Term life insurance is one of the most essential financial tools to protect your family’s financial future. It provides a lump sum payment to the beneficiaries in case of the policyholder’s death during the policy term. Unlike other life insurance plans, term insurance offers high coverage at an affordable premium, making it a preferred choice for millions.
With so many term life insurance plans available in 2025, it can be overwhelming to select the right one. This article will guide you in choosing the best term life insurance plan, highlighting the top 10 plans in 2025 and offering insights on key factors to consider.
What is Term Life Insurance?
Term life insurance is a policy that provides financial coverage for a specified period or “term.” The nominee receives the sum assured if the insured person dies during this term. If the policyholder survives the term, there is typically only a payout if the policy includes a return of premium (ROP) feature.
Why Should You Consider Term Life Insurance?
- Financial Protection: Provides a financial safety net for your family.
- Affordable Premiums: Lower premiums compared to whole life insurance.
- Customizable Plans: Option to add riders for critical illness, disability, or accidental death benefits.
- Tax Benefits: Premiums are tax-deductible under Section 80C, and payouts are exempt under Section 10(10D) of the Income Tax Act.
How to Choose the Best Term Life Insurance Plan?
- Assess Your Financial Needs
Calculate how much your family would need if you were no longer around. Consider factors like outstanding debts, daily living expenses, education costs for children, and other long-term financial goals.
- Choose the Right Coverage Amount
Experts suggest opting for coverage 10-15 times your annual income. For instance, if you earn ₹10 lakhs annually, you should consider a coverage of ₹1 crore to ₹1.5 crore.
- Decide the Policy Tenure
Choose a term that aligns with your financial goals. Ideally, it should cover you until your financial obligations, such as home loans or children’s education, are met.
- Premium Affordability
Ensure the premium is within your budget. While it’s tempting to go for higher coverage, ensure you can afford to pay premiums consistently over the long term.
- Check Claim Settlement Ratio (CSR)
The CSR reflects the insurer’s ability to settle claims. Opt for insurers with a CSR above 95% to ensure hassle-free claim settlement.
- Look for Riders and Add-ons
Enhance your coverage with add-ons like critical illness cover, accidental death benefit, or waiver of premium rider. These riders provide additional protection.
- Insurer’s Reputation
Choose a provider known for excellent customer service, smooth claim processes, and solid financial stability.
- Read the Policy Terms Carefully
Be aware of the policy’s exclusions, waiting periods, and conditions to avoid surprises later.
- Compare Plans Online
Use online comparison tools to check features, premiums, and reviews from other policyholders.
- Seek Professional Advice
If unsure, consult a financial advisor to help choose the best policy for your financial goals.
Top 10 Best-Term Life Insurance Plans in 2025
| Insurance Provider | Plan Name | Claim Settlement Ratio (CSR) | Minimum Sum Assured | Premium (₹/year) | Max Policy Tenure | Key Benefits |
|---|---|---|---|---|---|---|
| LIC | LIC Tech Term Plan | 97.79% | ₹50 Lakhs | ₹9,000 | 40 Years | High coverage, affordable premium |
| HDFC Life | Click 2 Protect Life | 99.04% | ₹50 Lakhs | ₹8,500 | 50 Years | 3 plan variants, ROP option |
| ICICI Prudential | iProtect Smart | 98.58% | ₹50 Lakhs | ₹9,500 | 40 Years | Critical illness rider available |
| Max Life | Smart Term Plan | 99.34% | ₹25 Lakhs | ₹7,500 | 50 Years | Flexibility to increase coverage |
| SBI Life | eShield Next | 97.16% | ₹50 Lakhs | ₹8,000 | 40 Years | Critical illness & accidental rider |
| Tata AIA | Sampoorna Raksha | 98.02% | ₹25 Lakhs | ₹7,200 | 50 Years | Higher age entry up to 65 years |
| Bajaj Allianz | Smart Protect Goal | 98.48% | ₹50 Lakhs | ₹8,200 | 40 Years | Return of premium option |
| PNB MetLife | Mera Term Plan Plus | 97.44% | ₹10 Lakhs | ₹6,500 | 40 Years | Customizable policy term |
| Kotak Mahindra | Kotak e-Term Plan | 98.82% | ₹50 Lakhs | ₹7,800 | 40 Years | Lower premium for non-smokers |
| Aditya Birla | DigiShield Plan | 97.45% | ₹25 Lakhs | ₹6,800 | 40 Years | Option to increase the sum assured yearly |
LIC Tech Term Plan
- Claim Settlement Ratio (CSR): 97.79%
- Minimum Sum Assured: ₹50 Lakhs
- Premium (₹/year): ₹9,000
- Max Policy Tenure: 40 Years
- Key Benefits: High coverage, affordable premium
About the Plan:
The LIC Tech Term Plan is a pure term insurance policy offering high coverage at competitive rates. It is available exclusively online, which reduces operational costs and allows LIC to offer affordable premiums. The plan is known for its simple claim process and LIC’s strong brand trust. It also provides options between Level Sum Assured and Increasing Sum Assured.
