Best Term Insurance Plans in India 2024
Expert comparison of top term insurance policies from 15+ insurers. Calculate your coverage needs, compare premiums, and choose the right life insurance protection for your family.
Term insurance is the purest and most affordable form of life insurance that provides financial protection to your family in case of your untimely demise. With premiums starting as low as ₹500 per month, a term insurance policy ensures that your loved ones can maintain their lifestyle and meet financial goals even in your absence. In India, over 3.2 crore term insurance policies are currently active, yet only 4% of the population has adequate life insurance coverage.
Unlike traditional life insurance policies, term insurance offers pure risk cover without any investment component, making it significantly more affordable. For instance, a 30-year-old non-smoker can get ₹1 crore coverage for approximately ₹8,000-10,000 per year. The key is to buy adequate coverage early when premiums are lowest. Use our term insurance premium calculator to get instant quotes from multiple insurers.
When choosing a term insurance plan, focus on three critical factors: claim settlement ratio (aim for 98%+), financial strength of the insurer (solvency ratio above 1.5), and policy features like riders and coverage options. According to IRDAI data for FY 2022-23, Max Life leads with a 99.51% claim settlement ratio, followed by HDFC Life at 99.03%. Additionally, consider your tax benefits under Section 80C (premiums up to ₹1.5 lakh) and Section 10(10D) (tax-free death benefit).
Claim Settlement Ratios (FY 2022-23)
The claim settlement ratio indicates the percentage of claims settled by an insurer. A higher ratio means better reliability. IRDAI data shows Max Life leads with 99.51%, followed by HDFC Life at 99.03%.
Top Term Insurance Plans in India
Min Coverage
₹25 Lakh
Max Coverage
₹100 Crore
Entry Age
18 - 65 years
Key Features:
- Life cover up to 100 years
- 11 rider options
- Online discount up to 10%
- Flexible premium payment
Min Coverage
₹25 Lakh
Max Coverage
₹50 Crore
Entry Age
18 - 65 years
Key Features:
- Whole life cover option
- Return of premium variant
- 8 rider options
- Premium waiver benefit
Min Coverage
₹25 Lakh
Max Coverage
₹50 Crore
Entry Age
18 - 65 years
Key Features:
- Highest claim settlement ratio
- Life cover up to 85 years
- 10 rider options
- Monthly income option
Min Coverage
₹25 Lakh
Max Coverage
₹50 Crore
Entry Age
18 - 60 years
Key Features:
- Affordable premiums
- Life cover up to 75 years
- 7 rider options
- Increasing cover option
Min Coverage
₹25 Lakh
Max Coverage
₹25 Crore
Entry Age
18 - 65 years
Key Features:
- Comprehensive coverage
- Life cover up to 85 years
- 9 rider options
- Terminal illness benefit
Min Coverage
₹25 Lakh
Max Coverage
₹10 Crore
Entry Age
18 - 65 years
Key Features:
- Trusted brand
- Life cover up to 80 years
- 8 rider options
- Accidental death benefit
Important Term Insurance Riders
Riders are additional benefits you can add to your base term insurance policy for enhanced protection. While they increase your premium by 5-15%, they provide comprehensive coverage for specific scenarios.
Provides a lump sum payout (typically 25-100% of sum assured) upon diagnosis of critical illnesses like cancer, heart attack, stroke, kidney failure, etc. The base policy continues even after rider payout.
Provides an additional sum assured (equal to base cover) if death occurs due to an accident. Your nominee receives double the coverage amount, making it highly valuable for high-risk professions.
If you're diagnosed with a critical illness or become permanently disabled, future premiums are waived while the policy remains active. Ensures your family stays protected even if you can't pay premiums.
Instead of a lump sum, your family receives a monthly income (typically 1% of sum assured) for a specified period. Helps maintain regular cash flow and prevents mismanagement of large sums.
