Term Insurance Plans
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Term Insurance - What is it?

Term insurance is a type of life insurance policy, which offers financial coverage to your family/nominee in case of your death. It makes sure that your family is well-taken care of after your demise. With the help of riders (add-ons), you can cover disease and disability under term insurance as well. It's one of the best ways to protect the financial future of your family in a cheap manner.

Why Is It Important To Invest In Term Insurance?

With the frequency of accidents and diseases increasing per day, your plan of living a long life may seem far fetched. That means, if you die, your family should have a financial backup to take care of their needs. That's why investment experts in the industry suggest investing in a term insurance plan and that too at a young age. Term insurance will help your family to live a stable life even after your demise. It will provide much needed financial support to meet their daily expenses and fulfil their long-term goals as well.

Let's understand the importance of Term Insurance through this example:

Varun and Manik are very close family friends. Varun somehow decided to invest in Term Insurance and even suggested Manik do the same. Manik didn't like the idea and rejected it.

Life Insurance Required

After 3 years, they were traveling to Jaipur by road and met with an accident. Both of them died on the spot. Though both the families were in grief, Varun's family was a bit relieved as they had the financial support of the term insurance. Manik's family were on their own and had to figure out a way to meet their expenses.

Motive of this example- though human life is priceless and the grief of losing someone close can't be described in words, having a financial backup (term insurance) can at least offer support to meet all financial expenses.

Best Term Insurance Plans In India

Sr. No.Company NameTerm Insurance PlansEntry Age (years)Minimum Sum Assured (Rs.)Claim Settlement Ratio 2019-20*
1.ICICI PrudentialICICI Prudential iProtect Smart Lump sum Term Plan18-65Subject to minimum premium97.8%
2.Max LifeMax Life Smart Term Plan18-6010/25 lakhs99.22%
3.HDFC LifeHDFC Click 2 Protect 3D Plus Term Plan18,25-6510,00099.07%
4.LICLIC Tech Term18-6550 LakhsNA

Table Data updated on 27-11-2020

*We have also prepared a list of the top 6 term insurance plans in India 2020.

Table Data updated on 27-11-2020

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What Are The Types Of Term Insurance Plans?

Level Term Plan

It is the simplest plan of the lot. Under this, there is no change in the sum assured and the nominee will reap the benefits once the insured is dead. This type of plan is offered by many insurance companies and is available all over India.

TROP (Term Return of Premium)

The best part of the TROP plan is that it assures maturity benefits. This policy turns out to be beneficial if the insured survives the term of the policy.

Increasing Term Insurance Plan

Under this, the sum assured will increase annually by a certain percentage pre-specified by the insurer. This plan is launched keeping in mind the growing rate of inflation.

Decreasing Term Insurance Plan

It is a renewable term insurance plan. Under this, the sum assured is decreased every year by a pre-specified percentage. This plan is usually issued by banks to recover the loan and clear all the debts.

Convertible Term Insurance Plan

This type of plan can be converted into another type of life insurance plan (from standard to endowment or whole life), providing dual benefits.

What Riders Are Available Under Term Insurance?

Insurance companies allow you to avail add-ons (riders) with your term insurance policy on paying an extra premium. A brief explanation of such riders is given below-

Critical illness Rider

Critical illness riders cover many illnesses that are deadly in nature. You can buy this rider if you are prone to any such illness. Before taking the rider, you can always check the additional cost and decide accordingly.

Benefits of Critical Illness Rider:

  • Covers more than 100 deadly diseases.
  • Entire hospitalization expenses are covered with the help of lump-sum payment.

Accidental Death Rider

If this rider is taken, then accidental death is covered. The insurance company will offer the sum assured along with the rider benefit to the nominee of the policyholder.

Benefits of Accidental Death Rider:

  • Provides added financial protection.
  • Some insurance policies provide this as an inbuilt feature.

Cashless Treatment Rider

With this rider, you will get complete cashless treatment at the time of any illness/surgery.

Benefits of Cashless Treatment Rider:

  • Access to the chain of cashless hospitals.
  • Great benefits with not much investment.

Premium Waiver Rider

As per this rider, all the future premiums are waived off if the policyholder is disabled, critically ill, or dead.

Benefits of Premium Waiver Rider:

  • No financial burden to pay the premium.
  • No effect on the sum assured.

What Are The Key Features & Benefits Of Term Insurance?

Lifetime Cover

Generally, term insurance plans offer coverage until 65 years. However, there are a few life insurance companies, which provide coverage for 100 years as well. So, if you buy a term plan at an early age, you and your family can enjoy its benefits for a long time.

Tax saving

Yes, this is an additional benefit of investing in a term insurance plan. On buying a Term Insurance policy, you will be liable to get tax benefits under the Income Tax Act, 1961.

