Written By: Sahil Singh Kathait

Sahil Singh Kathait

Health & Term Insurance

A boy-in-squares bagging escapades of switching streets in groove & sensing musical airy-notes from 6 1". Under wayed nyctophile sketching the walls of life from the panorama of anime.

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Reviewed By: Bijendra Singh

Bijendra Singh

Term Insurance

Bijendra Singh with his 9 years of experience in the term insurance sector, has been instrumental in designing customer-centric sales programs. His passion towards innovation strives to achieve organizational objectives while driving sustainable growth in the competitive insurance landscape.

Updated on Feb 11, 2026 47 min read

How Do You Choose the Best Term Insurance Plan?

Having a term insurance plan is an effective way to safeguard the family when you’re not around. Still, most of the population in India remains uninsured. It’s because people have a misconception that term insurance is a pointless expense, and some of them struggle with how to choose the best term plan.

Nowadays, there are so many insurers offering different types of plans in the market that picking the one that is best for you can be challenging. We’re here to make the process of finding the best term insurance plan easy for everyone.

How to Choose the Right Term Insurance Plan in India

Before buying a term insurance plan, it is essential to compare many insurers offering different types of plans to get yourself the best deals. Additionally, you must take into consideration some factors while choosing the best term insurance plan for yourself. Here, we’ve listed a few factors that may help you find the right term insurance plan effortlessly.

Check How Much Coverage is Needed

Before starting the process of finding a term insurance plan, make sure you have decided how much life cover you need. Take into account your family’s future needs and goals that you’ve decided for your family to follow in your absence.

However, there are also four methods to calculate adequate term insurance coverage—Human Life Value, Income Replacement, Expenses Replacement Method, and Underwriter’s Thumb Rule.

Some of these methods include your liabilities, annual income, the number of dependents, future needs, Etc.

Check the Claim Settlement Ratio of Insurers

Take into consideration the claim settlement ratio of insurers. It shows the total number of claims received and the total number of claims settled in a year by the insurance provider.

For instance, an X insurance provider has a 97% claim settlement ratio. It shows that 97 claims will be settled out of 100 claims received in a financial year.

Do Not Mix Insurance with Investments

Term insurance is a pure protection plan, and endowment or ULIP is an investment + saving plan. Under investment plans, it provides dual benefits of investments and life cover. While term plans offer high life cover, you’ll not get any market return from these plans.

It makes buyers think investment plans are better than term insurance plans, but it’s not. Because investment plans sometimes fail to deliver both. The cover is not adequate, and the investment returns are disappointing.

Hence, it’s not a good idea to mix term insurance and investment. However, you can opt for a ULIP plan that provides guaranteed returns.

Analyze Your Income

Take into consideration and analyze your income to ensure how much premiums you can pay without burdening yourself. Because everyone has to serve a set of responsibilities in different phases of life that require some portion of income. Once you calculate the income limitations, you can get better chances to avail yourself of the best deal.

Save On Your Tax Outgo

With a term insurance plan, you can avail yourself of 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 tax exemption of Rs 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 Rs. 75,000 on the premiums paid towards the optional riders included in your term insurance plan. It also provides an additional tax education of Rs. Rs 25,000 (Rs 50,000 for senior citizens).
• Section 10(10D) of the Income Tax Act 1961 provides an income-tax exemption of up to Rs. 2.5 lakhs on the death benefit and maturity benefit received under your term insurance plan.

Select the Right Sum-Assured Option

While finding the best term insurance plan, do not overestimate the life cover. The right life cover will ensure that your family will be taken care of financially 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

We have provided a list of the best term insurance plans that you can choose in 2025 based on the claim settlement ratio, solvency ratio, customer testimonials, and much more.

Company Name	Plan Name	What makes it best?	CSR	Affordability
Axis 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%	Rs. 989/- per month
HDFC Life Insurance	Click 2 Protect Super	Return of Premium Option  Waiver of Premium  Joint Life Option	99.5%	Rs. 1181/- per month
Bajaj Allianz Life Insurance	E-Touch Online Term	Discount on High Sum Assured  Flexible Payout  Covers Terminal Illness and Disability	99.23%	Rs. 873/- per month
TATA AIA Life Insurance	Sampoorna Raksha Promise	100% Return of Premiums  Affordable Premiums  Surrender Benefit	99.13%	Rs. 483/- per month
ICICI Prudential Life Insurance	ICICI Pru iProtect Smart Plus	Life Stage Protection  Smart Exit Benefit  Whole Life Option	99.17%	Rs. 1083/- per month

*The sample premium is calculated for a 30-year-old male earning 10 - 15 lakhs annually looking for insurance coverage of 1 crore till 6

Why Opt for a Longer Term

To get yourself the best term insurance plan, you have to understand how long your liabilities will last and your family’s financial needs. It includes when your kids will be independent, how long you will work, your aging parent’s needs, Etc.

Conclusion

Are you still wondering how to choose the best term insurance plan for yourself? In that case, we’ve mentioned above the top 5 factors that may help you find the best term insurance plan in no time. For further help, you can directly reach out to your insurance experts to select the right term plan.

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