HDFC Life Click 2 Protect Life
- Claim Settlement Ratio (CSR): 99.04%
- Minimum Sum Assured: ₹50 Lakhs
- Premium (₹/year): ₹8,500
- Max Policy Tenure: 50 Years
- Key Benefits: 3 plan variants, Return of Premium (ROP) option
About the Plan:
The HDFC Life Click 2 Protect Life Plan is one of the market’s most flexible term insurance plans. It offers three plan variants: Life, 3D Life, and Return of Premium (ROP). The ROP option allows policyholders to regain their premiums if they survive the policy term. It also includes benefits for critical illnesses and accidental death riders, providing protection.
ICICI Prudential iProtect Smart
- Claim Settlement Ratio (CSR): 98.58%
- Minimum Sum Assured: ₹50 Lakhs
- Premium (₹/year): ₹9,500
- Max Policy Tenure: 40 Years
- Key Benefits: Critical illness rider available
About the Plan:
ICICI Prudential iProtect Smart is a comprehensive term plan with in-built critical illness coverage. This makes it a popular choice among people seeking a health and life insurance combination. It also provides flexibility in premium payment terms (single, limited, or regular). The plan covers death, terminal illness, and optional riders for disability and critical illness.
Max Life Smart Term Plan
- Claim Settlement Ratio (CSR): 99.34%
- Minimum Sum Assured: ₹25 Lakhs
- Premium (₹/year): ₹7,500
- Max Policy Tenure: 50 Years
- Key Benefits: Flexibility to increase coverage
About the Plan:
Max Life Smart Term Plan provides the flexibility to increase coverage during significant life events like marriage or the birth of a child. This plan primarily benefits individuals who want to improve their insurance coverage as their financial obligations grow. It also offers a “return of premium” option and several riders, such as critical illness, disability, and accidental death benefits.
SBI Life eShield Next
- Claim Settlement Ratio (CSR): 97.16%
- Minimum Sum Assured: ₹50 Lakhs
- Premium (₹/year): ₹8,000
- Max Policy Tenure: 40 Years
- Key Benefits: Critical illness & accidental rider
About the Plan:
SBI Life eShield Next offers a unique “Increasing Cover Benefit,” where the sum assured increases by 5% or 10% annually. This plan ensures your coverage keeps pace with inflation. It also provides optional riders like Accidental Death Benefit and Critical Illness Coverage. This plan is suitable for those looking to increase coverage over time.
Tata AIA Sampoorna Raksha
- Claim Settlement Ratio (CSR): 98.02%
- Minimum Sum Assured: ₹25 Lakhs
- Premium (₹/year): ₹7,200
- Max Policy Tenure: 50 Years
- Key Benefits: Higher age entry up to 65 years
About the Plan:
Tata AIA Sampoorna Raksha is a unique term plan that allows individuals to purchase a policy up to age 65 and offers coverage until the policyholder reaches 85. This plan is ideal for individuals looking for long-term protection or those who missed buying a policy at a younger age. It provides a return-of-premium option and offers joint life coverage as well.
Bajaj Allianz Smart Protect Goal
- Claim Settlement Ratio (CSR): 98.48%
- Minimum Sum Assured: ₹50 Lakhs
- Premium (₹/year): ₹8,200
- Max Policy Tenure: 40 Years
- Key Benefits: Return of premium option
About the Plan:
Bajaj Allianz Smart Protect Goal provides a “Return of Premium” option, allowing policyholders to get their premium back if they survive the policy term. It also offers an extra cover option for children’s education, ensuring their financial future in case of an untimely demise. Its premium waiver benefit and critical illness rider make it one of the most versatile plans.
