Best Term Insurance Plans In 2021 – Top Term Plans In India

By | October 5, 2021

Best Term Insurance Plans In 2021 – Top Term Plans In India | One of the first steps in financial planning is to purchase life insurance in the name of the family’s earning member. However, we witness a lot of mis-selling of ULIPs, investment products, and other similar products under the guise of being one of the finest life insurance plans in India. Consider a low-cost term insurance plan if you wish to protect your family’s future even if you are not present. What is the best way to choose the finest term insurance policy in India?

Which are the Best Term Insurance Plans you can consider in 2021? What are the Top Term Plans in 2021 that have the highest claim settlement ratio (CSR)?

 

What is Term Plan and what are its benefits?

If you’re already familiar with the term plan concept, you may skip this part.

The insured person’s risk is covered by a term plan. The nominee would receive the sum assured in the event of the life insured’s untimely death. There is no maturity amount for this plan because it is a simple risk coverage plan.

How we have chosen the Best Term Insurance Policy in 2021

Let me list you few features which we considered in picking-up a best term insurance policy.

1) High Claim Settlement Ratio (CSR)

One of the elements we looked at while choosing a term insurance plan was the claim settlement ratio. While not the only criterion, it is one of the most significant when considering a term plan.

In simple words, CSR refers to the percentage of total claims processed by an insurance business. If an insurance business receives 100 claims but only accepts 95 while rejecting 5, the CSR is 95 percent (95/100 x 100). The higher the claim settlement ratio, the less likely it is that your family’s claim would be denied in the future.

We’ve sorted out insurance firms with a high claim settlement ratio of over 95%, as reported by the IRDA in Dec-2019.

2) How good is the insurance company:

This is a challenging parameter. How can you tell if an insurance business is reputable or not? We are more aware of its existence, as well as the company’s positives and negatives. As a result, we’ve eliminated companies with less than a 5-year track record.

3) Unique or Useful features of term insurance plan:

Can you get a low-cost term plan with no useful features? That is not an option that anyone would choose. I’ve filtered Term insurance plans that include both fundamental and unique features that would be beneficial to people who are considering purchasing insurance.

4) Term Plans with Low Premium:

While price is not the only factor to consider when choosing a life insurance plan, we have given preference to term plans with unique features and affordable rates.

 

Best Term Insurance Plans in 2021 | Top Term Plans in India for 2021

Here are the list of the good term plans in India.

  1. HDFC Click 2 Protect Plus Term Insurance Plan
  2. Max Life Term Insurance Plan Plus
  3. ICICI iProtect Smart Term Insurance Plan
  4. LIC Term Insurance Plan
  5. Aegon Life iTerm Insurance Plan

Note: The claim settlement ratio for Tata AIA Insurance is 99.06 percent, which has remained consistently high in recent years. Tata AIA, on the other hand, has taken the online plan from their website. This means that you won’t be able to buy anything on the internet. I personally contacted them and inquired about them several times. We did not include Tata Term Insurance in this list due to a lack of feedback and its lack of availability online. However, for the convenience of our readers, we will cover its offline term strategy next week.

 

Best Term Insurance Plans in 2021 | Top Term Plans in India

Now let us get into the details of these term insurance plans.

#1 – HDFC Click 2 Protect 3D Plus Term Insurance Plan

Here are the key features of HDFC Click 2 Protect Plus Term plan.

  • Minimum Entry age is 18 Years and Maximum entry age is 65 years
  • Maximum maturity age is 85 Years.
  • Policy tenure is between 5 years and 40 years.
  • The minimum basic sum assured is Rs 10,000.
  • Maximum Sum Assured – No limit.

There are 9 different options like Life Option, 3D Life Option, Extra Life Option, Income Option, Extra Life Income Option, Income replacement option, Life Long Protection Option, 3D Life long protection, Return of Premium Option in this plan.

The claim settlement ratio for FY 2019-20 (latest one that is announced in Feb-2021) is 99.07%.

Basic Premium is approx. Rs 9,717 (Incl taxes) per annum for a 30 year non smoker for a 30 year policy for Rs 1 Crore sum assured (Life option).

On Accidental Total Permanent Disability (eligible under all plans) and the diagnosis of a Critical Illness, all future insurance premiums are waived (available under 3D Life & 3D Life Long Protection options).

The Life Stage Protection function allows you to enhance your insurance coverage without having to go through a medical exam. Top-up option allows you to enhance your coverage every year.

Females receive discounted premium rates. Non-tobacco users pay lower premiums.

This HDFC Click 2 Protect 3D Plus Term plan has several options and riders that make this as a unique term insurance plan for 2021.

 

#2 – Max Life Term Insurance Plan Plus

Below are the major features of this term insurance plan from Max Life.

