Things to Keep in Mind when Looking for the best term insurance plan in India

Term insurance is a form of life insurance policy that protects the insured’s family financially in the event of their untimely death. It serves as an affordable coverage that provides a substantial sum assured for a low premium cost. There are several insurance providers in India that offer term insurance coverage. However, selecting a suitable term insurance plan for your requirements might be challenging, especially with all the available options. 

Hence, to simplify the process, we have discussed the basics of such coverage to help you pick the best term insurance plan in India.


What is Term Insurance – A Brief Introduction 

A term insurance policy is a form of pure life insurance plan which offers coverage for a specific period of time referred to as the policy term. The death benefit is given to the policy nominee if the insured dies within the policy term. If the insured person survives the insurance term, they won’t get any payout, and the policy will be canceled thereon.  Regardless term insurance plans in India provide a large sum insured at a low premium cost, making them an excellent alternative for consumers seeking extensive life insurance coverage.


What are The Perks of a Term Insurance Plan?

Here are a few key benefits of term insurance plans that you should know about:

  • Tax benefits: Term life insurance policies offer benefits when it comes to taxes under Sections 80C and 10(10D). The insurance premium is tax deductible under Section 80C of the Income Tax Act. Notably, the death benefit given to the nominee by the policy provider is tax-free under Section 10(10D).
  • Flexibility: The best term insurance plan in India offers policy flexibility to the policyholder with regard to premium payment frequency and the sum assured. You can select a policy term based on your financial objectives and a single or recurring payment of premiums manner.
  • Riders: Term insurance plans also extend several riders to policyholders. Individuals can add suitable rider/s to their main policy to widen its coverage. For instance, they can add an accidental death benefit rider, a critical illness rider, or a premium waiver rider to their main policy plan.
  • High-sum assured: Term insurance policies offer a substantial sum assured for a low premium. It suggests you may receive greater coverage for less money than you would with other common policies.
  • Financial security: Such an insurance policy protects your family financially in the case of your untimely death. The death benefit gained by the beneficiary or nominee of the policy may assist them in meeting their financial obligations while sustaining their lifestyle even in the absence of the policyholder.

Term insurance plans provide multiple benefits, making them a tempting alternative for anybody looking to secure the financial stability of their family. However, one should weigh in on the offerings carefully to pick a policy based on the perks they actually need.

How to Choose the Right Kind of Term Insurance Plan?

Given the countless options available on the market today, selecting a suitable term insurance plan can be challenging, especially if one doesn’t know what to look for in a policy. 

To eliminate such confusion, look for the following parameters and compare their key offerings with other policies in the market to get the best term insurance policy:


  • Premium: One of the most significant factors to look into is the premium cost of a term insurance policy. It is essential to pick a plan which offers broad coverage at a reasonable premium amount.
  • Policy Term: It is essentially the duration of the term insurance policy. It is vital to choose a policy term that provides coverage until you retire or your family members achieve financial independence.
  • Sum assured: It is defined as the amount paid by the insurance provider to the beneficiary or nominee in the event of the insured’s death. It is necessary to select a sum insured that is enough to provide for your family’s needs financially in the event of your untimely death.
  • Claim Settlement Ratio: It is the percentage of total claims settled by the insurer. To make sure that your family gets the death benefit in the event of your untimely death, select an insurance provider with a high claim settlement ratio.
  • Premium payment schedule: The frequency of premiums being paid should be dependent on your income and monthly financial standing. You may pick a monthly, quarterly, semi-annual, or annual premium payment option that suits your financial capability the most to ensure timely payments. Use a term life insurance calculator to understand which premium and payment schedule will best suit your financial plan.
  • Riders: Consider the riders offered with the insurance policy and select those that suit your requirements. For instance, if you have a high-risk lifestyle, you can add the accidental death benefit rider and/or healthcare rider to your policy.

While looking for the best term insurance plan, make sure to check the exclusions accompanying the list of policies you pick. This will help you understand whether your choice will be wise or not.


What are Term Plan Exclusions?

While term insurance offers financial security to the policyholder’s family in their absence, there are certain restrictions to be aware of. These are some of the most typical exclusions in a term policy:

Suicide: The death benefit is not paid if the insured commits suicide within the very first 1-2 years of the plan’s policy term.

Pre-existing medical conditions: In case a pre-existing medical condition was not revealed by the policy buyer at the time of purchase, the insurance company has the right to decline the claim.

Non-disclosure of material data: If an insured fails to reveal important details such as smoking, drinking, or their high-risk employment while purchasing the insurance, the insurance provider has the right to reject the claim.

Natural disasters: If the policyholder dies as a result of a natural disaster such as an earthquake or a flood, the policyholder’s insurer may refuse to pay the policy death benefit if the insurance plan does not cover those kinds of events.

Keep these pointers in mind to ensure you avail of the best term insurance plan in India.

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