PNB MetLife Mera Term Plan Plus
- Claim Settlement Ratio (CSR): 97.44%
- Minimum Sum Assured: ₹10 Lakhs
- Premium (₹/year): ₹6,500
- Max Policy Tenure: 40 Years
- Key Benefits: Customizable policy term
About the Plan:
PNB MetLife Mera Term Plan Plus is a highly customizable plan. It allows you to choose your coverage, premium payment term, and policy tenure according to your needs. It also offers riders Critical Illness Benefits, Accidental Death Benefits, and Terminal Illness coverage. This plan is best for individuals wanting flexibility and policy control.
Kotak Mahindra Kotak e-Term Plan
- Claim Settlement Ratio (CSR): 98.82%
- Minimum Sum Assured: ₹50 Lakhs
- Premium (₹/year): ₹7,800
- Max Policy Tenure: 40 Years
- Key Benefits: Lower premium for non-smokers
About the Plan:
Kotak e-Term Plan offers lower premiums for non-smokers, making it one of the most affordable plans in the market. It provides flexibility in payout options, including lump-sum, monthly income, or a combination. The plan also offers riders for accidental death and critical illness, ensuring additional protection for policyholders.
Aditya Birla Sun Life DigiShield Plan
- Claim Settlement Ratio (CSR): 97.45%
- Minimum Sum Assured: ₹25 Lakhs
- Premium (₹/year): ₹6,800
- Max Policy Tenure: 40 Years
- Key Benefits: Option to increase the sum assured yearly
About the Plan:
The Aditya Birla Sun Life DigiShield Plan offers a unique “Step-Up Option” where policyholders can increase the sum assured yearly to keep up with inflation. The plan also allows converting the term policy into a whole life policy. It offers 8 payout options, giving policyholders complete control over how their beneficiaries receive the death benefit.
Benefits of a Term Life Insurance Plan
- Family’s Financial Security: Ensures your family is financially stable in your absence.
- Customizable Coverage: Add critical illness or accidental death cover riders.
- Low Premiums: Affordable protection compared to other insurance plans.
- Tax Benefits: Get tax deductions under Section 80C and 10(10D).
How to Apply for a Term Life Insurance Plan?
- Research and Compare: Use online comparison tools to choose the best plan.
- Calculate Your Coverage: Use insurance calculators to determine coverage needs.
- Submit Documents: Provide ID proof, address proof, income proof, and medical reports if required.
- Medical Examination: Some plans require medical checkups.
- Premium Payment: Pay the premium using multiple payment options.
- Policy Issuance: Once approved, you’ll receive the policy document via email or post.
Things to Consider Before Buying a Term Plan
- Rider Benefits: Look for riders with accidental death, critical illness, and premium waivers.
- Coverage Term: Choose a policy term for your key financial obligations.
- Sum Assured: Calculate an adequate amount for your family’s future needs.
- Insurer’s Reputation: Check CSR, claim settlement process, and customer service.
- Premium Affordability: Ensure premiums are affordable and sustainable in the long term.
Conclusion
Term life insurance is a vital financial tool that offers financial security to your loved ones. Following the steps outlined in this article, you can select the best term life insurance plan that suits your financial goals. Use comparison tools, consider key factors like CSR, and don’t forget to customize your plan with riders. You can safeguard your family’s financial future by making an informed decision.
FAQs
Q1: What is the ideal coverage amount for a term plan?
A: Financial experts recommend 10-15 times your annual income coverage.
Q2: Can I increase my sum assured during the policy term?
A: Yes, some insurers allow you to increase the sum assured at life milestones like marriage or childbirth.
Q3: Is a medical checkup mandatory for term insurance?
A: Not always. Some insurers offer plans without a medical checkup, but premiums may be higher.
Q4: What happens if I survive the term period?
A: If you opt for a “Return of Premium” plan, you get the premiums back. Otherwise, the policy expires without a payout.
Q5: How can I claim term life insurance?
A: The nominee must submit a claim form, death certificate, and policy documents to the insurer.
