5 Term Insurance Plans With The Best Claim Settlement Ratios In India

By Kavya Balaji | April 20, 2019

Term Insurance Plans are simple to understand but it can be difficult to pick one because there are so many to choose from.  Here we give you the top 5 Term Insurance plans.

Term Insurance Plans With The Best Claim Settlement Ratios In India

Term Insurance is an insurance policy that offers financial coverage to the insured person’s family in the unfortunate event that the insured is not around anymore. One can opt to receive a lump sum or monthly payments. Usually, the cover is offered for a specific term. This is the reason why the policy is called a Term Insurance policy.

 What do you get with a Term Insurance cover?

  • Lump sum in case of death
  • Lump sum in case of critical illness
  • Payments in case of critical illness or disability
  • Option to take additional sum assured for accidental death

What about the premium?

Yearly, half-yearly, quarterly or monthly payments are accepted. Some plans allow you to purchase the policy after making a lump-sum payment for the whole term.

What should you look at?

There are two main factors that you should consider before choosing a Term Insurance plan. They are:

Claim Settlement Ratio

Insurance is actually all about claims. Imagine a situation where your family has to run from pillar to post to get the claim amount despite giving all the documentation to the insurance company, only to find that the claim has been rejected. That’s the reason why the best insurance policy is perhaps one that is from a company that settles claims fairly and swiftly.

The Insurance Regulatory and Development Authority (IRDA)’s annual report, every year, reveals who has been settling claims in the right manner. As investor awareness has gone up, claim settlements have risen in the last couple of years. A few years ago, hardly one or two firms had claim settlements at over 90%.

Additional Reading: What Is Claim Settlement Ratio?

Top 5 insurance firms in terms of their Claim Settlement Ratio:

Firm Claims Settled
Max Life 98.26%
LIC 98.04%
Tata AIA Life 98%
ICICI Life 97.88%
HDFC Life 97.80%

*Source: IRDA’s annual report for 2017-18

Apart from this, it is important to read online reviews and ask your friends and family about their experience with the insurer. Ideally, speak to someone who has already got their claim settled.

The premium for your sum assured

Does Rs.1 crore seem like enough cover? It might. But to decide the best sum assured, you need to look at your income, the number of dependents who will suffer if you aren’t around and the number of loans on your hands. Experts believe that your life cover should be at least 20 times your annual income. So, an Rs.1 crore sum assured might be enough for a bachelor earning Rs.5 lakhs per year, with a single dependent and no loans. The sum assured will go up if you have more dependents or take on loans. Considering these factors, it is important to determine the right sum assured and check which insurer will provide the lowest premium for this amount.

If both you and your wife are working you can consider a joint cover. Also, check if the firm will provide you with riders at a low cost. This could include a critical illness rider, disability rider, hospitalisation rider and accidental death rider.

Additional Reading: 6 Tips To Reduce Your Health Insurance Premiums

Learn About Some Term Plans

Let’s assume we are looking for a term plan for a 30-year-old healthy male (non-smoker) who needs a life cover of Rs.1 crore and has a single dependent. These are the results.

  • LIC’s eTerm

LIC eTerm is an online plan offered by LIC. Premiums will be lower as no intermediaries are involved. It is a pure term plan and offers different rates for smokers and non-smokers. The minimum sum assured starts at a good Rs. 50 lakhs. The minimum entry age is 18 years and the cover will be available only till you turn 75. You will pay annual premiums for this policy. The minimum income that you need to earn, to purchase this policy, is Rs.3 lakhs.

Highlights: Once the premium is decided it will remain the same for the entire tenure of the policy.

 

LIC’s eTerm
Minimum Sum Assured Rs. 25 lakhs and Rs. 50 lakhs for non-smokers
Premium Payment Option Annual with a grace period of 30 days
Minimum Annual Premium Rs. 2,875

Under this plan, ICICI Prudential offers its buyers the following benefits.

  • Death/Terminal Illness/Disability benefit equal to a sum assured chosen by you (i.e. plain insurance cover).
  • An additional sum assured for accidental death and critical illness.
  • You can choose to receive the amount as a lump sum or monthly income
  • You can either pay the premium once or throughout the term of the policy

 Highlights: ICICI Prudential will waive the premium in case of permanent disability.

ICICI Prudential iProtect Smart

Policy Term 5-40 Years
Sum Assured Minimum subject to the minimum premium being paid, no maximum limit.
Premium Payment Option Single Pay, Regular Pay, Limited Pay.
Minimum Premium Rs. 2,400 p.a
  • HDFC Life Click2Protect Plus

HDFC Life provides four options for your life cover. They are:

  1. Life – This will give you a lump sum payout as a death benefit.
  2. Accidental Death Benefit– Under this option, you will get an additional sum assured in case of death by accident.
  3. Income – The death benefit will be paid partly as a lump sum and partly as monthly payments for 15 years.
  4. Income Plus – This is the same as the Income option but here you can choose to receive the monthly income as equal payments or increasing at 10% per annum.

