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Max Life Insurance
Claim Settlement Ratio (2023-24)
99.65%
Income Tax Benefits
Save up to INR 54,600 on taxes
Other Benefits
20% lower term insurance premiums for women, zero-cost terminal illness coverage
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Having a suitable term insurance plan does not only provide a financial blanket to your loved ones but it also takes care of your financial liabilities such as any specific debt or mortgages and loans, which can be easily settled, in an unfortunate event of your demise or in your absence. One can also cover their spouse and dependent children under the same term insurance policy.
Here’s our guide to help you choose the best term insurance plan, offering the maximum benefits and coverage depending on your financial situation and goals.
Featured Partners
1
Max Life Insurance
Claim Settlement Ratio (2023-24)
99.65%
Income Tax Benefits
Save up to INR 54,600 on taxes
Other Benefits
20% lower term insurance premiums for women, zero-cost terminal illness coverage
On Max life insurance’s secure website
18-65 years
INR 20 lakh (Life and Critical Illness Rebalance) and INR 50,000 (Life Protect and Income Plus Plan)
98.66% (For FY 2021-22)
18-65 years
INR 20 lakh (Life and Critical Illness Rebalance) and INR 50,000 (Life Protect and Income Plus Plan)
98.66% (For FY 2021-22)
The HDFC Life Click 2 Protect Life is one of the most comprehensive financial protection plans that have outpaced its peers because of its wide range of valuable benefits. It offers benefits as per the life assured’s lifestyle and provides protection at any stage in life. This plan comes in three variants: Life Insurance and Critical Illness Rebalance, Life Protect and Income Plus, which covers death, disability and critical diseases. It also provides discounts on premium to women policyholders and non-tobacco users.
Key Features:
Variant 1: Life and Critical Illness Rebalance:
• The life assured gets a balance advantage between death and critical illness benefit, as the sum assured amount is divided between life cover (80%) and critical illness cover (20%) of the basic sum assured.
• With the increase in the policy tenure, the critical illness cover increased with the corresponding reduction in life cover.
• On the diagnosis of any critical illness, all the future premiums get waived off and the life cover keeps continuing.
• Death benefit is payable as a lump sum amount to the life assured’s nominee, if they die during the policy term.
• The sum assured on maturity will be equivalent to the total premiums paid if return on premium (RoP) benefit is selected, otherwise the amount would be nil.
Variant 2: Life Protect Plan:
• Under this plan, a lump sum benefit is provided to the nominee on death of the life assured.
• The sum assured on maturity will be equivalent to the total premiums paid if RoP benefit is selected, otherwise the amount would be nil.
Variant 3: Income Plus:
• Under this option, the assured has an advantage of receiving regular monthly income after attaining the age of 60 years.
• The assured has an option to choose maturity age as per the below table:
Option | Fixed Term | Whole Life |
---|---|---|
Maturity Age | 70, 75, 80 or 85 years | Full Life |
Death benefit is payable as a lump sum amount to the life assured’s nominee, if they die during the policy term.
If the assured is survived during the policy term, then an income which is equivalent to 0.1% of the basic sum assured is payable to them at the end of every month, once they attain the age of 60 years, till either death or the end of policy term, whichever comes first.
Maturity benefit is only limited to fixed term and not for whole life.
Add-on Covers:
• Waiver of premium on critical illness option.
• Accidental death benefit.
• Alteration of premium payment frequency.
• Option to reduce premium payment term from regular pay to limited pay.
Eligibility Criteria
Plan Type | Life and Critical Illness Rebalance |
Life Protect | Income Plus |
---|---|---|---|
Minimum Entry Age | 18 years | Fixed Term: 18 years Whole Life: 45 years |
30 years Whole Life: 45 years |
Maximum Entry Age | 65 years | 65 years | 50 years |
Maturity Age | 75 years | Fixed Term: 85 years | Fixed Term: 85 years |
Learn more: Read our full HDFC Term Insurance Review
18-65 years
INR 20 lakh
99.34% (For FY 2021-22)
The Max Life Smart Secure Plus Plan is the only term plan available in India that offers two death benefits. The policyholder also gets inbuilt cover for terminal illness at zero cost. This plan also provides several other benefits such as RoP feature, exit benefit premium breaks, additional payout on accidental death. The plan comes in three variations: Base Cover, with Accelerated Critical Illness Option and with Accident Cover Option.
Key Features:
• The maximum coverage is till 85 years.
• With life cover and increasing life cover, the life assured has the option to increase the sum assured amount for the upcoming years while selecting the policy.
• Upon the diagnosis of terminal illness, the policyholder will receive 100 % of the guaranteed death benefit, up to INR 1 crore.
• Under RoP, the policyholder is entitled to receive total premium paid till the end of the policy term, if they survive post maturity of the policy.
