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What is Term Insurance?
Term insurance is the simplest form of life insurance designed to cover the policyholder's unfortunate death. You can get a large amount of life cover in exchange for a relatively low premium rate. Upon the death of the insured person during the policy tenure, the death benefit will be paid out to their nominee.
You can even get additional protection against specific conditions like accidental death, critical illness, or terminal illness with add-on riders. Apart from the death benefit, term insurance offers additional benefits such as life-stage benefits, whole-life options, premium breaks, return of premium benefits, and much more.
Why Should You Buy a Term Insurance Plan?
Here are the reasons why you must buy a term life insurance plan:
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To secure your family's financial future
A term plan secures your family's financial future by providing death benefits, helping them cover necessary expenses in your absence. -
Protect your family from the burden of outstanding debts
If you have an ongoing loan, your family could be burdened with that liability, affecting them financially. A term plan protects your family from the burden of debts, loans, or any other kind of liability. -
Ensures a stable source of income for your family
The best term life insurance in India ensures a stable source of income for your family in your absence, helping them cover essential expenses. -
To offer a no-compromise lifestyle for your family
A term plan ensures that your family's lifestyle will not be compromised in your absence by providing a lump sum or monthly income. -
To avail of tax benefits
A term plan offers tax benefits to policyholders of up to ₹1.5 lakhs under Section 80C, and the death benefit is tax-free under Section 10(10D) of The Income Tax Act, 1961. -
To have a safety net against uncertainty
A term plan provides a safety net against life's uncertainties, such as medical expenses, emergencies, and unexpected financial events.
How Does Term Insurance Work?
Let's understand how term life insurance works with the help of a simple premium illustration.
Meet Arvind
Arvind, a 25-year-old non-smoker and healthy individual, earns ₹7 lakhs annually.
Bought Policy
Arvind purchased a ₹1 crore term insurance policy for a tenure of 25 years to secure his family.
Unfortunate Demise
In the 8th policy year, Arvind unfortunately passed away.
Claim
His family received ₹1 crore as a death benefit from the insurer.
After Claim
His dependents can use the death benefit to substitute the loss of income.
What are the Best Term Insurance Plans in India in 2026?
Find the best term insurance plan in India online from the top insurance companies at PolicyX. Below, we've provided a customized list of best term plans based on factors like CSR, brand value, and affordability. You can compare term insurance plans by visiting PolicyX.com.
| Company Name | Plan Name | What makes it best? | CSR | Affordability |
|---|---|---|---|---|
Max Life Insurance |
Max Life Smart Term Plan Plus | 7 Plan Options to Choose From Cover Continuance Benefit Inbuilt Terminal Illness Cover Insta Payment on Claim Intimation |
99.65% | ₹989 per month |
HDFC Life Insurance |
Click 2 Protect Super | Return of Premium Option Waiver of Premium Joint Life Option |
99.5% | ₹1,181 per month |
Bajaj Allianz Life Insurance |
E-Touch Online Term | Discount on High Sum Assured Flexible Payout Covers Terminal Illness and Disability |
99.23% | ₹873 per month |
Tata AIA Life Insurance |
Sampoorna Raksha Promise | 100% Return of Premiums Affordable Premiums Surrender Benefit |
99.13% | ₹483 per month |
ICICI Prudential Life Insurance |
ICICI Pru iProtect Smart Plus | Life Stage Protection Smart Exit Benefit Whole Life Option |
99.17% | ₹1,083 per month |
*The sample premium is calculated for a 30-year-old male earning ₹10-15 lakhs annually, looking for insurance coverage of ₹1 crore till 60 years.
What are the Benefits of a Term Insurance Policy?
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Coverage for specific tenure
Term insurance only provides coverage for a specific period, but with a whole life option, you can get lifelong protection—as long as you keep up with the premium payments. This option provides protection for up to 99 or 100 years.
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Surrender Benefit
Some insurance providers offer built-in surrender benefits, allowing you to terminate the policy before maturity and receive a surrender value.
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Affordable Plans
Term insurance is the most pocket-friendly life insurance product, offering high life coverage at affordable premiums.
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Death Benefit
Term insurance is a protection-oriented plan that offers a guaranteed death benefit payout. The death benefit is paid out to the nominee within 30 days of the claim being made.
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Premium Breaks
It allows you to skip a premium payment for a specific period during the policy term without losing benefits. During a premium break, the policy remains active, and you continue to enjoy coverage.
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Joint Life Option
The joint life option allows you to add your spouse to a single plan, offering financial stability if one partner dies.
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Life Stage Benefit
A life stage benefit allows you to increase your life cover limit as your financial responsibilities change at milestones like marriage, childbirth, or adoption. It's ideal for young investors to upgrade their life cover without repeated documentation.
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Voluntary Sum Assured Top-up
It allows you to enhance your life coverage at any time during the policy term. A voluntary top-up requires paying a higher premium.
What Are the Key Features of Term Insurance?
