Which are Best Term Insurance Plans in India? How to select the best term insurance plans in India? Let’s select the best life insurance investment plans in India by doing a comparison of features and claim settlement ratio.
Let me start this post with the famous saying of Michael J Fox – “Family is not an important thing, it’s everything”. So, if you care for your family, you should buy an insurance policy (term plan). Term plan provides financial assistance in case of an unfrozen event.
Buying the term insurance plan is an essential requirement for every human being. Term Insurance plan provides higher risk coverage at a lower cost. If you are not insured or planning to buy insurance, you should go for a good term plan. However, it is a difficult task to identify the best term plan. There are 24 life insurance companies in India and all of them offers similar types of term insurance policies. The chances are very high that you will get confused while selecting a term plan. In order to help you, I am herewith 7 Best Term Insurance Plans in India 2022-2023.
What is Term Insurance Plan?
Term Insurance Plan is a pure life insurance policy. Term Insurance means an agreement between insurer and policyholder. In this policy, the insurer will pay the fixed sum assured to the nominee on the death of policyholder. If policyholder survives policy term insurer will not pay anything.
In certain term plan, policyholder can select how death benefit will be paid to the nominee. The payment could be either lump sum or monthly.
What are benefits of Term Insurance Plan?
There are multiple benefits of Term Insurance Policies. Details are given below.
- A term insurance policy provides higher risk coverage at a lower premium.
- Your nominee will get lump sum amount in the event of sudden death.
- You can opt for an additional sum assured benefit in case of accidental death.
- Term insurance plan takes care of the family in case of disability or critical illness.
- One can get a lump sum amount if diagnosed with a critical illness.
- You can avail tax benefit for the paid premium amount.
- If opted, one can get supplementary income in case of loss of income due to accidental disability or illness.
- An online option is available. It can be purchased easily without the help of an agent.
Types of Term Insurance Plans in India
Standard Term Plan – Under standard term plan the person get life coverage against payment of the premium amount. It is a pure term plan where the premium is paid annually.
Increasing Term Insurance Plan – Increasing Term Insurance Plan similar to standard term plan with regard to premium payment and policy term. Only change is sum assured (insurance coverage) increases with age of policy holder.
Life Stage Term Plan – Life stage or Event Term Plan allows policy holder to increase the coverage on your significant life stages.
Group Term Insurance Plan – Group Term Insurance Plan is offered to a group of people. The group term plan provides the same coverage to an individual covered under this plan.
Convertible Plan – The convertible plan is saving cum insurance plan. This plan allows insured to convert this plan in endowment policy at a later stage.
Single and Joint Life Term Insurance Plan – Joint Life term insurance plan is offered to two individuals usually married couple. Joint Life Term Insurance Plan workout to be cheaper compared to an individual policy.
Offline and Online Term Plan – The plans which are sold online are known as online term plan and plan that is available offline is known as offline term plan.
How to select Best Term Insurance Plans in India?
In order to shortlist the best term insurance plans, I have checked the following parameters.
Reputation of Company
First I have tried to shortlist insurance company based on the reputation. In order to do that I have taken help of Last year IRDA Annual report. I have shortlisted company based on market share and the age of insurance company.
If we take a look at market share of Life Insurance Company 2017-18, LIC is on the first number with the market share of 69.36%. HDFC Life is at second number with 5.85% market share. Apart from LIC and HDFC other private player in the list are SBI Life, ICICI Pru, Max Life and other companies.
Next is age of the company. I have selected top 10 Companies out of 24 companies. These companies are older than 15 years of age. LIC is oldest insurance company with 63 years of age. Apart from LIC other companies in the list are ICICI, HDFC, SBI, Max Life etc.
Claim Settlement Ratio
The next important thing to consider claim settlement ratio. The insurance company should be settling claims. From following table one can say that out of 24 companies 10 companies are shown with green colour with claim settlement ratio above 96%.
Premium amount is next factor for the comparison. The shortlisted plan for the comparison of premium amount are given below.
- LIC e-Term Insurance Plan
- ICICI Prudential iProtect Smart Term Plan
- HDFC Click 2 Protect 3D Plus Term Plan
- LIC Jeevan Amar Term Plan
- Max Life Online Term Plan Plus
- SBI Life eShield
- LIC Tech Term Plan
Suppose 30 years old healthy nonsmoker person opt for term plan of 1 Cr for the term of 30 years without any riders. The premium amount comparison for above case is given below.
|LIC Tech Term Policy||11007|
|LIC e-Term Insurance Plan||14600|
|ICICI Prudential iProtect Smart Term Plan||8279|
|HDFC Click 2 Protect 3D Plus Term Plan||11000|
|Max Life Online Term Plan Plus||8378|
|SBI Life eShield||9400|
Additional Features comparison
The features comparison detail of above plans are given below.
7 Best Term Insurance Plans in India 2022-2023
#1 LIC Tech Term Plan
LIC Tech Term Plan is first in the list of best term insurance plans in India. LIC Tech Term is non-linked, non-participating pure online term plan. It is pure term plan. It means in case of unfortunate death of policy holder during policy term nominee will get sum assured. If policy holder survives policy term nothing is payable. You have option to go for level sum assured and increasing sum assured option under this plan.
- LIC Tech Term is pure term plan that can be purchased online only.
- Premium of this policy is comparable with other term plans available in the market.
- Minimum sum assured is 50 Lakh and maximum coverage age is up to 80 years.
- Optional Accidental rider available.