• Premium break feature allows the policyholder to take a break from premium payments for a while, if the policy has completed ten years. If opted, then the policy remains continued with the same risk cover. The policyholder can choose this option twice in the whole premium payment term.
• Provides joint life cover for the spouse of the policyholder, where if the spouse is diagnosed with some terminal illness or dies, then the beneficiary will receive a death benefit of INR 10 lakh and the main life cover will be continued at a low premium rate. This benefit also comes up with in-built waiver of premium for spouse’s life coverage, where future premiums are waived off on the demise of the policyholder.
• Under its accident cover, the life assured’s nominee receives the life coverage amount on the unfortunate demise of the assured due to accidental death up to INR 1 crore.
• Accelerated critical illness cover provides protection against 40 major or minor listed critical illnesses. Upon the diagnosis of critical illness, the policyholder will receive 50 % of the base death benefit, up to INR 50 lakh.
• The policyholder can choose to exit the policy with an exit benefit along with RoP benefits. And, once the premiums have been returned, the policy gets terminated.
• With a voluntary sum assured top-up feature, the policyholder can enhance the sum assured amount at a later stage of the policy. If the sum assured chosen is INR 50 lakh or more than it, then the policyholder can take up this feature after one year of policy term also. The coverage can be increased up to a maximum of 100% of base sum assured.
Add-on Covers:
• Waiver of premium on critical illness, death or dismemberment.
• Critical illness and disability rider.
Eligibility Criteria
Plan Type | Base Plan | Accelerated Critical Illness | Accident cover option |
---|---|---|---|
Minimum Entry Age | 18 years | 18 years | 18 years |
Maximum Entry Age | 65 years | 65 years | 65 years |
Maximum Maturity Age | 85 years | 75 years | 85 years |
Learn more: Read our full Max Life Term Insurance Review
18-65 years
INR 50 lakh
97.82% (FY 2021-22)
18-65 years
INR 50 lakh
97.82% (FY 2021-22)
The ICICI Pru iProtect Smart Term Plan is one of the most popular term life insurance plans of ICICI Prudential. It offers comprehensive coverage at affordable premium rates. In case of an unfortunate demise of the life assured, the nominee has the option to choose to receive a regular monthly income or with a lump sum benefit. It also has inbuilt terminal illness cover which includes HIV/AIDS too.
Under this option, the policyholder gets the life coverage amount on the diagnosis of terminal or end-stage illness. The plan provides the whole life coverage till 99 years. The women policyholders get up to 18% discount on premium along with the extended coverage for women specific illnesses such as breast cancer and cervical cancer.
Key Features:
The plan comes in different variants such as Life, Life Plus, Life and Health and All-in-One.
Plan Options | Terminal Illness/Waiver of Premium on Disability | Accidental Rider Add-On Option | Critical Illness Add-On Option |
---|---|---|---|
Life | Yes | No | No |
Life Plus | Yes | Yes | No |
Life and Health | Yes | No | Yes |
All-in-One | Yes | Yes | Yes |
• One can also choose the kind of term insurance claim payout from payout options such as lump sum, monthly income, increasing income by 10% every year and a combination of both lump sum and monthly income.
• Allows the policyholder to pay the premium in three options such as: limited, regular and single payment.
• Pre health screening depends on the health details submitted by the policyholder.
• Additional death benefit is payable up to 50% in case of any big event in life of the policyholder such as marriage or birth of a child.
Add-on covers:
• Coverage for 34 critical illnesses.
• Accidental death cover.
• Waiver of premium due to permanent disability.
Eligibility Criteria
Minimum Entry Age | Maximum Entry Age | Maximum Maturity Age |
---|---|---|
18 years | 65 years | 99 years |
Learn more: Read our full ICICI Prudential Term Insurance Review
18-65 years
INR 25 lakh
98.07% (FY 2021-22)
18-65 years
INR 25 lakh
98.07% (FY 2021-22)
The Aditya Birla Sun Life Shield is an extensive and comprehensive term policy, which offers eight variations designed as per different protection needs. The policyholder also has the option to cover their spouse under the same plan. We also picked this plan as it returns back the premium amount on the maturity of the policy term. This plan also has the inbuilt terminal illness feature, which immediately pays the 50% of the sum assured up to the maximum of INR 2.5 cores, on the diagnosis of any terminal or end-stage illnesses. It also offers a 4% discount on the online purchase of the policy.
Key Features:
Variant 1: Level Term Assurance, where the sum assured amount opted by the policyholders remains same throughout the policy term.
Variant 2: Level Term Assurance with Waiver of Premium Benefits, along with the same sum assured amount the policyholder gets an advantage of paying no future premiums till the end of the policy term, on the diagnosis of critical illness or total and permanent disability.
Variant 3: Increasing Term Assurance, the policyholder has the option to enhance the sum assured at the inception of the policy either by 5% or 10% per annum of the basic sum assured, without any increase in premium.
Variant 4: Increasing Term Assurance with Waiver of Premium Benefits.
