Best Term Life Insurance Plans in India 2021

Finding the best term life insurance policy is difficult because there are so many factors and so many situations to consider. However, it's one of the most important financial decisions you'll make, especially if you have a family to protect. Our experts have analysed dozens of companies, hundreds of policies, and thousands of quotes to help you select the best term life insurance policy.

Kotak Term Life Insurance Plan

Consider this if you're seeking a plan with affordable annual premiums.

Kotak's Term Life Insurance plan is one of the more affordable options on the market in India. Annual premiums are 18% cheaper than the market average and are one of the five-lowest of any term insurance plan in our study. The company also offers premium payment flexibility, so you can customize and personalize your payment structure to best suit your needs.

Annual Premium Prices Term Life Insurance in India
Annual Premium Prices Term Life Insurance in India

Policyholders can choose from any of the following riders for added protection and coverage:

  • Accidental death benefit
  • Critical illness benefit
  • Total and permanent disability benefit

Benefits from these riders can be paid out in either a lump sum format equal to your sum assured amount, or in installments paid incrementally. The death benefit is generally paid out as a lump sum while the disability and critical illness benefits tend to be paid in installments. Kotak's critical illness benefit covers 37 different illnesses, the fourth-longest list of any policy we analysed.

Kotak provides a step-up option, which allows policyholders to enhance their coverage for special life events, like marriage or the birth of a child. The company also provides a slightly cheaper term life insurance option: their online plan called the E-Term Plan.

The minimum and maximum entry ages for the Term Plan are 18 and 65 years old, respectively, which are standard for term life insurance plans in India; the vast majority of policies in our study held the same age requirements. Kotak's life insurance plan also comes with a maximum maturity age of 70 years old, and while there are benefits and drawbacks tied to the maturity benefit, it's important to evaluate this against your needs and lifestyle. Consider that if you outlive the life of your policy and exceed 70 years of age, you will be paid out the maturity benefit, which could be as much as the entire sum assured of your policy. But, keep in mind that in the case of death, disability, or critical illness after the maturity age has been reached, you will no longer be covered by your term plan and your family or beneficiaries will not receive an additional payout.

Kotak's life insurance plans range anywhere from five to 30 years, which is especially beneficial for those who are slightly older than the minimum entry age, since they can lock into a shorter-term policy without any hassle. The low minimum policy term of 30 years, which is 10 years shorter than the market average, is a possible drawback to younger consumers looking for a longer-term solution.

Kotak Term PlanMarket Average
Annual Premium₹12,626₹15,384
Claim Settlement Rate97.4%95.8%
Minimum Entry Age1818
Maximum Entry Age6565
Maximum Maturity Age7080
Minimum Policy Term5 years10 years
Maximum Policy Term30 years40 years
Minimum Sum Assured₹3,00,000₹25,00,000
Maximum Sum Assured₹24,99,999No Limit
PolicyBazaar Reviews4.2 (117 reviews)4.1 (115 reviews)

Kotak's sum assured amounts are much lower than the market average, which is part of the reason their annual premiums are some of the most affordable in India. However, they have above-average reviews, scoring a 4.2-of-5 stars on PolicyBazaar and the sixth-best claim settlement rate of any insurer we analysed. With a claim settlement rate of 97.4%, policyholders can expect a speedy claims process with few obstacles.

Read More: Kotak Life Insurance Review

HDFC Life Click 2 Protect Plus Term Life Insurance Plan

Consider this if you're seeking a plan with near-perfect claim settlement rates.

HDFC Life also provides cheap annual premiums compared to the rest of the life insurance market in India. With rates 6% lower than average, HDFC's wide scope of coverage is even more attractive to potential consumers. Policyholders can also choose from any of the following riders for added protection and coverage:

  • Accidental death benefit
  • Critical illness benefit
  • Total and permanent disability benefit

The death benefit is normally paid out as a lump sum in the amount if the sum assured, but you have the option to be paid out incrementally at 100% or more of the cost of a single premium payment instead. All other benefits are typically paid out incrementally.

Not only does HDFC offer premium payment flexibility, they also offer tax benefits to policyholders. Like Kotak, HDFC Life has a maximum maturity age attached to their term life insurance policy, but unlike Kotak, HDFC Life's is much higher at 85 years old. With a maturity age five years older than the market average in India, this plan is not only suited for extremely healthy individuals who intend on outliving the policy and receiving the end-of-policy payout, but also those who may not have the opportunity to do so, since their beneficiaries will be provided with benefits for a long period of time.

