HomePersonal FinanceLife InsuranceTerm Insurance Plans Comparison- How to Select a Term Plan?

Term Insurance Plans Comparison- How to Select a Term Plan?

Term Insurance Plans 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). A term plan provides financial assistance in case of an unfrozen event.

Term insurance policies are very popular nowadays. Premium rates of such policies are very low, companies are advertising term plans in a big way.

Financial planners also recommend that a term plan is best for insurance, as it covers high risk at a low price. The premium of the term plan is the lowest compared to ULIP, endowment, or money-back plan. Term plan policy is purely for risk cover.

Term Plan Comparison India

What is a Term Insurance Plan?

Term Insurance Plan is a pure life insurance policy. Term Insurance means an agreement between the insurer and the policyholder. In this policy, the insurer will pay the fixed sum assured to the nominee on the death of the policyholder. If the policyholder survives the policy term, the insurer will not pay anything.

In a few term plans, the policyholder can select how death benefit will be paid to the nominee. The payment could be either lump sum or monthly.

What are the Benefits of a 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 a 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 of tax benefits 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.

Why Term Plan?

You might be wondering, “Why would I go for a term plan instead of other types of insurance?” Here are a few reasons:

  • Affordability – Term plans typically offer higher coverage at lower premiums compared to whole-life policies.
  • Simplicity – These plans are easy to understand without complicated investment components.
  • Flexibility – You can choose the term length based on your financial goals and needs.

There are many term insurance plans in India, but all of them have different features and premium rates which confuses a prospective customer to choose the best term insurance plan. Look at the following comparison chart and Important features before purchasing the term plan.

How to Select Term Plan – Step-by-Step Guide

#1 Evaluate Your Financial Needs

Take a look at your financial situation. Ask the following questions to yourself.

  • How much coverage do I need?
  • What loans and liabilities do I have?
  • What future expenses should I consider (kids’ education, marriage, retirement, etc.)?

Making a financial plan will assist in calculating the required coverage amount. Being underinsured could put your family in a tough spot, while over-insuring might be a pointless expense.

#2 Determine the Policy Term

The next step is to decide policy term means for how much period you need insurance coverage. The term should ideally include the time when you have the most financial responsibilities.  

  • 20-30 Years: If you have young children, a mortgage, or are far from retirement.
  • 10-20 Years: If your kids are older and you’re closer to paying off significant debts.
  • 5-10 Years: If you’re nearing retirement and just need a little extra coverage.

#3 Compare Different Plans

Now you need to find out and compare various plans to see which plan is suitable for your needs. You should at least look at the following features while deciding.

  • Premium – Ensure the premiums fit within your budget without compromising on coverage.
  • Riders and Add-ons – Some insurers offer additional benefits like critical illness coverage, accidental death benefits, etc.
  • Claim Settlement Ratio – This indicates the reliability of the insurer in settling claims. Higher ratios are generally better.
  • Unique Feature – Any Unique feature provided by a plan that is of your need.

#4 Check the Reputation of the Insurer

You should find out or research about the reputation of the insurer. You can look at the following –

  • Customer Reviews  – Check online reviews for insights from existing customers.
  • Financial Strength – Look at the company’s financial ratings to ensure they’re capable of paying out claims.

#5 Understand Terms

You should understand policy terms and exclusions. Some common things to look at –

  • Suicide Clause – Most policies won’t pay out if the insured commits suicide within the first couple of years.
  • Claim Settlement – You should take a look at the claim settlement and its history.

#6 Seek Professional Advice

Seek professional advice. It is a fact that If you are uncertain, seek advice from a financial consultant. They have the ability to offer customized guidance tailored to your specific circumstances and assist you in understanding the intricacies of choosing a term plan.

Top 6 Best Online Term Insurance Plans in India

Term Plan – Comparison

Term Insurance Plans Comparison - Moneyexcel

Key Features of Various Term Plans

ICICI – iProtect Smart

  • ICICI iProtect Smart plan is available in four different options Life, Life Plus, Life Health & All-in-One.
  • ICICI Pru iProtect Smart Offers the facility of Life stage protection (increase in coverage) without any medical.
  • Accidental Death coverage is offered in Life Plus and All-in-One Plan Only.
  • 34 Critical illness is available in Life Health & All-in-One Plan.

HDFC Click 2 Protect Super

  • HDFC Click 2 Protect Super plan is offered in three different options Life Plus, Increasing Coverage + Terminal Illness Coverage & Decreasing Life Cover options.
  • Accidental Disability, Critical Illness, and Health Rider Options.
  • Option to choose increasing Death Benefit up to 200% under Life option.
  • Option to vary your Death Benefit according to your need under the Life Goal option.