  • Minimum Entry age is 18 Years and Maximum entry age is 60 years
  • Maximum maturity age is 85 Years.
  • Policy tenure is between 10 years and 50 years.
  • Minimum Sum Assured is Rs 25 Lakhs.
  • Maximum Sum Assured – Rs 100 Crores.

The premium payment mode can be monthly, quarterly, half yearly and annually.

Limited Premium payment option available where you can pay the premium for a limited period, however, enjoys term insurance plan for the entire tenure of the plan. You can save up to 30% of premiums of you opt for this.

This plan is available in 3 variants a) Basic Life Cover b) Basic Life Cover + Monthly cover c) Basic Term Plan Cover + Increasing Monthly Income.

Option to add benefits like as accidental death and dismemberment, premium waiver, and critical sickness protection (for a fee).

Females receive discounted premium rates.

The claim settlement ratio for FY2019-20 (the most recent one, reported in February 2021) is 99.22%, the highest among all insurance companies.

For a 30 year non smoker for a 30 year policy with a 1 Crore sum assured for basic life insurance, the basic premium is around Rs 13,216 per annum (incl taxes). The premium would be higher if you chose the other two options.

The Max Life Term Insurance plan, which has a good claim settlement percentage and a reasonable premium, is one of the top term insurance plans for 2021.

 

#3 – ICICI iProtect Smart Term Plan

Here are the key features of ICICI iProtect Smart Term Plan.

  • Minimum Entry age is 18 Years and Maximum entry age is 65 years
  • Maximum maturity age is 99 Years.
  • Policy tenure is between 5 years and 81 years (you an buy at age of 18 and extend up to 99 years for almost 81 years of tenure)
  • Minimum Sum Assured – Based on minimum premium of Rs 2,400 per annum.
  • Maximum Sum Assured – No limit.

There is an optional rider that pays if one of the 34 Critical Illnesses is diagnosed.

Coverage for life in the event of a terminal illness.

Accidental death benefit rider is provided as an option.

It has four layers of protection. 1) Existence 2) Plus (Life) 3) Life and Health, and 4) Everything in One

The claim settlement ratio for FY2019-20 (the most recent one released in February 2021) is 97.84 percent.

For a 30-year non-smoker, the premium is around Rs 8,279 per year for a 30-year insurance with a Rs 1 Crore sum assured. The accident death insurance would be an extra fee.

I believe the ICICI iProtect Term plan is one of the best online term insurance plans because it includes various essential perks and riders.

 

#4 – LIC Tech Term Insurance Plan No. 854

LIC is trusted brand in the insurance segment in India that has been catering to insurance for several decades. LIC has launched two term plans in Sep-2019. Among this, LIC Tech Term Insurance Plan is a comprehensive plan. This is online plan and no intermediaries will be involved.

Here are the key features of the LIC Tech Term Insurance Plan.

  • Minimum Entry age is 18 Years and Maximum entry age is 65 years
  • Maximum maturity age is 80 Years.
  • Policy tenure is between 10 years and 40 years.
  • Minimum Sum Assured is Rs 50 Lakhs.
  • Maximum Sum Assured – No limit.

Optional accidental death benefit rider available in this plan.

Differential premium rates for Smoker/Non-Smoker lives.

Proposal on own life ONLY will be considered.

The claim settlement ratio for FY2019-20 (latest one that is announced in Feb-2021) is 96.69%.

Flexible premium payment options (single and regular premiums).

The premium for a 30 year non-smoker for a 20 year insurance with a Rs 1 Crore sum promised after online rebate is around Rs 7,216 per annum (excl taxes). Note that the premium is for a 20-year policy, but other plans are compared to 30-year policies, therefore the premium appears to be cheaper presently.

LIC Tech Term Insurance Plan is one of the Best and Top Online Term Insurance Plans in 2021 since it has a strong brand and is trusted by millions of Indians. Here is a 360-degree picture of the LIC Term Plan.

 

#5 – Aegon Life iTerm Insurance Plan

Here are the key features of the Aegon Life Online Term insurance plan.

  • Minimum Entry age is 18 Years and Maximum entry age is 65 years.
  • Maximum maturity age is 75 Years.
  • Policy tenure is between 10 years and 40 years.
  • Minimum Sum Assured is Rs 10 Lakhs.
  • Maximum Sum Assured – No limit.

Accidental death benefit rider built-in.

There are two types of death benefits available. 1) A one-time lump sum payment 2) A lump sum payment of 50% and 3% of the total assured per month for the next 5 years.

Premium rates for smokers and non-smokers are different.

The claim settlement ratio for FY2019-20 (the most recent one, released in February 2021) is 98.01 percent.

The premium for a 30-year non-smoker for a 30-year insurance with a Rs 1 Crore sum guaranteed is around Rs 7,087 per annum (excl taxes).

In 2021, the Aegon Life iTerm Insurance Plan is one of the best and most affordable online term insurance plans.

 

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