Another excellent feature of HDFC Life's Click 2 Protect Plus Plan is the flexibility in terms of policy length. They offer policies as short as five years, but also offer lengthy policies up to 40 years. So, regardless of your immediate or future needs, HDFC has a tenure to fit your lifestyle at an affordable annual cost.

HDFC Life Click 2 Protect Plus PlanMarket Average
Annual Premium₹14,466₹15,384
Claim Settlement Rate99.0%95.8%
Minimum Entry Age1818
Maximum Entry Age6565
Maximum Maturity Age8580
Minimum Policy Term5 years10 years
Maximum Policy Term40 years40 years
Minimum Sum Assured₹25,00,000₹25,00,000
Maximum Sum AssuredNo LimitNo Limit
PolicyBazaar Reviews4.2 (133 reviews)4.1 (115 reviews)

Perhaps the most important aspect of HDFC Life is their nearly-immaculate claim settlement rate of 99.0%. With such a high mark, it's nearly a guarantee that your claim will not only be settled quickly, but it will be settled accurately, without many interruptions, and to the satisfaction of the policyholder.

One possible drawback, despite being in-line with the market average, is the high minimum sum assured amount. If you're seeking a cheaper policy and thus are willing to sacrifice your sum assured amount, HDFC Life may not have an option to match your needs.

Read More: HDFC Life Insurance Review

SBI Smart Shield Life Insurance Plan

Consider this if you're seeking a plan that rewards a healthy lifestyle.

SBI's Smart Shield Life Insurance Plans are slightly more expensive than the other term life policies on this list, with annual premiums 15.2% higher than their competitors. The company offers no limits on the maximum sum assured amount, as long as it's approved by SBI. This is extremely beneficial to those who require a high sum assured amount, those who have many beneficiaries, and those with large families. Policyholders may also choose from the following benefit riders:

  • Accidental death benefit
  • Critical illness benefit
  • Total and permanent disability benefit

One unique aspect of SBI's Smart Shield policy is the lack of a maturity age or benefit. This is beneficial to sum and a drawback for others, as there is no chance to receive a payment from outliving the policy, but there is peace of mind in knowing that your family is covered in case of death or permanent disability, regardless of your age. SBI is one of just three companies in our study to have no maturity benefit or maximum age.

SBI also uniquely offers a health benefit, a feature available through just two of the 24 insurers in our study. With the health benefit, policyholders will not only be rewarded for improving their health, but also maintaining a healthy lifestyle, healthy routines, and healthy exercise and eating habits. This is an excellent incentive not just for those who prioritize their health, but also those who have set a goal to get in better shape.

Flexible premium payments and tax benefits are also available with the Smart Shield plan, and there is also the option for consumers to buy the eShield plan, which is a term life policy that's fully online.

SBI Smart ShieldMarket Average
Annual Premium₹17,730₹15,384
Claim Settlement Rate95.0%95.8%
Minimum Entry Age1818
Maximum Entry Age6565
Maximum Maturity AgeNone80
Minimum Policy Term5 years10 years
Maximum Policy Term62 years40 years
Minimum Sum Assured₹25,00,000₹25,00,000
Maximum Sum AssuredNo LimitNo Limit
PolicyBazaar Reviews4.3 (125 reviews)4.1 (115 reviews)

Much of the features of the SBI Smart Shield plan are standard across the term life insurance landscape in India, like the minimum and maximum entry ages, the minimum and maximum sum insured amounts, and the claim settlement rate. However, they offer a maximum policy term length of 62 years, which is one of the five-longest terms offered by any insurer in our study.

SBI also offers five different premium payment modes, which - along with a few other companies - is the most in our analysis. Policyholders can make a single payment, or they can pay yearly, twice per year, monthly or quarterly. SBI does a fantastic job allowing their consumers to customize their plans to best fit their needs.

Read More: SBI Life Insurance Review

Bajaj Allianz Life Smart Protect Goal Plan

Consider this if you're seeking a plan with unique coverage options.

Bajaj Allianz has become a leader across the insurance space in India, with great car insurance, bike insurance, and health insurance policies. They also provide one of the best term life insurance policies in the country, despite annual premiums 11.2% more expensive than the market average.

