life eShield

State Bank of India, the trusted brand in the industry of banking and finance offers SBI Life eShield; one of the purest Term Insurance policies that offer a wide range of benefits at an affordable premium.

Features and Benefits

  • Security – To ensure your family is financially protected.

  • Flexibility – Choose between two benefit structures and two rider options.

  • Simplicity – With an easy online process.

  • Affordability – Through reasonable premiums.

  • Reliability- With Medical Second Opinion.

  • Additional benefits – Inbuilt accelerated terminal illness benefit.

  • If you are a non-smoker then you will be eligible for huge premium discounts.

  • Minimum tenure of the policy is 5 years and a maximum is 30 years.

  • Coverage is up to 75 Years.

  • Tax benefits are applicable under Section 80C and 10 (10D) of the Income Tax Act, 1961.

4. HDFC Click 2 Protect 3D Plus Term Plan

HDFC Click 2 Protect 3D Plus Term Plan is an exclusive Term Insurance policy that covers three uncertainties i.e. death, disability, and disease. It is an effective yet affordable Term Insurance policy.

Features

HDFC Click 2 Protect 3D Plus is currently providing 9 different options of coverage.

  • An exclusive feature of life stage protection that allows you to increase insurance cover on precious occasions such as marriage and childbirth.

  • option to increase coverage on a yearly basis.

  • Accidental death benefit to the rider.

  • Females and non-tobacco users can easily avail attractive discounts on premium

  • The plan is providing complete coverage along with premium waiver benefit in case of critical illness.

  • Minimum Policy tenure is 5 years and the maximum is 40 years.

  • Taking the payout as lump sum + monthly claim settlement.

  • Premiums paid and benefits received under the policy are tax-free under Section 80C and Section 10 (10D) of the Income Tax Act, 1961.

Benefits

I. Death Benefit: In case of death of the insured person while the policy is in force, the nominee will get the following benefits:

  • For single premium policies, 125% of single premium, or Sum Assured, whichever is higher.

  • For policies other than the single premium type, 10 times the annualized premium, or, 105% at all paid premiums till the date of death, or, Sum Assured, whichever is higher.

II. Life Stage Protection: The Life Stage Protection is an optional cover that is available under the life option of the policy and can be taken after payment of an additional premium. This cover makes sure that the person insured is financially protected in every stage of life.

III. Increase Your Sum Assured: One can increase their insurance coverage.

IV. Reduce the Additional Cover at a Later Stage: This term plan offers the ability to reduce the insured person's Additional Insurance Cover after 45 years of age.

V. Maturity Benefit: There will be no amount payable when the person insured survives until the end of the policy term.

VI. Income Tax Benefit: Life Insurance premium paid up to Rs. 1.5 lakhs are allowed as a deduction from the taxable income every financial year under Section 80C. The maturity amount received from this plan is also tax-free under Section 10 (10C).

Various Options on Claiming Death Benefit

I. Life Option

The Death Benefit will be paid in a lump sum amount on death of the insured person.

II. Extra Life Option

The death benefit along with an additional benefit equal to the Sum Assured will be paid if its an accidental death.

The Death Benefit is paid as follows:

  • 10% of the death benefit will be paid as a lump sum amount on death of the insured person

  • The rest 90% of the death benefit will be paid every month over the subsequent 15 years, i.e. 0.5% of the Death benefit paid each month for 15 years duration.

III. Income Plus Option

The death benefit is paid in the following way:

  • 100% of the death benefit is paid as a lump sum amount at the death of the insured person.

  • A monthly income equal to 0.5% of the Sum Assured will be paid for a tenure of 10 years. This monthly income can be level or rising at 10% per annum as per the needs of the policyholder.

5. Max Life Online Term Plan Plus

Max Life Online Term Insurance is the next plan in the bucket of top Term Insurance policies of India. It offers the required basic life cover along with the increased monthly income options for your family in your absence. The company also carries good claim settlement ratios of 98.26%.