Variant 5: Decreasing Term Assurance, where the coverage gets reduced over the policy term at a specific rate. So, if the policyholder dies at the beginning of the policy term, the nominee will receive more money than if the policyholder dies at the end of the policy term. This is purchased to offer personal asset protection such as any loan or mortgage.
Variant 6: Decreasing Term Assurance with Waiver of Premium Benefits.
Variant 7: Return of Premium, here the sum assured remains constant for the whole policy term and if the life assured survives till the maturity of the policy, then the total premium paid are returned to them by the insurer.
Variant 8: Return of Premium with Waiver of Premium Benefits
If the policyholder chooses any above variation from one to four, then they can also add their spouse under joint life protection cover.
Add-on covers:
• Accidental death and disability rider
• Critical illness rider
• Surgical care rider
• Hospital care rider
• Accidental death benefit plus
Eligibility Criteria
Minimum Entry Age | 18 years |
---|---|
Minimum Entry Age | 18 years |
Maximum Entry Age | 65 years |
Maximum Maturity Age | 85 years |
Learn more: Read our full Aditya Birla Sun Life Insurance review
18-60 years
INR 25 lakh
97.53% (FY 2021-22)
18-60 years
INR 25 lakh
97.53% (FY 2021-22)
The PNB MetLife Mera Term Plan Plus offers a wide range of coverage and new-age features through one term insurance plan. Along with RoP, the plan also provides other benefits such as child education, increasing cover, joint life and life coverage up to 99 years. It also allows all the future premiums to get waived-off, if the policyholder is diagnosed with any of the listed 50 critical illnesses or in case of the accidental total and permanent disability.
Key Features:
Variant 1: Life, which provides coverage against death of the policyholders.
Variant 2: Life Plus, covers death benefit along with terminal illness benefit. It also allows all the future premiums to be waived off on accidental total and permanent disability or diagnosis of any listed critical illnesses such as cancer, heart stroke, among others.
Variant 3: Life Plus Health, covers all the benefits of Life Plus variant along with lump sum payout on the diagnosis of any listed critical illnesses.
• Option to choose RoP benefit to receive all the paid premiums back on the survival till maturity.
• Option to cover your spouse under the same term plan.
• Option to increase life cover amount and opt for children education support under ‘cover enhancement’ options.
Add-on covers:
• Accidental death benefit.
• Serious illness rider
• Critical illness rider.
• Accidental disability rider
Eligibility Criteria
Minimum Entry Age | 18 years |
---|---|
Minimum Entry Age | 18 years |
Maximum Entry Age | 60 years |
Maximum Maturity Age | 75 years Whole life cover: 99 years |
18-60 years
INR 1 lakh
98.53% (FY 2021-22)
18-60 years
INR 1 lakh
98.53% (FY 2021-22)
The Tata AIA Sampoorna Raksha Supreme is the most comprehensive and best-selling term plan amongst all its competitors. This term plan provides multiple plan options like Life, Life Plus, Life Income and Credit Protect option which comes with the live coverage up to 100 years. It provides lower premium rates for women and non-smokers and offers a discount on choosing a higher sum assured amount. The policyholder has also been given the option to increase the life coverage at every important milestone of life such as marriage or birth of a child.
Key Features:
• Under the “Life Option”, the life assured is entitled for a death benefit, where the sum assured is paid to the nominee in case of a demise of the life assured. If the policyholder chooses the top-up or life stage option, then the death benefit includes an extra sum assured. This option also has an in-built payor accelerator benefit, that provides 50% of the sum assured towards any diagnosis of terminal illness.
• Under the “Life Plus Option”, the life insured can receive a survival benefit of 105% of the total premiums paid at the end of the policy term, provided if the policy is not terminated earlier. This option also has an in-built payor accelerator benefit, that provides 50% of the sum assured towards any diagnosis of terminal illness.
• Under the “Life Income Option”, the policyholder is entitled to receive regular monthly income along with the death benefits. This option also has an in-built accelerator benefit, that provides 50% of the sum assured towards any diagnosis of terminal illness.
• Under the “Credit Protect Option”, the total sum assured is received as a death benefit to the nominee of the life assured, if all the premiums have been paid up to date. This option also has an in-built payor accelerator benefit, that provides 50% of the sum assured towards any diagnosis of terminal illness.
Add-on covers:
• Accelerated coverage for accidental death or disability, critical illnesses and terminal illnesses.
• Option to extend the coverage of a specific rider.
• Option to receive the balance premium amounts on maturity of the policy.
• Option to choose benefit payout as a lump sum, monthly income for 10 years, or a combination of lump sum and income for a fixed period.
• Option to choose one or more risk covers from illness, hospitalization and disability. Provides extensive coverage against major and minor illnesses with multiple claims features.