The Life Smart Protect Goal Plan provides spousal coverage, which is offered by fewer than half of the insurers we studied, as well as a return of premium benefit, which is provided by just about half of the insurers in our study. Policyholders can also choose from the following benefit riders:

  • Accidental death benefit
  • Critical illness benefit
  • Total and permanent disability benefit

Among the other beneficial features of Bajaj Allianz's Life Smart Protect Goal Plan is the ability to be compensated with a lump sum or via installments in the unfortunate case of death. This plan also covers 55 terminal and critical illnesses, the longest list of any company we analysed. Joint life protection is provided for the spouse of the policyholder, and enhanced life protection is provided at certain life milestones - such as marriage or the birth of a child.

Like many Indian term insurers, Bajaj Allianz has a maturity benefit, but it's quite unique, as it's the highest age offered by any insurer in our study at 99 years old. Along with providing tax benefits and flexible premium payment schedules, Bajaj Allianz offers an automatic increase of coverage, which normally applies to the life events mentioned above. Bajaj Allianz's Life Smart Protect policy is also one of just two insurers we dissected to specifically support the needs of the policyholder's children and their education in the unfortunate case of death, a terminal illness, or permanent disability. This plan is perfectly suited for those with a growing family and those with children.

Bajaj Allianz Life Smart Protect Goal PlanMarket Average
Annual Premium₹17,115₹15,384
Claim Settlement Rate97.3%95.8%
Minimum Entry Age1818
Maximum Entry Age6565
Maximum Maturity Age9980
Minimum Policy Term5 years10 years
Maximum Policy Term67 years40 years
Minimum Sum Assured₹50,00,000₹25,00,000
Maximum Sum AssuredNo LimitNo Limit
PolicyBazaar Reviews4.3 (69 reviews)4.1 (115 reviews)

Bajaj Allianz owns a great claim settlement rate, so claims will be handled in a timely and punctual manner. They also have one of the longest maximum policy terms at 67 years, and offer certain alternative life insurance plans that have a minimum length of just one year. This flexibility makes it a popular choice among consumers who've rated them a 4.3-of-5 stars on PolicyBazaar.

Some consumers may view the Life Smart Protect plan's minimum sum insured of Rs. 50 lakhs as a drawback, since some do not require such a high level of protection or cannot budget for the high annual premium that accompanies an elevated sum assured amount. However, others may find this very beneficial, especially those with larger families or many beneficiaries.

Read More: Bajaj Allianz Life Insurance Review

FAQ

There are a few factors that contribute to the cost of a life insurance plan. Your age, gender, and overall health are the key factors, but your level of coverage needed, your occupation, and your financial budget also factor into your final cost. Many life insurers in India provide a life insurance calculator on their website so you can determine your price before beginning the process.

Everyone's needs are different, but generally, you'll want to insure yourself at 10-20x your annual income. This is designed to ensure your family is financially covered and stable in case of an untimely and unfortunate situation.

With most insurers, the policyholder will be given an option between a lump sum payout, an incremental payout, or a customized combination of the two methods. Everyone's needs are different, but it's important to evaluate which payout method works best for the needs of yourself and your family.

Life insurance is important because we can't predict the future, and it's crucial that our families and loved ones are protected in the unfortunate event of an untimely death, critical or terminal illness, or permanent disability.

Methodology

To arrive at our conclusions for the best term life insurance plans in India, we collected pricing, benefits, and inclusions data from over 500 life insurance quotes across 24 insurers.

Life Insurance Providers in ValueChampion’s Study
Aditya BirlaAegonAvivaBajaj Allianz
Bharti AxaCanara HSBCEdelweiss TokioExide
Future GeneraliHDFC LifeICICI PrudentialIDBI Federal
IndiaFirstKotakMax LifePNB Metlife
India PostPramericaReliance NipponSahara
SBIShriramStar Union Dai-ichiTata AIA

We used a 35 year-old, non-smoking male as our subject to determine premium pricing, and recorded costs without any additional benefits, features, or riders.

Mike Wagenman

Mike Wagenman is a Senior Research Analyst at ValueChampion India, specializing in insurance. He holds a Bachelor of Arts degree in Communication and Business from Rider University, and his prior work experience includes data, revenue, and business analysis in the international travel and technology markets. Mike has worked with clients around the world to help identify financial value and find the most optimal way to achieve success.