Features and Benefits

  • Offers the option of a one-time payout to the beneficiary with increasing monthly income for 10 years.

  • Insured can enhance the cover by choosing optional riders such as accidental death, premium waiver, and critical illness covers on payment of additional premium.

  • Minimum entry age is 18 years whereas maximum entry is upto 60 years.

  • Offers the option to increase the required cover in some precious moments of life like marriage and childbirth.

  • Various options for premium payment i.e. monthly, quarterly, half-yearly, or annually.

  • The minimum tenure under this policy is 10 years, whereas the maximum is 35 years.

  • Unlike others, this term plan will offer the coverage up to 85 years.

  • Non-Resident Indians (NRIs) of selected countries can also take advantage of this policy.

  • For an online plan, the free look period is 30 days.

  • A grace period of 15 days is available for payment of regular monthly premiums whereas it is 30 days for other modes.

  • 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.

Various Options on Claiming Death Benefit

I. Basic Life Cover

A pure term plan pays a fixed amount to the family of the insured. Under this cover, on death during the plan duration, the Sum Assured is paid as the death benefit.

II. Life Cover + Monthly Income

A pure term plan pays a fixed amount to the family of the insured + a fixed sum every month.

Under this cover, 100% of the Sum Assured is paid in a lump sum. Thereafter, 0.4% of the Sum Assured is paid each month for 120 months. Thus, under this cover, the plan pays 148% of the Sum Assured.

III. Life Cover + Increasing Monthly Income

It is a pure term plan which pays a fixed amount to the family of the insured + a fixed sum every month payable tor 10 years that keeps rising by 10% every year to account for the rising living cost.

Under this cover, 100% of the Sum Assured is paid in lump sum. Thereafter, rising monthly income is paid for the next 120 months.

he first monthly installment is 0.4% of the Sum Assured which then rises by 10% (simple rate of interest) every year. Thus, this variant pays a total of 169.6% of the Sum Assured.

Bonus List

Plan Policy Term
ICICI Prudential iProtect Smart 5-40 years
Aviva iLife Plan 10-35 years
Aegion iTerm Plan 5-40 years
TATA AIA Life iRaksha Supreme Online Term Insurance Plan 10-35 years

6. Aegon Religare iTerm Plan

Aegon Religare iTerm Plan is the most affordable yet effective pure Term Insurance Plan provides a lump sum payment and regular income to the family in the event of the death of the policyholder excluding any Maturity Benefit. The company carries a good claim settlement ratio of 95.67% which is attracting many consumers.

Features and Benefits

  • Online term plan that makes the policy purchase very easy and hassle-free.

  • The insured will get the coverage till the age of 80 years.

  • Option to increase your life coverage as per your increasing life stage requirements

  • Inbuilt terminal illness benefit.

  • Offers additional rider benefits such as accidental rider benefit and critical illness benefit as well as disability.

  • The minimum Sum Assured under this plan is 25 lakhs.

  • Minimum entry age to avail the policy is 18 years.

  • It offers the option to choose the payout options as well.

  • Option to increase your life coverage as per your increasing life stage requirements

  • Lower premium rates for females and non-smokers.

  • Free look period is up to 30 days.

  • Premiums paid and benefits received under the policy are tax-free under Section 80C and Section 10 (10D) of the Income Tax Act, 1961.

Why Go for Term Insurance?

With the growing inflation rate, it becomes quite obvious and necessary to secure the future of your loved ones that will protect them from several unwanted incidents. We all know that life is uncertain and not sure when and where we will meet our last phase of life and in such situations, all you may think of is the security of your family security.

If you are the sole earner of the family, then there is the possibility that you must be holding several responsibilities and liabilities as well.

We all know that emotional trauma is something that no one can deal with it happily but the financial assistance during such stages will be a big relief for them.

A Term Insurance Plan will be there for your family in your absence and can easily manage with all your responsibilities whether it is about daily financial expenses, like your child’s education, marriage, old age parents treatment, and several other liabilities.

