Term insurance, a sub-type of life insurance, offers coverage to the policy buyer for a specific policy tenure, usually ranging from 5 years to 40 years. Term insurance plans have become an extremely popular choice for policy buyers these days due to their affordable pricing. A key reason for this is that term insurance policies do not acquire a cash value unlike other life insurance products.
Thus, a term insurance policy provides a risk cover against death on the life of the policyholder. If the policyholder meets with an untimely death during the policy tenure, a death benefit will be paid out to the nominee. However, unless the policy buyer has opted for a TROP (Term Insurance with Return of Premium) plan, no maturity benefit will be paid by the insurer. Similarly, term insurance policies also do not offer survival benefits.
That being said, if you are looking for a pure protection-oriented cover, a term insurance policy is your best bet. Listed below are five term insurance policies that are offered by life insurance providers with the highest claim settlement ratios in FY16-17.
1. LIC’s Amulya Jeevan II Plan: The Amulya Jeevan II Plan from LIC is an insurance policy that provides comprehensive coverage to the policyholder at an affordable price. Under this policy, if the policyholder passes away while the policy is still active, a death benefit will be paid to the nominee. No maturity benefit is payable as per this policy.
Features of LIC’s Amulya Jeevan II Plan
- The minimum sum assured that a policy buyer is required to opt for when purchasing this policy is Rs.25 lakh.
- There is no limit to the maximum sum assured that can be opted for. However, it will have to be as per the insurer’s underwriting norms.
- A policy buyer will have to be between the ages of 18 years and 60 years to purchase this policy. A policyholder can avail coverage up to the age of 70 years.
- One can opt for a policy tenure between 5 years and 35 years when purchasing this policy.
- Individuals who wish to purchase this policy will need to pay their due premiums on an annual or bi-annual basis.
- The grace period to pay premiums is 30 days.
- Lapsed insurance policies can be revived within a period of 2 years since the date of the first unpaid premium.
- A free-look period of 15 days is provided to policy buyers.
2. Max Life Super Term Plan: The Super Term Plan from Max Life Insurance is a non-participating, non-linked, term insurance policy. The unique benefit of this policy is that policy buyers can choose between two sum assured options – Level Sum Assured and Increasing Sum Assured. Under the Increasing Sum Assured option, the sum assured that you opt for at the time of purchasing this policy will increase by 5% every policy year till the completion of the policy term, without you having to pay an additional premium. Listed below are the key features of this policy.
Features of Max Life Super Term Plan
- Policy buyers have the freedom to choose a benefit payout as per their needs.
- Prospective customers will have to choose a policy tenure between 10 years and 35 years at the time of purchasing this policy.
- Individuals who purchase this policy need to be between 18 years and 65 years of age.
- The coverage offered by this policy can be availed by a policyholder up to 75 years of age.
- Policyholders will need to pay their premiums on a yearly, bi-yearly, quarterly, or monthly basis.
- The minimum premium payable as per this policy is Rs.5,000 p.a.
- The minimum sum assured that one must choose when purchasing this policy is Rs.25 lakh.
- Policy buyers can also purchase insurance riders along with this policy.
3. HDFC Life Click 2 Protect 3D Plus Plan: The Click 2 Protect 3D Plus Plan is an online, non-participating, non-linked, term insurance policy that offers comprehensive protection to the policy buyer at an affordable cost. The unique benefit of this policy is that it comes with 9 plan options. Thus, policy buyers can choose a particular plan option as per their needs. The features of the Click 2 Protect 3D Plus Plan are listed below:
Features of HDFC Life Click 2 Protect 3D Plus Plan
- Under the Life Stage Protection feature, policyholders will be given the option to increase their sum assured during key milestones in their lives, without having to go through a medical screening.
- Preferential premium rates are offered to women and non-tobacco users.
- The maximum age at entry for this plan is 65 years of age.
- Customers purchasing this policy can opt for a policy term between 5 years and 40 years. However, this is not applicable to the Life Long Protection Option and the 3D Life Long Protection Option since they are whole life variants.
- The minimum sum assured that one must opt when purchasing this policy is Rs.10 lakh.
4. Aegon Life iTerm Insurance Plan: The iTerm Insurance Plan offered by Aegon Life Insurance is an online term insurance policy that is extremely cost effective. In the event of the policyholder’s untimely death, the insurer will pay a lump sum amount to the nominee. Further, the nominee will also receive a guaranteed monthly benefit for a total of 100 months.
Features of Aegon Life iTerm Insurance Plan
- In order to purchase this policy, a prospective policy buyer needs to be between 18 years and 65 years of age.
- This policy provides coverage up to 100 years of age.
- When purchasing this policy, you can either opt for a policy tenure between 5 years and 62 years or you can opt for coverage up to the age of 100 years.
- Premiums towards this policy can be paid as a one-time lump sum amount or throughout the policy tenure.
- Individuals who purchase this policy will need to opt for a minimum sum assured of Rs.25 lakh.
- Premiums towards this policy can be paid as a one-time amount or on an annual, bi-annual, or monthly basis.
5. SBI Life – Poorna Suraksha Plan: Poorna Suraksha Plan from SBI Life Insurance provides comprehensive coverage against both death and critical illnesses. Thus, policy buyers can avail coverage against around 36 critical illnesses. The benefits and features of this policy are listed below.
Features of SBI Life – Poorna Suraksha Plan
- In order to purchase this policy, individuals must be between 18 years and 65 years.
- The maximum age at maturity for this policy is 75 years.
- The minimum and maximum sum assured for this policy are Rs.20 lakh and Rs.2.5 crore, respectively.
- Individuals can opt for a policy tenure of 10 years, 15 years, 20 years, 25 years, or 30 years,
- Premiums for this policy will have to be paid on an annual, bi-annual, or monthly basis.
- The minimum premium amounts payable for this policy are Rs.3,000 for the annual mode, Rs.1,500 for the half-yearly mode, and Rs.250 for the monthly mode.
A term insurance policy is a smart choice if you want your dependents to be financially secure, regardless of what may happen in the future. Make sure to do your due research, compare various policies, and opt for a policy that is best suited to your needs.