Best 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
*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
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Hi
I have planned to take Aviva LifeShield Advantage term insurance plan please advice
Aviva settlement ratio is around 90%. Comparing to other top 5 plans suggested by me, this should be ok. Also I heard premiums are also low. You can consider it.
Hi Suresh,
Does this cover insurance for NRIs staying abroad? What are the T&Cs for the same.
Regards,
Ajay Dhoot
Hi Ajay, As per my knowledge the term covers everywhere irrespective of whether the person is in India or outside India or travelling outside India. However insurance companies are floating specific plans for NRI’s as per their requirement. Hence if you are NRI, just check with insurance company before taking any term plan in India
What are the rules if I opt for taking term policies from two different insurance companies? Do I need to inform the insurance about my other plan so that there is not settlement issue later.
Amol, As per my knowledge, if you take two policies within same insurance company you need to indicate the same in your proposal. Otherwise if you are taking from two different companies, they would not ask you any questions during proposal time, hence you can ignore this.
Thanks for the article. Its really helpful.
I have one doubt, where the benefits are almost similar, there is a huge difference between premiums specially LIC and others. Can someone shed more light on it ? Why is LIC asking almost double the premium for same thing ?
BR
Amit
Amit, Since LIC has good track record, high settlement ratio and trust built in, it charges high premiums. e.g. other insurance companies settlement ratio is low and they are just few years in insurance industry, hence to attract customers, they need to charge low premiums.
Hi,
I just wanted to know from where did you get individual policy wise claim settlment ratio?
because I thought IRDA provided overall settlment ratio.
Thanks
Sager, You are right, this is at insurance company level only and not for specific policy level. Since you got such query, I just amended the line items to reflect that it pertains to insurance company level and not policy level. Thanks for your feedback.