1. Calculate Adequate Coverage
Use the Human Life Value (HLV) method: multiply your annual income by 10-15 years, add outstanding loans and future goals (children's education, marriage), then subtract existing assets. Most experts recommend coverage of at least 15-20 times your annual income.
2. Check Claim Settlement Ratio
Always choose insurers with a claim settlement ratio above 98%. This ensures your family won't face claim rejection. Also check the claim settlement time - faster is better. Max Life, HDFC Life, and ICICI Prudential consistently maintain high CSRs.
3. Buy Early, Pay Less
Term insurance premiums increase with age. A 25-year-old pays 40-50% less than a 35-year-old for the same coverage. Buy when you're young and healthy to lock in lower premiums for the entire policy tenure. Don't wait for the "right time."
4. Choose the Right Tenure
Select a tenure that covers you until retirement (typically 60-65 years). If you're 30, opt for a 30-35 year policy. Ensure coverage extends until your children are financially independent and major loans are repaid. Longer tenure = better protection.
Important Considerations
- •Disclose health conditions honestly: Non-disclosure can lead to claim rejection. Insurers verify medical history during claims.
- •Compare online vs offline: Online term plans are 15-20% cheaper due to lower distribution costs. Buy directly from insurer websites.
- •Review annually: Increase coverage when income grows, you get married, have children, or take on new loans.
- •Avoid return of premium (TROP): TROP plans cost 3-4x more. Better to buy pure term and invest the difference in mutual funds.
Related Resources
Frequently Asked Questions
The ideal coverage should be 15-20 times your annual income. For example, if you earn ₹10 lakh annually, aim for ₹1.5-2 crore coverage. Additionally, factor in outstanding loans (home loan, car loan), future financial goals (children's education costing ₹50 lakh, marriage expenses ₹30 lakh), and subtract existing liquid assets. Use our coverage calculator above for a personalized recommendation based on your specific situation.
Claim settlement ratio (CSR) indicates the percentage of claims an insurer settles versus rejects. A 99% CSR means 99 out of 100 claims are approved. This is crucial because the primary purpose of term insurance is to provide financial security to your family. Choose insurers with CSR above 98% and check their claim settlement time. IRDAI publishes annual CSR data - Max Life (99.51%), HDFC Life (99.03%), and ICICI Prudential (98.69%) consistently rank high.
Online term insurance is 15-20% cheaper than offline policies because insurers save on agent commissions and operational costs. For a ₹1 crore, 30-year policy, you could save ₹30,000-50,000 over the policy tenure. The claim settlement process is identical for both. However, if you have complex health conditions or need hand-holding, an offline agent might help. For straightforward cases, buy online directly from insurer websites for maximum savings.
Term insurance policies have a grace period of 30 days for monthly premiums and 30-90 days for annual premiums. If you don't pay within this period, the policy lapses and coverage ends. Some insurers offer a revival period (typically 2-5 years) where you can restart the policy by paying pending premiums with interest and undergoing fresh medical tests. However, there's no guarantee of revival approval. To avoid lapses, set up auto-debit or choose annual payment mode.
Yes, you can buy multiple term insurance policies from different insurers, and all will pay out in case of death. This is actually recommended for higher coverage needs. For instance, instead of buying ₹2 crore from one insurer, you could buy ₹1 crore each from two insurers. This diversifies risk and ensures at least one claim is settled even if there are issues with another. However, you must disclose existing policies when buying new ones, and total coverage should align with your income and financial needs.
Yes, term insurance premiums qualify for tax deduction under Section 80C of the Income Tax Act, up to ₹1.5 lakh per year. Additionally, the death benefit received by your nominee is completely tax-free under Section 10(10D). However, ensure your annual premium doesn't exceed 10% of the sum assured (5% for policies issued after April 2012) to maintain tax-free status of death benefit. For a ₹1 crore policy, keep annual premium below ₹5 lakh to retain tax benefits.