Best Term Insurance Plans in India

Best Term Insurance Plans in IndiaBest Term Insurance Plans in India

Term Insurance Plans in India are best as they come with high risk coverage and low premiums and in case of unfortunate death of the life insured, the nominee would get sum assured. However identifying best term insurance plans in India may be difficult as your insurance agent may cheat you by just looking at his commissions and do not worry about its suitability for you. This article is based on request from Vikas and Seetharaman who requested on “Suggest-a-topic” to write about Best Term insurance plans in India.

Identification of best term insurance plans in India

Now the tricky part is about identifying the good term insurance plans in India. There are a few parameters which we have taken to identify them.

1) Settlement ratio: Settlement ratio plays a key role in identifying a good term insurance plan. Settlement ratio is nothing but the claims settled by an insurance company against the total settlements received. The higher settlement ratio is good for the company as claim rejection chances are very less from such insurance companies.

2) Enhanced Features: Though every term insurance program would possess its own features, any enhanced and additional features would be helpful for individuals looking for insurance.

3) Customer service: One more key point which I felt is to look for a term insurance plan where customer service of such insurance company is good. There is no point in choosing a term insurance and your family struggling to bring the claim accepted due to delay or poor response from the insurance company.

Also read: How to choose best term insurance plan in India

Best Term Insurance Plans in India

1) LIC Amulya Jeevan Term Insurance Plan: This is pure offline term insurance plan from LIC. Below are the features of this plan:

  • The claim settlement ratio of this company for FY 2011-12 is 97.4%
  • Sum assured would be paid to nominee in case of death of the life insured. No maturity benefit or survival benefit. No loans can be taken from such plans.
  • Minimum age : 18 years and Max is 60 years. Maximum age at maturity should be 70 years
  • Policy is available for 5 to 35 year term
  • Minimum sum assured: Rs 25 Lakhs and Max Sum assured – No limit
  • Exclusions: In case of suicide committed by insured before 1 year, no claim would be paid
  • Premium for Rs 1 Crore sum assured for a 30 year individual for the 30 year policy term: Rs 33,600 per annum

Though the premium looks high, I feel this is one of the best term insurance plans in India which one should consider.

2) ICICI I-Care Term Insurance Plan: This is a pure term insurance plan from ICICI which is available to buy online. Below are the features of this plan:

  • The claim settlement ratio of this company for FY 2011-12 is 96.5%
  • Sum assured would be paid to nominee in case of demise of the life insured. No maturity benefit or survival benefit. No loans can be taken from such plans.
  • I-Care option-II available with accidental death benefit feature equal to sum assured for maximum of Rs 50L with small extra premium. Means if you are taking Rs 50 L term insurance with accidental death benefit feature, your total sum assured would be Rs 1 Crore (Rs 50 L + Rs 50 L).
  • Minimum age : 18 years and Max is 65 years. Maximum age at maturity should be 75 years
  • Policy is available for 5 to 30 year term
  • Minimum sum assured: Rs 10 Lakhs and Max Sum assured for 50 year individual is Rs 1.5 Crore and 65 year individual is Rs 70 Lakhs
  • Exclusions: In case of suicide committed by insured before 1 year, no claim would be paid
  • Premium for Rs 1 Crore sum assured for a 30 year individual for the 30 year policy term: I-care Rs 12,360 and with accidental death benefit feature it would be Rs 15,281

I feel this is one of the good term insurance plan in India which comes with an accidental death benefit rider where you can get the additional sum assured of Rs 50 Lakhs with small additional premium.

Also read: Best Mediclaim Policy in India

3) HDFC Click-2-Protect Term Insurance Plan: This is pure online term insurance plan from HDFC. Below are the features of this plan:

  • The claim settlement ratio of this company for FY 2011-12 is 96.2%
  • Sum assured would be paid to nominee in case of demise of the life insured. No maturity benefit or survival benefit. No loans can be taken from such plans.
  • Minimum age : 18 years and Max is 55 years. Maximum age at maturity should be 65 years
  • Policy is available for 10 to 30 year term
  • Minimum sum assured: Rs 10 Lakhs and Max Sum assured – 10 Crores
  • Low premiums for tobacco users
  • Premium for Rs 1 Crore sum assured for a 30 year individual for the 30 year policy term: Rs 10,200
  • I personally had a bad experience in reaching customer support for more than 45 days to consider this plan as I want to take some additional benefits which are available only offline. Few readers on this blog expressed that customer support is good for this insurance company.

If customer support is improved, no doubt this could be the best term insurance plan in India with high settlement ratio and low premium.

4) SBI Smart Shield Term Insurance Plan: This is pure offline term insurance plan from SBI Life. Below are the features of this plan:

  • The claim settlement ratio of this company for FY 2011-12 is 95.5%
  • Sum assured would be paid to nominee in case of death of the life insured. No maturity benefit or survival benefit. No loans can be taken from such plans.
  • Minimum age : 18 years and Max is 65 years. Maximum age at maturity should be 70 years
  • Policy is available for 5 to 30 year term
  • Minimum sum assured: Rs 25 Lakhs and Max Sum assured – No limit
  • Premium for Rs 1 Crore sum assured for a 30 year individual for the 30 year policy term: Rs 11,925
  • Accident death rider, permanent disability riders are discontinued w.e.f. 1-Oct-2013.