Max Life Smart Secure Plus

  • Max Life Smart Secure Plus offers Life Cover and  Increasing Life Cover options up to 200%.
  • Max Life Smart Secure Plus comes with death benefits, including a cover for terminal illness and an exit value.
  • This plan provides optional benefits such as premium breaks, joint life cover, additional payout on accidental death

Bajaj Allianz Life eTouch

  • Bajaj Allianz Life eTouch offers a shield for your life to cover death, terminal illness & disability.
  • This plan offers flexibility to pay premiums throughout the policy term.
  • Bajaj Allianz Life eTouch provides a unique feature of Premium Holiday. This means you can skip your premium during the policy term for 1, 2, or 3 years.
  • Bajaj Allianz Life eTouch is available in three different policy options Life Shield, Life Shield Plus, and Life Shield ROP.

PNB MetLife Mera Term Plan Plus

  • PNB MetLife Mera Term Plan Plus is available in three different variants Life, Life Plus (Terminal Illness Benefit, Premium Waiver Benefit) & Life Plus Health.
  • PNB MetLife Mera Term Plan Plus offers an Additional Spouse Coverage Option.
  • This plan also offers step-up benefits, life stage benefits, and child education support options.

Kotak Life – Kotak e-Term

  • Kotak e-Term offers 3 plan options Life, Life Plus, and Life Secure Options.
  • Kotak e-Term comes with 3 payout options Immediate Payout, Level Recurring Payout & Increasing Recurring Payout.
  • This plan comes with a Step-Up option to increase coverage of future life-stage events.
  • You can purchase additional riders of Permanent Disability & Kotak Critical Illness Plus with the Kotak e-Term Plan.

Aditya Birla Capital – DigiShield Plan

  • Aditya Birla Capital – DigiShield Plan is a customized term plan with 10 plan options.
  • DigiShield Plan offers flexible death benefit payout options – as a lump sum, monthly income, or a combination of both.
  • This plan offers the option to cover your Spouse under the same Policy with Joint Life Protection.
  • DigiShield Plan comes with an Inbuilt Terminal Illness Benefit and Accelerated Critical Illness cover for 42 specified Critical Illnesses, on payment of an additional premium.

Tata AIA – Sampoorna Raksha Supreme

  • Tata AIA – Sampoorna Raksha Supreme offers multiple plan options Life, Life Plus, Life Income, and Credit Protect
  • In this plan, you can increase your life cover at important life milestones.
  • This plan comes with a range of rider options, you can be covered against critical illness, accidental death, etc.
  • This plan allows you to select a payout option.

edelweiss – Zindgi Protect

  • edelweiss – Zindgi Protect offers Life Cover and Return of Premium options.
  • You can add the Better Half Benefit or Future Protect Benefit by paying an extra premium.
  • edelweiss Zindgi Protect provides a premium break facility by paying an extra premium
  • This plan offers different payout selection options.

SBI Life – eShiled Next

  • SBI Life – eShiled Next offers three plan options life cover, increasing cover, and level cover.
  • You can customize this plan with a death benefit payment mode and a better half benefit option.
  • Terminal illness benefit is offered under the eShield Next Plan.
  • Additional Rider options are available under this plan.

LIC – New Tech Term Plan

  • LIC New Tech Term Plan is an Individual Pure Risk Premium Life Insurance plan with the option of level sum assured and increasing sum assured.
  • This plan is offered with differential premium rates for smokers and non-smokers.
  • You can opt for Accident Benefit Rider with LIC New Tech Term plan.
  • LIC New Tech Term plan is an online term assurance plan. This means you can purchase this plan online only.

Tips For Buying Term Insurance Policy

  • Go for an Online Term Plan instead of an Offline plan. Online term plans are much cheaper as no middleman agent is involved in between.
  • Claim settlement is one of the leading indicators don’t rely too much on the claim settlement ratio.
  • Fill up the complete details given in the form without hiding anything. Never allow someone to fill out the proposal form.
  • I would not advise going for any type of rider while buying a term plan.
  • Review your insurance requirements regularly and make changes to growing needs.

Over to you –

Looking at the above term insurance comparison you must have got fair idea about various term plans. So, Which term plan do you have currently? If you are planning to buy one, and seeking guidelines get in touch with us at sk@moneyexcel.com.

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.