- Diffrent premium rates for women and non-smoker.
- Level sum assured and increasing sum assured option available.
LIC Tech Term is very good term plan available at lower premium rates. If you have not purchased any term plan you should opt for this policy.
#2 LIC Jeevan Amar Term Plan
LIC is the oldest and most trusted insurance company of India. LIC has recently launched new term plan called as Jeevan Amar. This plan is sold in offline mode only. Jeevan Amar is available with two options called as level sum assured and increasing sum assured. It is one of the best plan by LIC. This plan offers very good flexibility and features. Key features of LIC Jeevan Amar are given below.
- Jeevan Amar is Pure Term Plan available in offline mode only.
- This plan provides option of level sum assured and increasing sum assured.
- This plan offers special premium rates for women and non-smoker.
- Jeevan Amar offers maximum coverage up to 80 years of age.
- This plan offers selection to policy holder for death benefit payment – lumsum or installments.
- Minimum sum assured in this plan is 25 Lakh with No cap on maximum sum assured.
- Policy term in Jeevan Amar is 10 years to 40 years.
Overall LIC Jeevan Amar is complete plan which offers flexibility and increase in coverage with age.If you have not purchased any term plan you should go for LIC Jeevan Amar.
#3 LIC e-Term Insurance Plan
LIC e-term is one of the best term insurance plans. This plan can be purchased online. The key features and eligibility condition for e-Term insurance plan are given below.
- This plan can be purchased only via online route.
- It is pure term plan which means that it only provides death benefits and do not offer any other benefit on maturity.
- This plan covers all types of death including accidental death.
- The e-term policy does not offer any riders.
- Loans cannot be given against this policy.
- Minimum Policy term is 10 years and a maximum is 35 years.
- This plan provides coverage up to 75 years of age.
- Minimum sum assured under this plan for the non-smoking category is 50 Lakh.
A high claim settlement ratio and trusted brand are positives about this plan. The premium of this plan is very high and this plan does not offer any riders.
#4 ICICI Prudential iProtect Smart Term Plan
ICICI Prudential iProtect Smart Term Plan provides 360 degree coverage to your life at a reasonable cost. This plan also offers claim payment on diagnosis of 34 critical illnesses. The key features and benefit of this plan are given below.
- You have options to select payout for a nominee from lump sum, Income, and increasing income.
- This plan offers terminal illness benefit. This means you will be paid for detection of critical illness.
- It gives you the option to add accidental benefit at the later stage.
- This plan covers a wide range of critical illness.
- The death due to suicide is also covered under this plan.
- Minimum Policy term is 10 years and a maximum is 30 years.
- Minimum sum assured under this plan is 8 Lakh.
#5 HDFC Click 2 Protect 3D Plus Term Plan
HDFC Click 2 Protect 3D Plus Term Plan is unique and best term insurance plans that provide coverage against three uncertainties death, disability and disease. This plan is offered by HDFC. Key features and benefit detail of this plan are given below.
- HDFC Click 2 Protect 3D Plus offers 9 different options for the coverage.
- This plan offers life stage protection feature to increase insurance coverage on certain key milestone without medical.
- It also offers top-up option to increase coverage every year.
- This plan offers attractive premium rates for female lives and non-tobacco users.
- This term plan provides comprehensive coverage and premium waiver benefit on diagnosis of critical illness.
- Minimum Policy term of this plan is 5 years and a maximum is 40 years.
#6 Max Life Online Term Plan Plus
Max Life Online Term Insurance Plan is next in the list of best term insurance plans in India. This plan offers basic life cover along with increasing monthly income to your family in your absence. Key features and benefit detail of this plan are given below.
Max Life Online Term Plan Plus offers one-time payout to nominee along with increasing monthly income for 10 years.
- You can maximize plan benefit by opting for additional riders.
- This plan gives the option to increase coverage at important milestones.
- The Minimum policy term of this plan is 10 years and a maximum is 35 years.
- This plan provides maximum coverage up to age 85 Years.
- This plan is also offered to NRI in the selected countries.
High claim settlement ratio, increasing monthly income to nominee and coverage up to maximum age 85 years are plus points for this plan.
#7 SBI Life eShield
SBI Life eShield is one of the best term insurance plans offered by SBI Life. eShield is pure term plan. eShield offers a wide range of benefits at an affordable premium. Key features of this plan are given below.
- SBI eShield offers an option to select a benefit from life cover and an increasing cover.
- This plan offers inbuilt accelerated terminal illness benefit and two rider options for complete cover.
- This plan offers a discount on the premium for a non-smoker.
- The Minimum policy term of this plan is 5 years and a maximum is 30 years.
- This plan provides a maximum coverage up to age 75 Years.
Few Recommendations before buying Term Insurance Policy
- Go for Online Term Plan instead of offline term plan. Online term plans are much cheaper as no middleman agent is involved in between.
- Claim settlement is one of the leading indicator don’t rely too much on claim settlement ratio.
- Fill up the complete details given in the form without hiding anything. Never allow someone to fill up the proposal form.
- I would not advice to go for any type of riders while buying term plan.
- Review your insurance requirement regularly and make changes with growing needs.
Over to you –
7 Best Term Insurance Plan given above is as per available IRDA data and feature sets. You might have already purchase term plan. If you don’t find your insurance policy in above list that does not mean that your choice is wrong. Remember that there are multiple term plans in India and selection method employed by every individual is different. Make sure to study policy document before buying plan.
Do share your queries and comments.
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