Searching for the best term insurance plan or top 5 term insurance companies in India. Read the blog to get complete information on the best term insurance plan 2023 from top term insurance companies in India.
When it comes to securing your family’s financial future, term insurance is a crucial investment. It provides a safety net for your loved ones in case of an unfortunate event. But with so many insurance companies out there, how do you choose the best one? Let’s explore the top 5 term insurance companies in India and understand what makes them stand out.
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What is Term Insurance?
“Term insurance” is a type of life insurance policy that provides coverage for a specific number of years. It offers a death benefit to the beneficiary or nominee in case of the insured’s death during the policy term. The policy does not offer maturity benefits to the policyholder for surviving the policy tenure. However, you can claim a maturity benefit if you purchase a return of premium rider with your base term insurance plan. This type of insurance is a great way to secure the future financial needs of your loved ones in case of any unfortunate event.
Top 5 Term Insurance Companies in India
Here’s a list of some of the best term insurance companies in India, along with their claim settlement ratio.
| Insurance Company | Claim Settlement Ratio |
| Max Term Insurance | 99.51% |
| Aegon Term Insurance | 99.03% |
| Bharti AXA Term Insurance | 99.10% |
| Life Insurance Corporation of India (LIC) | 98.62% |
| HDFC Term Insurance | 99.39% |
While the claim settlement ratio is important, it’s not the sole factor determining whether an insurance company is the best. There are many other aspects to consider, so let’s take a closer look at the best term life insurance companies in India.
1. Max Term Insurance
Max Term Insurance Company Limited is an Indian life insurance company headquartered in New Delhi and the largest non-bank private-sector life insurer in India.
Here are some of the key points of the insurance company you need to know:
- Max Life offers a free look-up period of 15 days to its customers..
- They provide a variety of life insurance plans and policies that cater to the unique needs of insurance buyers.
- Their policies are designed to offer inclusive protection, long-term savings, and retirement solutions to the insurance seekers.
- Max Life provides various types of life insurance, such as ULIPs, money-back plans, endowment plans, and more, to ensure lifetime protection for you and your family.
- They have a term plan with a return of premium that ensures a maturity benefit upon the policyholder’s survival.
- Max Term Insurance had a solvency ratio of 2.01.
- In case of death or terminal illness claims, Max Insurance Company takes about 2-6 weeks to settle the claim, while in case of disability or partial disability claims, it may take 3-6 months.
2. Aegon Term Insurance
Aegon Term Insurance Company Limited launched its operations in India in July 2008 and has since emerged as a strong player in the insurance industry.
Here are some of the key points of the insurance company you need to know:
- Aegon Term is a digital life insurance company based in India
- They provides a wide range of life insurance policy plans to ensure lifetime protection for you and your family.
- They offer insurance seekers inclusive protection, long-term savings, and retirement solutions.
- Aegon Life Insurance had a solvency ratio of 3.33.
- In case of a claim request, if it is approved, the claim is settled within 30 days. However, if additional investigation is required, the claim process may take up to 120 days.
3. Bharti AXA Term Insurance
Bharti AXA Term Insurance is a leading life insurance company in India. It is a joint venture between the Paris-headquartered Insurance MNC (AXA Group) and the Indian conglomerate Bharti Enterprises.
Here are some of the key points of the insurance company you need to know:
- Bharti AXA Life Insurance is a company that offers various life insurance policies such as term, savings, ULIP, investment, and protection.
- They provide flexible products that allow policyholders to alter coverage limits and include riders with their insurance policy anytime.
- Bharti AXA Life Insurance had a solvency ratio of 1.78.
- In case of a claim request, after reviewing all the documents, Bharti AXA settles your claim within 5 days.
4. Life Insurance Corporation of India (LIC)
LIC Term insurance is an Indian multinational public sector life insurance company headquartered in Mumbai. LIC was established in 1956 to spread the message of life insurance in the country and to mobilise people’s savings for nation-building activities.
Here are some of the key points of the insurance company you need to know:
- LIC is the largest insurance company in India and the largest institutional investor.
- It functions as a significant term financing institution (or a capital market) in the country.
- LIC is a big investor of funds in government securities.
- The company has a claim settlement ratio of 96.69%.
- The solvency ratio of LIC is 1.768.
5. HDFC Term Insurance
HDFC Term Insurance is one of India’s leading life insurance companies, offering a range of individual and group insurance solutions that meet various needs.
Here are some of the key points of the insurance company you need to know:
- HDFC Term Insurance offers a range of insurance products that cater to the various needs of its customers.
- These products include Protection, Savings & Investments, Children’s education and marriage, Retirement, Health-related and women-specific plans.
- HDFC Term Insurance helps you become financially independent so that you can live your life on your own terms.
- The company has a strong online presence and allows customers to buy plans, track their policy, make renewal payments & monitor fund performance with the HDFC Life App.
- HDFC Term Insurance has a solvency ratio of 1.9. The company also offers a 1-day easy claim settlement guarantee.
How to Choose Term Insurance?
- Assess Your Needs: Calculate the coverage amount based on your family’s financial requirements.