Eligibility Criteria:
Plan Type | Minimum Entry Age | Maximum Entry Age | Maturity Age |
---|---|---|---|
Life Option | 18 years | 65 years | 100 years |
Life Plus Option | 18 years | 65 years | 100 years |
Credit Protect Option | 18 years | 65 years | 95 years |
Life Income Option | 20 years | 60 years | 100 years |
Learn more: Read our full Tata AIA Term Insurance Review
18-65 years
INR 50 lakh (online) INR 75 lakh (offline)
97.05% (FY 2021-22)
18-65 years
INR 50 lakh (online) INR 75 lakh (offline)
97.05% (FY 2021-22)
The SBI Life eShield Next is a new-age cost-effective term plan which offers a whole life coverage up to 100 years. This term plan has three variants: Level Cover, Increasing Cover and Level Cover with Future Proofing Benefit. It also has an inbuilt terminal illness benefit, which provides the coverage equal to the sum assured with a maximum limit up to INR 2 crore, on the diagnosis of terminal or end-stage disease. It also has a better half benefit, which allows the policyholder to cover their spouse under the same plan.
Key Features:
Variant 1: Level Cover Benefit, in this plan, the absolute sum assured amount is the same or in level throughout the policy term.
Variant 2: Increasing Cover Benefit, here, the absolute sum assured amount is increased by 10% of the basic sum assured amount at the end of every fifth policy year. This increase in amount is subject to the maximum of 100% of the basic sum assured. This increase in the cover is limited till the age of 71 years.
Variant 3: Level Cover with Future Proofing Benefit, gives a choice to the life assured to increase the absolute sum assured amount on attaining specific stages of life during the policy term. Such as on getting married, the life assured has the option to increase the sum assured amount by 50% of the basic sum assured, up to maximum of INR 50 lakh. Similarly, 25% increase in the basic sum assured amount is given on the birth of first and second child.
Option to choose from two benefits such as death benefit payment mode or better half benefit option.
Death benefit can be paid in either lump sum, monthly installments or the combination of both. Whereas, the Better Half benefit, provides financial protection in the absence of the life assured to their spouse. The plan cover would be the level cover which will be paid in lump sum, irrespective of the plan option chosen by the life assured.
The terminal illness benefit is in-build with this plan. If the life assured is diagnosed with any of the terminal illnesses, before the age of 80 years, they would be paid the benefit equal to the sum assured on death till the date of diagnosis, subject to a maximum of INR 2 crore.
Option to pay the premium amount either only once or for a limited period or entire policy term (limited, regular or single payment option).
It provides the death benefit to the nominee on the demise of the life assured. For regular and limited policies, the benefit is higher of either the 10 times the annualized premium, or absolute sum assured to be paid on death, or 105% of the total premiums received up to the death. And, in case of single premium policies, the benefit is higher of either 1.25 times of single premium or absolute sum assured to be paid on death.
Add-on cover:
• Accidental death benefit rider.
• Accidental total and permanent disability rider.
Eligibility Criteria
Minimum Entry Age | 18 years |
---|---|
Minimum Entry Age | 18 years |
Maximum Entry Age | 60 years |
Maximum Maturity Age | For single and regular premium: 85 years For whole life: 100 years |
Learn more: Read our full SBI Life Term Insurance Review
18-65 years
INR 50 lakh
99.02% (FY 2021-22)
18-65 years
INR 50 lakh
99.02% (FY 2021-22)
The Bajaj Allianz Smart Protect Goal is a comprehensive term plan, which provides flexibility to policyholders to choose the best possible optimum coverage with benefits as per their needs. This plan also gives your premiums back if the policyholder survives beyond the maturity of the policy. Multiple variants of this plan ensures easy customization of the policy along with the several add-on benefits. There is a 3% discount as well on the online purchase of this term plan.
Key Features:
• The policy has several variants such as: Life Cover, Child Education Extra Cover Variant, Life Cover with Joint Life Variant, Increasing Life Cover Variant.
• Flexibility to choose sum assured, maturity benefit, policy term and add-on covers.
• Flexibility to choose premium payout options such as single, regular or limited pay.
• Option to choose a whole life coverage up to 99 years.
• The plan covers Covid-19 claims.
• Option to choose RoP as maturity benefit and if one opts for whole life cover option then they cannot avail RoP benefit and vice versa.
Add-on covers:
• Accidental death benefit.
• Accidental total permanent disability benefit.
• Critical illness benefit.
• Waiver of premium benefit on critical illness.
Eligibility Criteria
Minimum Entry Age | 18 years |
---|---|
Minimum Entry Age | 18 years |
Maximum Entry Age | 65 years |
Maximum Maturity Age | 85 years Whole life cover: 99 years |
18-65 years
INR 25 lakh
98.82% (FY 2021-22)
18-65 years
INR 25 lakh
98.82% (FY 2021-22)
The Kotak Life e-Term Plan is a pure protection plan which comes in three different variants such as Life Option, Life Plus Option, and Life Secure Option. The policy has several benefits such as flexibility to choose premium payout options, increase and decrease sum assured amount, accidental death benefits up to INR 1 crore, waiver of premium on total and permanent disability and critical illness rider.