Maximum Gain with Small Investment

Term Insurance plans are available at a very nominal cost. It may be as low as some hundreds or thousands per month. As compared to that, the sum assured can be in lakhs and crores (depending on the customization of policy options).

Free Lookup Period

At times, you may not be sure about the policy. It happens when you buy term insurance in a hurry. To resolve this issue, IRDAI has introduced a concept named 'Free-look Period', where all the insurance companies offer 15 days to change your decision. If you are unhappy with the policy, you can return the original policy documents (in that duration) to cancel the policy.

Ease of Payments

When it comes to payment, you can always choose the premium payment mode according to your convenience. You can pay monthly, quarterly, half-yearly, or annually. Many people prefer to pay the premium monthly, as it comes at a very nominal price. Payments can be easily made online. You can do it either through debit/credit card, NEFT, net banking, IMPS, or wallet banking.

Buying Flexibility

There are two channels from where you can buy Term Insurance plans- offline and online. You can physically visit the branch office of your selected provider to purchase the policy or you can approach the most convenient online channel- PolicyX.com.

At PolicyX.com, we provide a customized portfolio as per your needs and requirements. We have a dedicated team to assist you with all your queries. From documentation to any other further assistance, they are always on their toes to serve you in the best possible way.

Term Insurance: Payout Options

The term insurance offers 4 types of payout options to choose from. They are as follows:

  • Lump-sum payment
  • Monthly Income
  • Lump-sum + Monthly Income
  • Increasing Monthly Income

Lump-sum payment

Under this option, the claimant's family will receive the lump sum amount.

Monthly Income

With this option, the beneficiary will receive the total sum assured in monthly instalments.

Lump-sum + Monthly Income

With this option, the beneficiary will receive 50%-70% of the assured amount (in a lump-sum) just after the death of the insured, and the rest of the amount is paid through monthly instalments.

Increasing Monthly Income

Under this option, the beneficiary will get the total sum assured in increasing monthly instalments. The instalments increase @10-20% to help the dependents fight inflation.

Why Should You Buy Term Insurance Online?

Buying term insurance online saves a lot of time and energy for the customer. Other key advantages are listed below-

  • Fast Delivery: As soon as you enter the required details and make the payment, you will get the policy document in your inbox.
  • Online Availability: Yes, you don't have to beg your insurance provider and wait for days to get your hands on the duplicate copy of your policy documents. Thanks to digitalization, you can access your details and documents with a click of a button. For example, if you have bought a term plan from PolicyX.com, you can check your details by logging into your account.
  • Automated Results: You don't have to browse the internet like a crazy person to get the details of the policy. From comparing several insurance providers to premium calculation, everything is done on a single web page.
  • Less Premium: Since there are no middlemen involved in the entire process, the cost of online term plans is less. Many other overhead costs such as the cost of office, commission to the middlemen and distribution channels, etc. are saved as well.
  • Reminders: Not everyone is blessed with a good memory. That's why we prefer to have a 'reminder system' onboard. If you are a customer of PolicyX.com, you will get regular reminders to renew your term insurance policy to avoid lapsation.

Term Life Insurance Plans By The Government Of India

The Central Government of India offers certain term insurance schemes, through which policyholders can safeguard their dependents financially. Let's have a look at them.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

The Pradhan Mantri Jeevan Jyoti Bima Yojana is a life insurance policy that can be renewed on an annual basis by policyholders.

Key Features:

  • This policy offers a life cover of Rs. 2 lakhs.
  • The premium charged for this plan is Rs. 330 per annum.
  • Individuals between 18 years and 50 years can purchase this policy.
  • Tax benefits can be availed as per the prevailing tax laws.

Aam Aadmi Bima Yojana

The Aam Aadmi Bima Yojana was formed as a merger of two social security schemes, namely the Aam Aadmi Bima Yojana and the Janashree Bima Yojana, which previously existed.

Key Features:

  • To subscribe to this scheme, members need to be between 18 years and 59 years.
  • The initial premium that will be charged for this scheme is Rs. 200, out of which 50% of the premium amount will be subsidized from the Social Security Fund.
  • This scheme also provides accidental death/disability benefits and a scholarship benefit.

Which Factors Affect The Term Insurance Premium?

Below is the list of a few factors that have a direct impact on the term insurance premium. Let's check them out.

Age: The basic idea of term insurance is to offer financial coverage to the claimant in return for a premium amount, which is directly linked with the age of the policyholder. That means, the older you opt for a term plan, the higher premium you have to pay. Let's understand this statement with the help of an example.

Mayank (30 years old) is planning to buy a term insurance plan with the coverage of Rs.1 crore (till 65 years of age).

AgeMaturity AgePolicy TermAnnual Premium (Rs.)*
30 years65 years35 years9,363
35 years70 years35 years13,139
40 years75 years35 years19,056

*This premium is provided by ICICI Prudential.