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Easy to Buy
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Flexible premium payment options
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Long-Term Protection
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Suitable for All Age Groups
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Adjustable Cover
Easy to Buy
Several plans are available in the market to fulfill different life objectives. On PolicyX.com, you can easily compare term insurance plans with a few clicks.
Flexible premium payment options
Beyond life cover, term insurance allows you to choose a premium payment term based on your budget. Premiums can be paid in various intervals: Single Pay, Limited Pay, or Regular Pay.
Long-term protection
With a term insurance plan, you get protection for up to 100 years, securing your family's financial future long-term.
Suitable for all age groups
You can purchase a term plan if you are between 18-65 years of age. There are various best term life insurance plans in India you can consider buying.
Adjustable cover
With an inbuilt optional cover, you can increase your basic sum assured and get additional protection against specific conditions. Some plans offer a life-stage benefit option at policy inception, allowing you to enhance your basic sum assured at important life stages.
What Are The Factors That Affect Term Insurance Premiums?
Following are some factors that determine how much premium you may need to pay for your term life insurance policy:
Age
Insurers consider younger individuals healthier. As age increases, the risk of developing health issues tends to rise. Thus, the younger you are, the more affordable your premiums will be. It's recommended to buy term insurance at an early age.
Gender
Typically, insurers offer special premiums for women and non-smokers as they are expected to live longer.
Health
Family medical history is also an important factor affecting overall premiums. Premiums will be more expensive if your family has a history of serious illnesses.
Lifestyle Habits
Consumption of drugs and alcohol may lead to higher premiums as they increase health risks. Individuals who consume alcohol or drugs are typically charged higher premiums.
Policy Duration
If you choose a policy covering 99 years, the premium will be higher. Generally, the higher the age, the higher the premiums.
Occupation
Individuals engaged in high-risk activities are charged higher premiums. The risks you're exposed to at work affect the premium because they can increase health risks. To calculate your term insurance premiums based on these factors, you can use the PolicyX term insurance premium calculator.
Who Should Buy a Term Plan?
Whether you're a salaried or self-employed person, anyone is eligible for a term insurance plan, as it has no specified minimum income requirement.
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Parents
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Newly Married Couple
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Working Women
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Self-employed Individuals
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Youtubers & Influencers
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Taxpayers
Parents
Parents provide emotional and financial care at every phase of their children's lives. If something happens to them, their children's future could be at risk, especially if the children are not yet mature. Therefore, securing your child's future with a term insurance plan is essential.
Newly Married Couple
Newly married couples need to discuss and prepare for long-term savings and their future. With a term insurance plan's joint life cover option, both husband and wife can be secured under the same plan.
Working Women
Today, women in India are participating in every sector, with strong leadership roles. An earning woman can purchase a term plan to financially secure her parents, spouse, or children even in her absence.
Self-employed Individuals
An unsteady income increases the risk to a family's overall financial well-being. If something happens to you, your family could face financial hardships. Hence, a term insurance plan is an important part of a self-employed individual's financial plan.
Youtubers & Influencers
Social media has become a significant platform for business and self-employment. Whether you're a YouTuber or an influencer, you might be living a dream life, but often with an unsteady income. Have you considered what would happen to your family if something unforeseen occurred? They could face financial hardships. For streamers, bloggers, or influencers, buying a term insurance plan to protect your family is crucial.
Taxpayers
With a term insurance plan, you can enjoy tax benefits and claim deductions that help reduce your taxable income. Under Section 80C, you can get a tax exemption of up to ₹1.5 lakhs annually for premiums paid. Under Section 10(10D), the death benefit and maturity benefit (if applicable) are tax-free.
Types of Term Insurance Plans
Let's understand the different types of term insurance policies in detail.
| Type of the plan | Features |
|---|---|
| Basic term plan | These plans only provide a sum assured to the nominee in case of the death of the policyholder. No survival benefits are included. Example: LIC Saral Jeevan Bima |
| Term plan with return of premium | These plans give the premium amount back to the policyholders only if they survive the policy term. Example: Max Life Term Plan with Return of Premium (TROP) |
| Term insurance with monthly income | These plans offer monthly income to the policyholder's dependents in case of the policyholder's demise. Example: SBI Life e-Shield Insta |
| Term insurance with critical illness | These plans offer inbuilt coverage against critical illnesses. Example: ICICI Pru iProtect Smart |
| Term insurance with accidental disability & death cover | These plans offer inbuilt coverage against accident disability and death cover. Example: Bajaj Lifestyle Secure |
Can NRIs Buy Term Insurance in India?
Yes, NRIs can buy term life insurance policies in India. However, they must check if their insurer provides services in their country of residence.
Here are a few factors you must understand before buying NRI term insurance in India:
- To buy an NRI term insurance plan, a minimum education qualification of graduation is required.
- To buy a term insurance plan, you need an income of at least ₹10 lakhs.
- You should be fully vaccinated against COVID-19.
- Medical underwriting will be conducted via video call.
- Receive an additional 5% discount on first-year premiums.
- Get an 18% GST waiver, based on prevailing tax laws.
- You will have to bear the medical examination expenses.
What is a Term Insurance Rider?