HDFC Life also offers permanent disability and critical illness riders along with this policy. You can choose to have regular, limited or a single premium payment plan for your policy.

Highlights: HDFC Life allows you to increase your insurance coverage when you hit key milestones such as marriage and childbirth.

HDFC Life Click2Protect Plus
Policy Term 40 Years (max)
Premium Payment Option Annual/Half-yearly/Quarterly/Monthly
Minimum Annual Premium Rs.3,000
Minimum Sum Assured Rs. 25 lakhs
Online Discount 5.5% on premium
  • SBI Life Smart Shield

SBI Life – Smart Shield is a term plan offering several riders. These include Accidental Death Benefit Rider, Accidental Total and Permanent Disability Benefit Rider and Accelerated Critical Illness cover option. The sum assured needs to be in multiples of Rs. 25 lakhs. You have the option of paying the premium once or regularly throughout the policy term.

Highlights: SBI Life offers you changing sum assured plans. You can choose to have an increasing sum assured. This will help you in case you are planning to get married and have children. You can also opt for a decreasing sum assured. This is ideal for those who might want to take on loans, such as a Home Loan, and might not be able to pay high premiums.

Additional Reading: Do You Know How Much Life Insurance You Need?
SBI Life
Policy Term 30 Years (max)
Premium Payment Option Annual/Half-yearly/Quarterly/Monthly
Single premium Rs. 15,000
Regular Premium Yearly Rs. 5,000
  • Max Life Online Term Plan

Under the Max Life Online Term Plan, you have the choice of adding a Max Life Comprehensive Accident Benefit rider. However, for this policy, the premium can be paid only annually.

Highlights: This plan offers two options along with the basic cover. One is the Life Cover Plus Monthly Income option. Here, 100% of the sum assured will be paid as a lump sum, plus a monthly income of equal amounts will be paid out for 10 years. Max Life says they will pay 0.4% of the Sum Assured as monthly income. Another option is the Life Cover Plus Increasing Monthly Income. Here, you get 100% of the policy Sum Assured, plus an increasing monthly income for 10 years. The monthly income will increase every year by 10% per annum (simple interest) of the monthly income you receive in the first year.

Max Life
Policy Term 35 Years (max)
Premium Payment Option Annual
Minimum Annual Premium As per the minimum sum assured chosen
Minimum sum assured Rs.25,000

Learn more about the right Term Plan based on your needs and financial situation.

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.

7 thoughts on “5 Term Insurance Plans With The Best Claim Settlement Ratios In India

  1. Avatarvaibhav jain

    Hi Mam

    Nice information you shared.. Thanks ..

    I just Purchased KOTAK term plan for 30 years.. They have dispatched policy without any medical examination.. i am very confused that should i accept it or cancel it.. I discussed with MAX also but they are are not committing also regarding medical examination..
    Please advise,

    Best Regards
    Vaibhav

    Reply
    1. AvatarTeam BankBazaar

      Hi Vaibhav,

      Some policies require a medical examination while others don’t. Please check the terms of the policy to know more.

      Cheers,
      Team BankBazaar

      Reply
    2. AvatarPardee

      No need to cancel it’s company policy at what age or what amount they ask for medical
      So keep continue if any query call me 8920355603

      Reply
  2. AvatarPooja

    An online term insurance plan with return of premium
    To ensure that our loved ones are never wanting in terms of financial resources to live the life of their dreams, protect their standard of living as well as ensure that any unfortunate event does not place on their shoulders the burden of our debts & loans. An online term insurance plan(Life Insurance Protection Plan) is a plan that is the ideal solution to provide a strong ‘foundation’ to protect the income of our loved ones.

    Reply
    1. AvatarTeam BankBazaar

      Hi Pooja,

      That’s very true. If you’d like to learn more about Term Life Insurance, click here.
      Cheers,
      Team BankBazaar

      Reply
  3. AvatarJeetu gupta

    If you have senior citizen parents you should select from the online health insurance plans to cover your your family.Best health insurance policy in india that gives you cashless service covers your pre and post hospitalization charge and lets you breath and live tension free. Best health insurance plans for family and protect the health of yourself, your family and loved . because in the times of troubles only a secured health can help you.it always give cashless faclity etc. policy21st pay easy claims without much documentation.

    Reply
    1. AvatarTeam BankBazaar

      Hi Jeetu gupta,

      Thanks for writing in. Have a nice day!

      Cheers,
      Team BankBazaar

      Reply

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