Sometimes, with so many options it becomes quite difficult to buy the best one according to your needs. We are here to provide ease in choosing the best plan. PolicyX.com is here for several benefits and free quotes that allow you to choose the best and affordable plan.

Advantages of Online Term Insurance Plans

  • Risk coverage, varied plans, inculcates saving the culture, additional income, and tax benefits in certain situations on selected policies.

  • The beneficiary will be liable to receive the death benefits in case of the sudden death of the insured.

  • With an effective Term Insurance Plan, your family can easily avail the required financial assistance in your absence and can continue to live without any burden.

  • In the case of the policyholder’s disability or critical illness, this policy offers several benefits to assist the family financially.

  • Offers lumpsum amount, if you get diagnosed with any critical illness.

  • Additional sum insured in case of the accidental death benefit.

  • Helps through the benefit received in paying off loans/debts that might have been taken during the lifetime of an individual.

Tips to Choose the Best Term Insurance Plan

Choosing the best Term Insurance Plan according to your needs can be a challenging task, but if you know how to crack the best deal then you can do it easily. Several things are associated with Term Insurance Plan. Here are a few points that you keep in mind while opting the best term policy online/offline:

  • Premium: In India, people usually go for a product on the basis of premium i.e. how much they need to pay to avail the benefits. It is advisable not to rely on the premium but also check the benefits and coverage. This is because a plan with a low premium might offer less coverage that would not be beneficial in the future. To choose the best plan you should compare the plans online and check all the details for each and every plan.

  • Claim Settlement Ratio (CSR): Claim Settlement Ratio (CSR) defines the market reputation of the insurance company that plays a vital role in selecting the right insurance policy. One should check the CSR of the company with the lowest premiums and highest benefits for a secure and safe future. It is always advisable to go for a plan offering a higher claim settlement ratio. This information can be easily accessible through the Insurance Regulatory and Development Authority (IRDA) portal.

  • Features: When it comes to buying a Term Insurance policy, you should understand the plan and its features along with the coverage and exclusions in advance before making a decision. Many companies offering additional features and benefits are important for a fruitful plan. During the process, it is necessary to read the policy’s documents carefully before making payments.

  • Additional Benefits: Free medical check-ups.
    Free health consultation.
    Consultation with nutritionists.
    Attractive offers on healthcare services.

Attractive offers on healthcare services.

FAQs

1. Are riders available with every Term Insurance Plan?

No, it is not necessary that you will get riders along with every Term Insurance Plan. It can vary according to the insurer and plans as well. A few of them might offer the same separately and a few may take care of the riders in the plan itself.

2. Can I take more than 1 Term Insurance Plans?

Yes, you are liable to purchase more than 1 Term Insurance policy.

3. What I have to do to get a cover of Rs. 10 crores?

In the case where you want to opt for a high Sum Assured, you have to talk to the insurance company and ask them about it. They carry a different process and first will rectify your details before proceeding further.

4. Can I take a Term Insurance Plan if I am an NRI?

Yes, if you are an NRI, then also you can easily invest in a Term Insurance Plan. You can also get an exclusive plan for yourself.

5. How do I cancel my insurance policy?

You can cancel the policy by informing the insurance company within 15 days of the policy being issued.

6. What are the documents required for buying Term Insurance Plans?

The following documents are required to buy Term Insurance:

  • Proof of age

  • Proof of residence

  • Photo identity proof

  • Salary proof

  • Photographs

7. Can someone avail loan on Term Insurance Plans?

No, policyholders are not eligible for loans as the policy doesn’t come with maturity benefits, nor does it attain surrender value.

8. Does Term Insurance have a free-look period?

Yes, Term Insurance Plan also carries a free-look period of 15 days from the day you receive the policy document. If you cancel the policy in between this period then your amount will be refunded after specific deductions.

9. Do I have to pay penalties if my payment is late, but within the grace period?

The policies related to late payment fee may differ from insurer to insurer, but if you make the payment within the grace period then no interest is charged on the payment.

Last Updated on : 24th, June, 2019.