Term insurance is one of the simplest and most cost-effective ways to ensure financial security for loved ones. It provides a substantial sum assured for an affordable premium, offering protection against unforeseen events. With the variety of term insurance plans available, it is essential to compare options carefully to choose the most suitable plan.
This article consolidates data on term insurance policies offered by different insurers, highlighting their features, premiums, and benefits to help individuals make informed decisions.
Types of term insurance plans
Before exploring specific policies, it is important to understand the primary types of term insurance plans available:
- Level term plans: These are the most common type, offering a fixed sum assured throughout the policy tenure.
- Increasing term plans: In these plans, the sum assured increases annually, usually to offset inflation, while the premium remains constant.
- Decreasing term plans: Designed for individuals with diminishing financial liabilities, such as loans, the sum assured decreases over time.
- Return of premium plans: These plans refund the premiums paid if the policyholder survives the policy term.
- Convertible term plans: These allow policyholders to convert their term plan into another type of life insurance policy, such as an endowment or whole life plan.
Comparison of term insurance policies
The table below compares term insurance policies offered by various companies for a 30-year-old, non-smoker male living in a metro city, with a sum assured of ₹1 crore and coverage up to 70 years.
| Insurance company | Plan name | Annual premium (GST included) |
| Bajaj Allianz Life Insurance | eTouch | Rs. 13,035 |
| HDFC Life | Click 2 Protect Super | Rs. 15,863 |
| Max Life Insurance | Smart Total Elite Protection | Rs. 13,544 |
| TATA AIA Life | Sampoorna Raksha Promise | Rs. 12,899 |
| Canara HSBC Life Insurance | Young Term Plan – Life Secure | Rs. 13,387 |
Key insights from the comparison
1. Premium variations
The annual premium for term insurance policies varies depending on the insurer and the features of the plan.
2. Policy coverage
All the plans listed above provide coverage up to 70 years of age, ensuring long-term financial security. Buyers should select a tenure that aligns with their financial goals and dependents’ needs.
3. Additional features and riders
Many term insurance plans offer optional riders to enhance coverage. Common riders include:
- Critical illness cover: Provides financial support in case of severe health conditions.
- Accidental death benefit: Increases the payout if the policyholder passes away due to an accident.
- Waiver of premium: Ensures the policy remains active even if the policyholder cannot pay premiums due to disability or illness.
Riders enable customisation of the policy, making it more comprehensive.
Benefits of term insurance plans
Term insurance plans offer several advantages, making them a crucial component of financial planning:
- High coverage at low cost: These plans provide significant financial protection for a comparatively low premium.
- Simplicity: With no investment component, term insurance plans are straightforward and easy to understand.
- Flexibility: Options like regular, limited, or single premium payment modes make these plans adaptable to various financial situations.
- Tax benefits: Premium payments towards term insurance plans may qualify for tax deductions under prevailing tax laws.
Tips for choosing the right term insurance policy
Selecting the most suitable term insurance policy requires careful evaluation of personal needs and financial goals. Here are some tips to guide the process:
1. Assess financial obligations
Determine the sum assured based on current and future financial responsibilities, such as outstanding loans, dependents’ education, and daily living expenses.
2. Evaluate policy tenure
Choose a policy term that aligns with your long-term goals. Coverage should last until major financial obligations are resolved.
3. Compare premium rates
Use online tools to compare premiums for different policies. Ensure the chosen plan provides the best value for money while meeting your coverage needs.
4. Check the claim settlement ratio
The claim settlement ratio indicates the insurer’s reliability in processing claims. Opt for insurers with a high ratio for better assurance.
5. Consider riders for added protection
Enhance your policy with riders that address specific risks, such as critical illness or accidental death.
When to review and update your policy
Life circumstances change over time, and it is important to review your term insurance policy periodically. Major life events, such as marriage, the birth of a child, or acquiring a large loan, may require an increase in coverage. Reviewing your policy ensures it remains aligned with your evolving financial needs.
Conclusion
Term insurance plans provide essential financial protection for families, ensuring peace of mind and stability during unforeseen events. Comparing plans based on premiums, coverage, and additional features helps buyers select a life insurance policy that aligns with their goals.
Exploring term insurance plans allows individuals to secure their loved ones’ futures effectively and affordably. With careful planning and regular reviews, term insurance serves as a vital pillar of financial security, offering lasting benefits for policyholders and their families.