Key Features
Variant 1: Life Option, this plan provides sum assured to the nominee on death of the policyholder.
Variant 2: Life Plus Option, this variant has the dual benefit of death cover and accidental death benefit which is subject to the maximum of INR 1 crore.
Variant 3: Life Secure Option: this variant has the dual benefit of death cover and provides waiver of future premiums on the diagnosis of total and permanent disability.
The policy comes with different payout options such as immediate payout, level recurring payout and increasing recurring payout, which has to be selected at inception of the policy.
Life secure option is not available for single premium policyholders.
It provides the death benefit to the nominee on the demise of the life assured. For regular and limited policies, the benefit is higher of either the sum assured or 11 times of the annualized premium or 105% of all premiums. And, in case of single premium policies, the benefit is higher of the sum assured or 1.25 times of single premium paid.
Add-on cover:
• Critical illness plus benefit.
Eligibility Criteria
Minimum Entry Age | 18 years |
---|---|
Minimum Entry Age | 18 years |
Maximum Entry Age | 65 years |
Maximum Maturity Age | 75 years |
18-60 years
INR 25 lakh
98.67% (FY 2021-22)
18-60 years
INR 25 lakh
98.67% (FY 2021-22)
The Reliance Nippon Life Protection Plus is a comprehensive term plan, which aims to provide the maximum flexibility in choosing the sum assured coverage, premium payouts as per the need of policyholder. The policyholder also has the flexibility to increase and decrease the sum assured coverage. This policy also provides discounts for non-smokers.
Key Features
Variant 1: Life Cover, provides full coverage to the nominee against the death of the policyholders.
Variant 2: Increasing Cover Plan, the base sum assured increases by 5% up to maximum limit of 100% if chosen at inception of the policy.
Variant 3: Level Cover Plus Income Plan, apart from death benefit, the nominee also receives monthly income of 1% of the sum assured for a period of 10 years, in case of death of the policyholder.
Variant 4: Whole of Life Cover Plan, the sum assured is payable as lump sum to the nominee on the death of the policyholder.
There is no maturity benefit payable in any of the variants in this plan.
The policyholder has the option to enhance the coverage for important milestones by paying additional premium for increased sum assured. This option once taken cannot be changed at any time during the policy term.
Under the top-up benefit option, the policyholder can increase the coverage by 10% of the basic sum assured subject to a maximum of 5 lakh per increase at 3rd, 4th, 5th and 6th policy anniversary.
Option to reduce the sum assured coverage, if the policyholder has attained the age of 45 years. The amount can not be less than the basic sum assured which was chosen at the time of policy inception.
Eligibility Criteria
Minimum Entry Age | 18 years |
---|---|
Minimum Entry Age | 18 years |
Maximum Entry Age | 60 years |
Maximum Maturity Age | 75 years |
The following are the documents which are required if one is planning to buy term insurance policies:
Pocket-Friendly Term Plan: A low-cost term plan is based on the age and health conditions of the policyholder. The premium charged would be automatically low for non-smokers or consumers leading a healthy lifestyle. Thus, it is advisable to buy a term plan at an early stage of life as one can avail the higher coverage at a very low premium cost.
Buy An Online Plan: It is also advisable to always purchase the term plan via online channels rather than through any agent. As online plans come with better offers and discounts and are available at lower premium rates as compared to the offline ones.
Inbuilt Policy Benefits: Before purchasing a term insurance policy, please refer to all the benefits and also the living benefits that are inbuilt in that plan. For example, at times most of the plans include terminal illness or accidental death rider at no or zero cost. So, it is always beneficial to check such details about these benefits and how they will be payable to the nominee or the policyholder in the hour of need.
Choose Your Policy Term Wisely : When buying a term plan, always make sure to enter the policy tenure and sum assured coverage as per your future needs and requirements. If your policy term ends at 10,20 or 30 years and then, if you renew the plan up to a certain age, it might cost you a lot of money as you will be renewing your policy at a later age. It is advisable to have the policy for as long as you retire so as to get rid of high renewal costs.
Claim Settlement Ratio (CSR): While choosing the best term plan, it is important to consider the CSR of the insurer which depicts the number of claims settled by the insurer versus the number of actual claims filed by the policyholder or their nominees. A CSR higher than 80% is generally considered as the good claim settlement ratio.
Forbes Advisor India analyzed 50 life insurance companies offering term insurance plans on these metrics:
A term insurance plan refers to a pure life insurance policy which provides death benefit to the nominee of the policyholder, if the covered policyholder dies during the specific policy tenure. It is a financial instrument which helps your family to be financially strong, even if you are not there.