Term insurance riders offer additional financial support to the nominee beyond the base policy for specific events. Simply put, it's an optional benefit that allows you to increase the base sum assured in exchange for extra premiums.
Check out the term riders that you can include with your base term plan.
1
Terminal Illness Rider
This add-on rider allows you to claim your sum assured while you're alive if diagnosed with a terminal illness mentioned in the plan brochure.
2
Accidental Death Benefit Rider
It offers an additional death benefit if death occurs due to an accident. An accident is defined as a sudden, uncertain, and spontaneous event.
3
Waiver of Premium Rider
A Waiver of Premium rider is a term insurance add-on that waives future premium payments if the policyholder becomes critically ill or physically impaired.
4
Critical Illness Rider
This popular term insurance add-on provides financial support if you're diagnosed with a critical illness covered under the plan.
5
Accidental Total & Permanent Disability Rider
This rider offers financial protection to the policyholder in case of total and permanent disability caused by an accident throughout the policy tenure.
How to Choose the Best Term Insurance Plan?
To choose the best term insurance, you need to consider certain factors. Let's understand these factors in detail:
- Claim Settlement Ratio Check the insurance provider's Claim Settlement Ratio (CSR) to measure their trustworthiness and credibility.
- Solvency Ratio Look for insurers with a solvency ratio of at least 1.5 to ensure they are financially capable of settling claims.
- Additional Benefits Offered Look for a plan offering additional benefits that set it apart, such as life stage, joint life, or surrender benefits.
- Available Premium Payment Options Choose a plan that offers flexible premium payment or payout options, allowing you to select one based on your budget.
- Customer Testimonials and Reviews Research online reviews to assess customer satisfaction and claim experiences before making a decision.
Mandatory Documents Required To Buy Term Insurance Plans
Following are the documents that you need to submit to the insurance company while buying a term plan:
| Types of Documents | Documents |
|---|---|
| Identity Proof | Passport, Voter ID, Aadhaar Card, PAN Card |
| Income Proof | If salaried: Last 3 months' salary slips and bank statements showing salary credit. |
| If self-employed: Last 3 years' Income Tax Returns with Computation of Income (COI). | |
| Address Proof | Water Bill, Telephone Bill, Aadhaar Card, Rent Agreement, Electricity Bill |
| Medical Proof | Latest medical test reports as requested by the insurer |
How to Buy the Best Term Insurance Plan?
To buy a suitable term plan for yourself, you can visit the insurer's official website, PolicyX's website, or offline by visiting their branch office.
- Go to the insurer's official website.
- Click on the 'Buy Now' option.
- Select a term plan.
- Fill out the required details and check the premium.
- Pay through UPI or debit card to receive policy details on your registered email ID.
Follow the steps below to buy the best term insurance plan hassle-free on PolicyX.com:
- Visit the PolicyX website.
- Fill out details like Name, Date of Birth, and Phone Number, then click 'Continue'.
- Submit details like annual income, educational qualification, and smoking habits.
- Compare the available plans.
- Select a plan that best suits your requirements.
- Proceed to pay via Net Banking, Debit, or Credit Card.
- Receive the policy details on your registered email ID.
Why Should You Buy Term Life Insurance From PolicyX.com?
Here are the reasons for buying a term insurance plan from PolicyX.com:
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Compare and choose the best
PolicyX helps you compare a wide range of plans based on their features, allowing you to choose the one that best fits your requirements. -
Hassle-free purchase process
Buying term plans from PolicyX.com is a hassle-free process, allowing you to compare various term plans within 30 seconds. -
Customer's choice
PolicyX is a leading insurance aggregator, trusted by customers for its excellent services and support. Our motto is: No Spam, No Gimmicks, Only Expert Advice. -
Good customer service
You can contact PolicyX through email or IVR number, and one of our insurance experts will connect with you shortly to address all your concerns. -
Claim settlement support
PolicyX stands with you even in the hardest of times, providing dedicated claim settlement support when required.
Term Insurance Claim Process
Most term insurance companies offer a simple and easy-to-follow claim process. Below are the steps to file a claim for your term insurance policy.
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Step 1
Inform the insurance company about the claim.
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Step 2
Submit the required documents.
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Step 3
The insurer verifies the documents.
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Step 4
The insurance company will decide whether to approve the claim.
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Step 5
The claim will be settled if approved by the insurance company.
Documents Required for Claim Settlement of a Term Insurance Policy
In case of the policyholder's demise, the nominee should inform the insurer as soon as possible. While settling claims, the claimant must read the terms and conditions carefully and submit all relevant documents for a hassle-free claim. Documents will vary depending on the death scenario:
Case 1: Natural Death
- Original policy document.
- Claim form.
- Claimant's application form.
- Other documents required by the insurance company.
- Hospital discharge summary and medical reports (if death due to illness).
Case 2: Accidental Death
- Post-mortem report.
- Police FIR report.
- Original policy document.
- Claim form issued by the insurance company.
- Attending doctor's statement or medical attendance certificate.
- Any other documents required by the insurance company.