5) Kotak e-Preferred Term Insurance Plan: This is online term insurance plan from Kotak life. Below are the features of this plan:

  • The claim settlement ratio of this company for FY 2011-12 is 92.1%
  • Sum assured would be paid to nominee in case of demise of the life insured. No maturity benefit or survival benefit. No loans can be taken from such plans.
  • Minimum age : 18 years and Max is 65 years. Maximum age at maturity should be 70 years
  • Policy is available for 5 to 30 year term
  • Minimum sum assured: Rs 25 Lakhs and Max Sum assured – No limit
  • Premium for Rs 1 Crore sum assured for a 30 year individual for the 30 year policy term: Rs 12,921
  • Covers tobacco users with low premium
  • This policy available with step-up option and step-down option
  • Step-up option: When an individual is married or brought first house, sum assured can be increased by 50% with additional premiums. In case of birth of a child or during the policy anniversary of 1/3/5 years, 25% sum assured can be enhanced with additional premium. The additional premium payable would be 3% of the basic premium (before 15 years from policy date) and 5% of the basic premium (after 15 years from policy date).
  • Step-down option: Similarly in case you feel you do not need high sum insured, you can reduce it with step-down option with some terms and conditions.
  • Step-up and step-down option is a unique feature of Kotak e-Preferred Term insurance plan which is not available in major term insurance plans. These extra features make this as best term insurance plan in India comparing to others.
  • Kotak website indicates that critical illness riders are available. However all major companies have discontinued these riders w.e.f. 1-Oct-2013 as per IRDA guidelines, hence I am thinking that the info available on Kotak website is yet to be updated. The website still shows that these features are available.

Also read: Premium return plan from Max Newyork Life insurance

6) Birla Sun Life Protector Plus Term Insurance Plan: This is pure offline term insurance plan from LIC. Below are the features of this plan:

  • The claim settlement ratio of this company for FY 2011-12 is 90.9%
  • Sum assured would be paid to nominee in case of demise of the life insured. No maturity benefit or survival benefit. No loans can be taken from such plans.
  • Minimum age : 18 years and Max is 65 years. Maximum age at maturity should be 75 years
  • Policy is available for 5 to 30 year term
  • Minimum sum assured: Rs 50 Lakhs and Max Sum assured – No limit
  • Premium for Rs 1 Crore sum assured for a 30 year individual for the 30 year policy term: Rs 15,650

Below is the comparison chart of these Best Term Insurance Plans in India

Best Term insurance plans in India-Features

*Claim settlement ratio is at insurance company level and not for specific policy.

Conclusion: Based on your individual requirement, you can choose one of these good term insurance plan among the top ones which are listed above.

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Suresh

Best Term Insurance Plans in India

70 comments

  • zubin baisiwala

    Hi Suresh

    Great Insight. However, you missed out on one point where most of these insurance companies try duping customers. They ask customers to undergo medical test even though a person is fit and healthy. And sometime they deliberately give negative review on medical test and their internal policy do not allow them to share the report with customer and demand a higher premium or else they reject policy and deduct medical test fee from premium and return money. I have heard many such cases.

    There are few companies like HDFC where they do not request customer to take medical test for cover under 75 lacs. Could you please enlighten me on term insurances from aforesaid companies that can be taken without medical test? If yes, what would be maximum that can be insured without medical test, like in case of hdfc for less than 75 lacs!

     

    Zubin

    • Zubin, As per my knowledge except for LIC where they have limit of say Rs 10 Lakhs and beyond medical tests have to be done, all other private insurers do not ask for medical tests upto Rs 1 Crore and in some cases up to Rs 75 L (like HDFC). 

  • Navneet Chaudhary

    What about the term insurance given by Aegon Religare? Its premium even for 1 cr and accidental Death Benefit(40lakhs) and Critical Illness rider is almost 10.5K.

    And this one is available for a really long period of age upto 75 years.

     

    I am 23 and want to have the best term plan for me. What are the main features that I should look for??

    Regards

    Navneet

    • Navneet, Religare settlement ratio is just 66%. Means for every 10 claim applications received, they are honouring or accepting only 6 and rejecting 4 of them. I personally prefer to consider term plan with highest settlement ratio irrespective of insurance premium. 

  • shiv anand

    Hi,

    Does these policies cover death of a person abroad or while travelling.

    • Shiv, As per my knowledge term insurance plans covers whether you are in India or outside India or travelling. However Indian insurance companies are issuing seperate plans for NRI’s to cater their need as they are going on long term assignments / job. It would be better to check with insurance companies before taking the policy if you are an NRI or person travelling abroad to avoid any further confusion.

      • Shiv Anand

        Hi,

        Thanks for reply. I am not an NRI but i might be travelling abroad. .

        I have another doubt. Will the policies cover accidental death while in travel.

        • Hi Shiv, As per my knoweldge less. However insurance companies like ICICI Pru care offers increased protection for death due to accident with nominal additional premiums, but provides benefit up to Rs 50 Lakhs.

  • Vikas

    Hello Suresh Sir,
    Thanks for the post. Sir what is ur opinion about aegon religare’s i-term plan and aviva i-life plan? Where to check claim settlement ratio? Once again thanks.

    • Aviva life settlement ratio is 89.5% and Religare settlement ratio is 66%. These are available on respective insurance sites. Religare settlement is very very low comparing to other insurance companies. Hence if you are planning to take new term insurance plan, avoid such companies as of now.

  • Satish

    I have taken Aviva Life shief Platinum plus.  Its services are also good and have the 96% claim settlement ratio.  Can you comment on this

    • Satish, Aviva Life insurance claim settlement ratio is 89.5% for FY 2011-12 (last report from IRDA) and not 96% as indicated by you. Min Sum assured is Rs 50L. Features are good except for low settlement ratio.

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