- Compare Plans: Compare premiums, features, and claim settlement ratios of different insurers.
- Check Claim Settlement Ratio: Opt for companies with a high CSR for smoother claim processing.
- Read Policy Terms: Understand policy terms, exclusions, and riders.
- Customize: Choose riders like accidental death benefit or critical illness cover if needed.
Benefits of Term Insurance:
- Affordability: Term plans offer substantial coverage at low premiums.
- Financial Security: Your family receives the sum assured in case of your demise.
- Tax Benefits: Premiums paid are eligible for tax deductions under Section 80C.
What are the key features to look for in a term insurance policy?
When evaluating a term insurance policy, consider the following key features:
1. Coverage Amount (Sum Assured): Choose a coverage amount that adequately protects your family’s financial needs. It should account for outstanding loans, future expenses, and lifestyle requirements.
2. Policy Term: The policy term determines how long you’ll be covered. Opt for a term that aligns with your financial goals and family’s needs.
3. Premium Amount: Premiums should be affordable and sustainable throughout the policy duration. Compare premiums across insurers to find a balance between cost and coverage.
4. Claim Settlement Ratio (CSR): A high CSR indicates an insurer’s efficiency in settling claims. Look for companies with a good track record in this regard.
5. Riders and Add-Ons: Riders enhance your policy by providing additional benefits. Common riders include accidental death benefit, critical illness cover, and waiver of premium.
6. Renewability and Convertibility: Ensure the policy allows easy renewal and conversion to a permanent life insurance plan if needed.
7. Exclusions and Waiting Periods: Understand what situations are excluded from coverage (e.g., suicide within the first year). Be aware of waiting periods for specific illnesses.
8. Online Services and Customer Support: Check if the insurer offers online services for policy management and claims. Good customer support is essential.
9. Free Look Period: Most policies have a free look period (usually 15-30 days) during which you can cancel the policy without penalties.
10. Tax Benefits: Term insurance premiums are eligible for tax deductions under Section 80C of the Income Tax Act.
Best Term Insurance Plans 2023
Here is a table that summarizes the top 5 term insurance plans in India for 2023, along with their claim settlement ratios :
| Rank | Company Name | Claim Settlement Ratio | Entry Age | Maturity Age | Sum Assured Amount |
|---|---|---|---|---|---|
| 1 | ICICI Prudential iProtect Smart | 97.82% | 18-65 years | 99 years | 50 Lacs to 20 Cr |
| 2 | HDFC Life Click 2 Protect Super | 98.66% | 18-65 years | 85 years | 50 Lacs to 20 Cr |
| 3 | Max Life Smart Secure Plus | 99.34% | 18-60 years | 85 years | 25 Lacs to 10 Cr |
| 4 | TATA AIA SRS Vitality Protect | 98.53% | 18-60 years | 85 years | 50 Lacs to 2 Cr |
| 5 | Bajaj Allianz eTouch Lumpsum | 99.02% | 18-55 years | 99 years | 50 Lacs to 10 Cr |
You can compare more best term insurance plans. Additionally, you can use a term insurance premium calculator to determine the premium that you may have to pay against your policy.
What are some common myths or misconceptions about term insurance?
Myth 1: Term Insurance is expensive
Truth: Contrary to popular belief, term insurance is affordable and can fit within most individuals’ budgets. For instance, a 30-year-old non-smoker can get a term plan with a sum assured of ₹10 lakh for approximately less than ₹500 per month. Term insurance plans are also customizable, allowing you to choose the policy term and coverage amount that best suits your needs and budget.
Myth 2: Only young people should buy a Term Insurance Plan
Truth: Financial obligations increase with age, and so does the need for protection against unforeseen events like death or disability. If you’re in your 50s or 60s and have done well financially, it makes sense to buy a term policy now rather than later when you may be more vulnerable to risk factors such as illness or injury.
Myth 3: Only the primary breadwinner should buy a Term Plan
Truth: Even if you’re a stay-at-home parent, term insurance is relevant. It provides financial security for your family in case of your unfortunate demise. Everyone, regardless of their role, should consider term insurance.
Myth 4: Term Insurance is a waste of money
Truth: Term insurance serves a crucial purpose by providing a safety net for your loved ones. It ensures their financial stability even if you’re no longer around. It’s not a waste of money; it’s an investment in your family’s future.
Myth 5: Term Insurance does not cover accidents
Truth: Term insurance covers both natural and accidental deaths. It’s essential to read the policy terms and conditions to understand the coverage comprehensively.
Myth 6: Term Insurance is only for high-income earners
Truth: Term insurance is for everyone, regardless of income level. It’s about securing your family’s financial well-being, irrespective of your earnings.
Conclusion
Term insurance is a simple and cost-effective way to ensure your family’s financial future, even in the face of unexpected events. It provides peace of mind knowing that your loved ones will be protected from financial struggles during challenging times. By choosing the right term insurance companies and policy, you can create a strong safety net that protects your family’s well-being and ensures a legacy of financial stability.
Disclaimer: The information provided above is based on publicly available data and should not be considered as financial advice. Please consult a professional advisor before making any investment decisions.😊
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