It is to be noted that a term insurance plan is known as a pure life insurance product, as it only provides the death benefit with no investment or saving component, like the way it is found in endowment or ULIP plans. One has the option to purchase the term insurance plans for a tenure of 10, 15 or 20 years.
However, once the term insurance expires, the policyholder has the option of either renewing it or allow the policy to simply lapse.
Term plan is a traditional life insurance policy which offers a safety net to the heir/nominee of the policyholder, in the event of the unfortunate demise of the insured. A term insurance plan can be purchased by any individual who is a bread-winner of the family or financially supporting their household along with dependent parents or children.
It can be purchased by individuals such as parents or single parents, young working professionals or self-employed, newly-married individuals, working women, retired people.
Safeguards Your Family: if you have dependents at home and you’re a sole earning member, then do not forget to buy a term plan as per your needs and requirements. You definitely need a term plan as it will provide financial coverage to your spouse, children and parents, even when you are not around. This life coverage amount can be further used by the family members to pay off loans, debts and other financial obligations.
Low Cost High Coverage: One should also buy a term plan as it comes up with an affordable premium range and provides good coverage. The premium charged would be automatically low for non-smokers or consumers leading a healthy lifestyle. Thus, it is advisable to buy a term plan at an early stage of life as one can avail the higher coverage at a very low premium cost.
Inbuilt Policy Benefits: Nowadays, term plans are not just pure life cover but can be also clubbed with other benefits and optional riders which makes your life insurance much more useful. For example, many of the plans include terminal illness or accidental death rider at no or zero cost. So, it is beneficial to check such details about these benefits and how they will be payable to the nominee or the policyholder in the hour of need.
Provides Coverage for Longer Tenure: Term plans are offered with long-term policy tenure such as 10,15, 20 or 30 years. It is beneficial as it provides coverage for the longer period of life.
Even if your policy term ends at 10,20 or 30 years and then, if you renew the plan up to a certain age, it might cost you a lot of money as you will be renewing your policy at a later age. It is advisable to have the policy for as long as you retire so as to get rid of high renewal costs.
Huge Discounts on Online Plan: You can get a term plan online in a very easy and hassle-free process. It is also advisable to always purchase the term plan via online channels rather than through any agent. As online plans come with better offers and discounts and are available at lower premium rates as compared to the offline ones.
To know the difference between a term plan insurance and life insurance policies, read our article on Term Plan Vs Life Insurance.
This is an apt question that runs on everyone’s mind when one should buy a term insurance policy. Insurance experts believe that the right time to buy a term plan is when you are young and healthy. This is simply because the younger you will be, the premium payout will be also lesser. And, the older you grow, there will be more chances of life-threatening diseases, which means more premium.
Generally, if you have just started your family or unmarried and have a stable career, then this is the right time to buy a term plan which is not only very affordable on your pocket but also helps you to save on tax. However, due to any reason, if you have missed buying a term insurance policy early in your life, then sooner you buy one the better it is for you and your near and dear ones.
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1. It is one of the most cost-effective and simple life insurance plans. The only aim is to provide financial help to the policyholder’s family, in their unfortunate absence due to death.
2. If the policyholder passes away before the end of the policy term, then the insurance company provides their family with a stated death benefit.
3. There is no need to pay the premium amount for the entire coverage tenure. Premium is paid only till when one is working. One has the freedom to choose a premium payment tenure which is in line with your retirement age.
4. Many insurance companies offer plans with return of premium benefits, where, if the policyholder survives the policy term and there have been no claims made, then the premiums are returned back to the policyholder.
5. The most important feature of the term plans is that they usually offer larger sums assured, which can even go up to INR 1 crore, available at most affordable premiums.
6. One has the full flexibility to choose for receiving payout as “monthly income” in addition to lumpsum amount. This monthly income is further divided into fixed monthly income plans or increasing monthly income plans.
7. There is an option to choose riders so as to make the pure term plan more extensive in coverage. The rider which can be added, such as:
8. The policyholder has the option to enhance the coverage at major life stages such as marriage, new addition in the family, children’s education or buying a home. The benefit of this upgrade option is that one has the full flexibility to increase their life cover without again going through medicals or documentation.
Level Term Plan: It is the most common kind of term plan which is provided by most of the insurance companies to its policyholders. In the level term plan, the sum assured amount selected at the beginning of the policy remains constant throughout the full policy term.
Increasing Term Insurance Plan: Here, the policyholder has been given an option to enhance their scope of sum assured amount at different stages of life which can be marriage, buying a new home, children’s education or for their marriage. This plan is definitely a great option which helps to keep up stable with the rising prices and thus ensuring that the sum assured cover that one opts for is sufficient enough to cover inflation also.
Decreasing Term Insurance Plan:As the name suggests, this is just the opposite of increasing term insurance plan. Here, the sum assured coverage amount reduces at a predetermined rate as and when age increases. These kinds of plans work on the notion that as if age increases the financial liabilities and obligations also decreases and therefore the need for a higher sum assured can be avoided.