As per the above table, it is safe to say that Mayank should consider buying a term plan at 30 years of age as he would have to shell out less premium. If he buys term insurance at the age of 35/40 years, he will have to pay an extra premium.

  • Health History: If the policyholder has a family history of critical illness, then the insurance company will charge a higher premium amount.
  • Profession: Your work profile is also one of the significant factors that determine your premium amount. For example, if a policyholder is employed in a high-risk work profile (mining), there is a greater risk of injuries/illnesses. So, the insurance company will charge a high premium in return for the policy.
  • Lifestyle: The way you live your life affects the term insurance premium. For example, if you are a regular smoker/drinker, you have to pay a higher premium.

How Can You Buy Term Insurance From PolicyX.com?

PolicyX.com has designed a simple process to buy term insurance online. Here are the steps-

  • Scroll-up to the top-right corner of this page and find 'Compare Term Insurance Plans Online'.
  • Enter the required details and click on 'Continue'.
  • Submit your income, city name, and click on the tab 'Proceed'.
  • Various plans offered by different insurance providers will pop on your screen.
  • Select a suitable plan and click on the 'Buy' tab.
  • Make the payment and you will receive the soft copy of your policy on your registered email id.

What All Documents Are Required To Buy A Term Insurance Plan?

  1. Last 3 months salary slips or income tax returns for the last 3 years.
  2. Form 16 (in case of salaried professionals) and Form 16 A (for self-employed or freelancers).
  3. One passport size photo.
  4. Identity proof such as Aadhar card, Pan card, Driving license, etc.
  5. Others requested by the company.

How Much Term Insurance Cover Is Sufficient For You?

After you decide to purchase term insurance, the next question that comes in your mind is- how much coverage is sufficient for you? If we listen to the industry experts, a term cover must be 15-20 times of your annual income. For example, if your annual income is Rs.5 lakhs, your choice of minimum cover should be Rs.75 lakhs-1 crore.

How To Get A Successful Claim In Term Insurance?

Term Insurance Claim

In case of the demise of the policyholder, the nominee should inform the insurance company and share the required documents with them. Documents will vary in different scenarios and are bifurcated below for your reference.

Case 1: Natural Death

  • Policy document in original.
  • Claim form issued by the insurance company.
  • Application from the claimant.
  • Any other documents required by the insurance company.

Case 2: Accidental Death

  • Post Morterm report of the accident.
  • FIR report of the police.
  • Policy document in original.
  • Claim form issued by the insurance company.
  • Statement of attending doctor or certificate of medical attendance.
  • Any other documents required by the insurance company.

Case 3: Death Due to Sickness

  • Original discharge summary from the hospital.
  • Supporting medical reports.
  • Policy document in original.
  • Claim form issued by the insurance company.
  • Application from the claimant.
  • Any other documents required by the insurance company.

Case 4: If Nominee Also Dies Along with Insured

In such cases, the legal heir of the claimant becomes the beneficiary. The legal heir can get the benefits only after attaining the age of 18. But his/her guardian must immediately inform the insurance company. The age criteria may depend completely on the provisions of the insurance companies or IRDA.

Case 5: If the Nominee Dies Before the Policyholder

When a nominee dies before the policyholder, it's the responsibility of the policyholder to nominate other beneficiaries. This can be done either online or by informing the customer care.

Note: Once the insurance provider accepts the claim, it will release the pay-out. If the claim is rejected, the reasons for the same will be communicated to the claimant.

Are Deaths Due To Coronavirus Covered By Term Insurance Plans?

While a few life insurance policies have exclusions for a specific cause of death, coronavirus is covered in all the existing/new life insurance policies. However, it is advisable to pay attention to the guidelines of life insurance and add-on plans, whose benefit is paid if the claim is approved by the insurance company.

Can You Purchase Term Insurance Right Now?

For all the new applications of term insurance during COVID times, insurance companies calculate the premium of the policy based on medical history and the health of the customers. Hence, the pandemic may have an impact on the term insurance premium and the acceptance of the policy as well.

It is important to keep in mind that if the buyer's application is in process and (s)he gets diagnosed with COVID, then the company might reject or hold the policy. The buyer should make sure that (s)he is sharing all the information with the insurer whether it is related to COVID or not. This will prove to be useful at the time of filing a claim.

How To File A Coronavirus Term Insurance Claim?

  • Inform the respective insurance provider about the death at the earliest.
  • You must collect the claim form from the official website of the company or the nearest branch.
  • Collect all the documents from the hospital (if the death has occurred in the hospital). Don't forget to collect the death certificate from the municipal corporation office,
  • Submit the claim form, death certificate, hospital, and KYC documents of the insured and the nominee.
  • Submit the bank details.
  • Once the nominee fulfils all the requirements, the company will analyze the documents and process the same further.
  • If it gets approved, the amount will be transferred to the registered bank account. In case of rejection, the company will inform the same through a message, call, or letter.

