How do I choose a good term plan?

To choose a good term plan, you must compare many insurers offering different types of plans and the limitations of your income to get yourself the best deals.

How many years do we need to pay premiums?

The term insurance period depends on how long you want protection. Generally, the term plan matures at the age of 65, but you can choose your policy tenure up to 99 years.

Is it worth it to take term insurance?

Nowadays, it has become a basic necessity to buy a term insurance plan to safeguard the dependents when something happens to policyholders.

At what age term insurance is best?

Being in your 20s is a good time to get yourself a term plan, and even your premiums will be cheaper.

Which insurance provider in India has the best term plan?

List of the top 5 term insurance plans based on Claim Settlement Ratio (CSR) 2021-22. Max Life Smart Secure Plus Plan Aegon Life iTerm Prime Bajaj Allianz Life eTouch Plan Kotak e-Term Plan HDFC Life Click 2 Protect Super

Is it better to get 20 or 30 year term life insurance?

20-year term policies cost less than 30-year term policies with the same coverage amounts. However, if you’re pretty sure you need coverage for 30 years, go with a 30-year term.

At what age should you buy term life insurance?

While you can buy term insurance anywhere between 18 and 65, the ideal age for buying term insurance is when you are younger, ideally from 18 to your 30s. This ensures lower premiums and greater financial security.

What is the best age to get long term insurance?

the best age to apply is in your mid-50s. . You can lock in your good health and today there are policies that allow you to buy some coverage now and add to it in future years.

Written by Sahil Singh Kathait

Published: 16 Aug 2024

Updated: 17 Jun 2026

47 min read

Expert Verified

IRDAI Licensed

How to Choose the Best Term Insurance Plan?

A term insurance plan is an effective way to safeguard your family financially in your absence. However, a significant portion of the Indian population remains uninsured, often due to the misconception that term insurance is a pointless expense or a struggle to choose the best plan.

With numerous insurers offering various plans, selecting the best term insurance can be challenging. This guide aims to simplify the process for you.

How to Choose the Right Term Insurance Plan in India

Before purchasing, compare plans from various insurers to find the best deals. Consider these key factors to help you choose the right term insurance plan effortlessly:

Check How Much Coverage is Needed

Before searching for a term insurance plan, determine the adequate life cover needed. Consider your family's future needs and financial goals in your absence.

You can calculate adequate term insurance coverage using methods like Human Life Value, Income Replacement, Expenses Replacement, and the Underwriter’s Thumb Rule.

These methods consider factors such as your liabilities, annual income, number of dependents, and future financial needs.

Check the Claim Settlement Ratio of Insurers

Always check the Claim Settlement Ratio (CSR) of insurers. This ratio indicates the total number of claims received versus the total number of claims settled by an insurance provider in a financial year.

For instance, a 97% claim settlement ratio means 97 out of every 100 claims received were settled.

Do Not Mix Insurance with Investments

Term insurance is a pure protection plan, whereas endowment or ULIP plans combine investment and savings with life cover. While term plans offer high life cover, they do not provide market returns.

Buyers often mistakenly believe investment plans are superior to term insurance. However, investment plans sometimes fall short on both fronts, offering inadequate cover and disappointing returns.

Therefore, it's generally not advisable to mix term insurance with investments. While ULIPs can offer market-linked returns, a pure term plan focuses solely on protection.

Analyze Your Income

Analyze your income to determine an affordable premium amount without financial strain. Life's various phases bring responsibilities that require a portion of your income. Understanding your income limitations helps you find the best deal.

Save On Your Tax Outgo

Term insurance plans offer various tax benefits under Sections 80C, 80D, and 10(10D) of the Income Tax Act, 1961.

Under Section 80C of the Income Tax Act, 1961, you can claim a tax exemption of up to ₹1.5 lakhs on premiums paid towards your term insurance plan.
Under Section 80D of the Income Tax Act, 1961, you can avail of a tax exemption of up to ₹25,000 on premiums paid towards optional riders (₹50,000 for senior citizens).
Section 10(10D) of the Income Tax Act, 1961, provides an income-tax exemption on the death benefit and maturity benefit received under your term insurance plan.

Select the Right Sum-Assured Option

When choosing a term insurance plan, avoid overestimating the life cover. The appropriate sum assured ensures your family's financial security in your absence.

Choose a sum assured based on:

Your annual income. Aim for 10 to 15 times your yearly earnings.
Existing liabilities include home loans, personal loans, and credit cards.
Future goals such as children’s education and marriage.
Regular household expenses adjusted for inflation.

Best Term Insurance Plans in India in 2025

Here is a list of top term insurance plans in India for 2025, selected based on factors like claim settlement ratio, solvency ratio, and customer feedback.

Company Name	Plan Name	What makes it best?	CSR	Affordability
Max Life Insurance	Axis Max Life Smart Term Plan Plus	7 Plan Options to Choose From Cover Continuance Benefit Inbuilt Terminal Illness Cover Insta Payment on Claim Intimation	99.65%	₹989/month
HDFC Life Insurance	Click 2 Protect Super	Return of Premium Option Waiver of Premium Joint Life Option	99.5%	₹1181/month
Bajaj Allianz Life Insurance	E-Touch Online Term	Discount on High Sum Assured Flexible Payout Covers Terminal Illness and Disability	99.23%	₹873/month
Tata AIA Life Insurance	Sampoorna Raksha Promise	100% Return of Premiums Affordable Premiums Surrender Benefit	99.13%	₹483/month
ICICI Prudential Life Insurance	ICICI Pru iProtect Smart Plus	Life Stage Protection Smart Exit Benefit Whole Life Option	99.17%	₹1083/month

*The sample premium is calculated for a 30-year-old male earning ₹10-15 lakhs annually, seeking insurance coverage of ₹1 crore until age 60.

Why Opt for a Longer Term

To choose the best term insurance plan, assess the duration of your liabilities and your family's financial needs. This includes considering when your children will be independent, your working years, and the needs of aging parents.

In general, term plans often mature around age 65, but some insurers offer flexibility in choosing your policy tenure.
Term insurance premiums remain constant throughout the policy tenure once purchased.
Buying a long-term plan early in life offers cheaper premiums, maximizing future security and significantly reducing risks.

Conclusion

Still wondering how to choose the best term insurance plan? The top factors mentioned above can guide you. For further assistance, you can reach out to our insurance experts to select the right term plan.