Convertible Term Insurance Plan: A convertible term insurance policy is a policy which can be easily transformed into another kind of life insurance plan. Like, in a convertible option, a term insurance plan can be changed into a whole life plan or an endowment plan at a later stage as per one’s need and requirement. If a policyholder expects that their financial obligations or responsibilities might change in the near future, then they can opt for this type of term plan.
Term Return of Premium (TROP) Plans: This is the new and additional feature which has been recently added to the term insurance plans to make it more viable and attractive. A return of premium term plan, provides some sort of savings component, which is generally not offered by pure term plans.
A term plan with return of premium is designed to offer survival benefit to the insured individual, in case they survive the tenure of the policy plan. If the policyholder survives the policy term, then all the paid premiums till the maturity date are paid back to him as a survival benefit. However, the return of premium can be only made only if the policyholder has not made any claim during the entire policy term.
If you pay a premium towards a term insurance plan, then you are entitled to receive the tax benefits under Section 80C, Section 10 (10D) and Section 80D of the Income Tax Act. Following are the few tax deductions which can be claimed only by individuals and a Hindu Undivided Family (HUF), such as:
Section 80C: Tax deductions of up to INR 1.5 lakh under Section 80C on the premium paid towards the term insurance plan.
Section 10 (10D): The death benefit which is given to the family after the demise of the policyholder before the policy expires, the family receives the full death benefit amount without any taxes levied on it.
Section 80D – A tax deduction of up to INR25000 is available on premiums paid for term plans along with a critical illness rider option.
Following are the different types of riders which can be included in your insurance policy:
Accidental Death Benefit Rider: If you opt to choose this rider along with your term plan, then you will receive some extra coverage other than your basic term plan, in case you met with personal accidental death. With this rider, the beneficiaries of the insured receive the additional coverage along with basic coverage, if the policyholder dies due to an unfortunate accident.
Critical Illness Rider: This rider facilitates the policyholder to receive the lump sum payment if they have been diagnosed with any of the listed critical illnesses covered under the plan such as heart attack, cancer, brain stroke and so on. However, once the policyholder receives payout on the basis of critical illness rider, then the insurer might have to either continue with lower coverage or end the policy, depending upon the term and conditions of the specific policy.
Permanent Disability Rider: This rider provides benefit to the policyholder, If they become permanently disabled in an accident. For extensive coverage, the policyholder can combine this rider along with the accidental death benefit rider.
However, when one has opted for a permanent disability rider with their pure term plan, the insurance company has to pay a periodic amount to the policyholder, in case if he or she becomes disable due to accidental injuries. This payout is for a certain period of time which provides an income assurance to the policyholder when they are unable to work due to an such accidental disability.
Income Benefit Rider: If the policyholder is the only earning member in the family, then this rider can be opted along with the basic term plan. With this rider, the beneficiaries receive extra income every year for a pre-specified period, in case of an unfortunate demise of the policyholder. It is to be noted that Income benefit is over and above the regular benefits which are available under your basic insurance plan.
Waiver of Premium Rider: Here, the policyholder’s future premium payments get waived-off by the insurer, if the policyholder is not able to pay premium amount, due to loss of income or accidental disability. However, your inability to pay the premium will not impact your coverage and benefits, these shall remain the same and intact as per the policy.
One-Time Payout: This is the basic kind of payout, which an insurance company provides in terms of a pure term plan. Here, the insurance company provides one single payment of death benefit to the beneficiaries of policyholder. For instance, if you purchase a term plan having life coverage of INR 50 lakh, then this full amount would be paid to your beneficiaries as a single payout at the time of your demise.
One-Time Payout with Fixed Monthly Lump Sum Payment: Here, the beneficiary receives a single death benefit along with the fixed amount of monthly payment for a specific period as decided by the policyholder at the time of purchasing the policy. This monthly payment generally helps the beneficiary to meet all their daily expenses.
One-time payout with Increasing Monthly Payouts: Here, the beneficiary is entitled to receive one time single payout which is the total sum assured coverage amount at the time of death of the insured. Along with a one-time payout of death benefit, the beneficiary will also receive monthly payouts which tends to increase with every passing year for a specific period of time.
Age: As per the rule of thumb, younger individuals are offered much lower premiums as compared to older people for a simple reason that chances of suffering from life-threatening diseases are comparatively very less in younger people.
Medical History: If any individual has a family medical history of critical illnesses such as diabetes, heart attack or cancer, then under such circumstances the policyholder might have to pay more premium due to their family medical background.
Lifestyle Habits: While filling-up the form for having a term insurance, you will be also asked about your smoking or drinking habits. There are more premium rates for smokers and alcohol users as compared to non-smokers.
Policy Tenure: If you want to have life coverage for longer years, then you will have to shell out more on premium as insurance companies are covering you for a much higher risk. Thus, a small tenure policy will have lower premiums.