Note: The claim process varies from insurer to insurer. You must check with your provider about the same, as many companies have started claim services over WhatsApp as well.

Documents Required To File A Claim Based On The Cause Of Death Due To Coronavirus

  • Statement from the doctor.
  • Medical records including test reports, discharge papers, admission notes, etc.
  • Bank account details.
  • Original death certificate.
  • Claim form and ID proof.
  • Policy document in original.
  • Others requested by the company.

What Is Not Covered In Term Insurance?

Just like every other thing in the market, term insurance comes with a (*) sign- exclusions. Let's view it.

Death due to the following reasons are not covered-

  • Consumption of drugs/liquor.
  • Pre-existing diseases.
  • Complication due to pregnancy/childbirth.
  • Act of criminal nature.
  • Suicide (within 1 year of issuance of the policy).
  • War or involved in a hazardous activity.

Term Insurance FAQ's

1. What is the minimum age and income to buy term insurance?

To invest in a term insurance plan, the minimum age should be 18 years and the minimum income should be 2 Lakhs.

2. What is the difference between term insurance and life insurance?

Life insurance includes maturity benefits, whereas term insurance offers no such benefits.

3. How much tax will I save by buying term insurance?

Under Section 80C of the Income Tax Act, 1961, you can avail deductions up to Rs. 1.5 lakhs.

4. I occasionally smoke with my friends. Do I need to disclose this information while buying term insurance?

If you have smoked in the past 12 months, you have to disclose it to your insurance provider. If you don't disclose it right away and reveal it later, you may be charged with a high premium or your provider may cancel your policy (denying any benefits).

5. I have diabetes. Can I get myself insured under term insurance?

If your diabetes is in control (with regular treatment and a healthy lifestyle), you will be eligible to buy term insurance. However, if you have additional risks like hypertension, heart illness etc, your application can be rejected.

6. Whom shall I contact if my claim is rejected?

Even after submitting all the documents and adhering to the policy document, if the claim is rejected, you need to get in touch with the Ombudsman. (S)he will tell you the reason(s) for rejection.

7. Can I add a rider to my existing term insurance plan?

Yes, you can easily purchase rider(s) from your insurance providers at nominal costs.

8. Are your agents qualified enough to handle my queries?

Yes, PolicyX.com is IRDA certified (WBA 17/14) and our agents go through the best training at hand to serve you better. To know more, please speak to our customer care team on 1800-4200-269.

9. Will my premium amount change during the policy tenure?

No, it will remain the same.

10. I'm unable to find my policy document. How can I get its duplicate copy?

You have to submit an application along with indemnity bonds and fees to get a duplicate copy of your policy.

11. Can an NRI buy term insurance?

Yes, insurance companies offer term insurance plans, which are specially designed to fulfil the needs of NRIs.

12. If I die due to a natural calamity/disaster, will my family/nominee receive the sum assured?

No. Deaths under 'Act Of God' are not covered by term insurance policies.

13. If I die outside the Indian territory, will it be taken into consideration?

Yes. Once the policy is in effect, your death (irrespective of the place) will be taken into consideration.

14. Can I switch my term policy from one provider to another?

No, that's not possible.

15. Can I cancel my term insurance policy?

Yes, you will be given 15 days (generally called a free-look period) to cancel your policy without penalties.

Naval Goel

Reviewed By: Naval Goel

Naval Goel is the CEO & founder of PolicyX.com. Naval has an expertise in the insurance sector and has professional experience of more than a decade in the Industry and has worked in companies like AIG, New York doing valuation of insurance subsidiaries. He is also an Associate Member of the Indian Institute of Insurance, Pune. He has been authorized by IRDAI to act as a Principal Officer of PolicyX.com Insurance Web Aggregator.

Find Out What PolicyX Customers Says

November 2, 2020

Ajit Shetti

Best service by policy .Medical arrangement also best.supporting by all calls r best.Very nice experience Thank u Policy X

September 15, 2020


The executive were very helping and polite. All my doubts were cleared quickly and the process was also fast.

July 16, 2020

Sneha Roongta

I was very pleased with how quickly and easily Policyx Team was able to assist me in finding the best quote for my Term Plan. Neeraj - in CRT Team was very helpful and given complete track record of my policy status till the issuance. Thanks Neeraj

February 1, 2018


Policyx is good site, they helped me in claim setllement also for the life insurance policy I brought from them

January 31, 2018

Situ Tiberwal

I have HDFC Click 2 protect plan which covers uncertainities like- Death, Disease and Disability. It's a good comprehensive plan and fits your budget

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Page Last updated on 27-11-2020