Occupational Risk: If someone is having a risky job-profile and working for industries such as shipping, gas, mining, oil, tend to pay more premium as compared to someone having a less risky or desk job profile.
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Policy Name | Company – Logo | Forbes Advisor Rating | Forbes Advisor Rating | Entry Age | Minimum Sum Assured Coverage | Claim Settlement Ratio (FY 2021-22) | Learn More CTA text | Learn more CTA below text | LEARN MORE |
---|---|---|---|---|---|---|---|---|---|
HDFC Click 2 Protect Plus | ![]() |
4.5 | ![]() |
18-65 years | INR 20 lakh | 98.66% | View More | ||
Max Life Smart Secure Plus | ![]() |
4.5 | ![]() |
18-65 years | INR 20 lakh | 99.34% | View More | ||
ICICI Pru iProtect Smart Term Plan | ![]() |
4.0 | ![]() |
18-65 years | INR 50 lakh | 97.82% | View More | ||
Aditya Birla Sun Life Shield | ![]() |
4.0 | ![]() |
18-65 years | INR 25 lakh | 98.07% | View More | ||
PNB MetLife Mera Term Plan Plus | ![]() |
4.0 | ![]() |
18-60 years | INR 25 lakh | 97.53% | View More | ||
Tata AIA Sampoorna Raksha Supreme | ![]() |
3.8 | ![]() |
18-60 years | INR 1 lakh | 98.53% | View More | ||
SBI Life – eShield Next | ![]() |
3.5 | ![]() |
18-65 years | INR 50 lakh | 97.05% | View More | ||
Bajaj Allianz Life Smart Protect Goal | ![]() |
3.5 | ![]() |
18-65 years | INR 50 lakh | 99.02% | View More | ||
Kotak Life e-Term Plan | ![]() |
3.5 | ![]() |
18-65 years | INR 25 lakh | 98.82% | View More | ||
Reliance Nippon Life Protection Plus | ![]() |
3.5 | ![]() |
18-60 years | INR 25 lakh | 98.67% | View More |
It is advisable to buy a term insurance plan when you are young. The minimum entry age of purchasing a term plan is 18 years. Buying a term plan at an early stage will always come at low premium cost. So, once you are earning on your own and have dependents in your family, you must not delay to buy a term insurance plan.
Term insurance coverage amount totally depends upon your age, family medical history, income and number of dependents in your family. If you have a spouse, dependent children and financial obligations, opt for a higher sum assured coverage which will help your family, even if you are not there.
In this case, if you have a term insurance plan and you survive the policy maturity date, then your coverage will be stopped and no further premium payments have to be made by you towards your term plan. However, if you have chosen “return on premium” benefit, then you will be entitled to receive back all the premiums paid by you till maturity of the policy.
Terminal illness are those diseases which cannot be cured and mostly result in death. If the policyholder is diagnosed with terminal illness, then they receive some percentage of the sum assured coverage amount and all the future premiums get waived off.
The main advantage of this limited premium payment option is that you just have to pay premium for a limited pre- specific period while your plan runs throughout the tenure.
If the nominee dies, then the policyholder has the option to change the nominee name. And if the nominee dies after the death of the main policyholder but before receiving the death benefit, then the payout is given to their legal heirs.
There is no specific limit which restricts changing the nominee in term insurance plan unless mentioned by the insurance company. The policyholder has the full right to change the nominee, as and when they want.
Technically, in most of the cases, the policyholder cannot change the duration of life cover, after it has been already purchased. However, at the time of renewing the policy, one has the full right to modify the term insurance policy.
The right age to buy a term plan is post 18 years or as soon as you have started earning. You can surely buy a term plan till the maximum entry age of 65 years or beyond, depending upon the insurance company. But at this stage of life, you have to shell out more money for premium even for decent coverage.
No, you cannot buy a term plan without showing any income proof. The policyholder needs to submit the salary slip or Income Tax return filings to be eligible for buying a term insurance.
The term insurance plans offer death benefit as a pure life cover plan whereas life insurance policies provide maturity benefits along with the life cover. The term plans do not have a saving component like insurance policies, but offer high cover at low premium rates. Also, they do not promise any maturity or survival benefits like life insurance policies, however, certain plans have Return on Premium benefit, which pays back the entire premium paid if the policyholder outlives the maturity of the term insurance policies. Both the plans offer death benefit but the compensation is much higher in the term plans rather than any life insurance policy.
Yes, the term plans offer such flexibility under the joint life cover benefit, where the policyholder can cover their spouse under the same plan. This benefit is optional and can be chosen at the inception of the term insurance plan at an additional premium cost.
Dipen Pradhan is a Staff Reporter for Forbes Advisor India. He has more than 10 years of experience in journalism. He covers the personal finance beat. When he is not writing, he enjoys documenting the community's ethnic knowledge, and travels to explore rural hotspots.