Last Updated on Apr 26, 2023 by
Though we hope for the best, it is always ideal to be prepared for any situation in life, especially the ones concerning your financial situation. One way you can be protected financially is through insurance. Right from health insurance to travel insurance, there are different types of insurance policies available, and the most popular one is life insurance. In this article, let’s learn about the best life insurance policy in India, along with its types, features, benefits and how to choose the right one.
Table of Contents
What is life insurance?
In life insurance, the policyholder must pay a premium to the insurance company. In return, the insurance company will pay the policyholder’s family a sum of money in the case of the policyholder’s death. Simply put, a life insurance policy financially safeguards your family during unforeseen circumstances.
Best life insurance policies in India
Here’s a list of the 10 best life insurance plans in India.
| Insurance Plan | Age limit | Minimum policy term ( in yrs) | Maximum policy term | Sum assured | Claim settlement ratio (in %) |
| ICICI iProtect Smart | 18-99 | 5 | Whole life | Rs. 50 lakh – 10 cr. | 97.82 |
| HDFC Click 2 Protect Super | 18-65 | 5 | 85 minus entry age | Rs. 50 lakh – 20 cr. | 98.66 |
| Max Life Smart Secure Plus | 18-65 | 10 | 67 yrs | Rs. 20 lakh/ No Limit | 99.34 |
| TATA AIA Sampoorna Raksha Supreme | 18-60 | 10 | 67 yrs | Rs. 50 lakh/ 20 cr. | 98.02 |
| Bajaj Smart Protect Goal | 18-65 | 5 | 40 yrs | Rs. 50 lakh – No limit | 99.02 |
| PNB MetLife Mera Term Plan Plus | 18-60 | 10 | 40 yrs | Rs. 25 lakh – No limit | 97.33 |
| Kotak Life e-Term Plan | 18-65 | 10 | 40 yrs | Rs. 25 lakh – No limit | 98.5 |
| Edelweiss Tokio life Total Protect Plus | 18-55 | 10 | 100 minus entry age | Rs. 25 lakh – No limit | 98.09 |
| IndiaFirst e-term Plus Plan | 18-65 | 5 | 40 yrs | Rs. 50 lakh – No limit | 96.92 |
| Birla DigiShield Plan | 18-65 | 5 | 55 yrs | Rs. 30 lakh – No limit | 98.07 |
Note: The life insurance plans listed here are not sorted in any particular order.
Different types of life insurance policies
Here’s the list of the most common life insurance policies available in India
| Types of life insurance policies | Purpose |
| Term life insurance policy | Long-term financial protection for family |
| Endowment life insurance policy | Provides assured sum during maturity |
| Whole life insurance | Provides life cover till the policyholder is 99 yrs or the entire life |
| Unit Linked Insurance Plan (ULIP) | It is a mix of insurance and market-linked investment options |
| Retirement plan | Helps in building a retirement corpus |
| Child insurance plan | Insurance coverage along with an investment for the child’s higher education or marriage purpose |
Benefits of life insurance
Here are a few benefits of holding a life insurance policy.
- Financial security: The key benefit of a life insurance policy is the financial security it offers during unforeseen circumstances like permanent or temporary disability or death.
- Retirement planning: The sum assured in the life insurance can be used for expenses post-retirement.
- Savings: Along with providing financial security, it induces a habit of savings, which can be used during uncertain situations.
- Tax benefit: As per Budget 2023, maturity proceeds from life insurance (except ULIP) with an annual premium less Rs. 5 lakh and issued before 1st April 2023 are exempted from tax.
- Loan: A few life insurance policies can be used as collateral to get a loan.
How to pick the best life insurance policy?
Well, there are various life insurance plans available in the market, and it is important to choose the right one that suits your goal. Here are some tips to help you pick the best life insurance policy.
- First, understand the purpose of the insurance and find the different policies from different providers.
- Compare the sum assured amount of these policies according to the premium payment.
- Check the claim settlement ratio of the policy.
- Read and understand the inclusions and exclusions of the policy.
- Read the terms and conditions of the policy.
- Once you understand the policy, pick the one that benefits you.
What determines your life insurance premium?
The life insurance premium you pay is not the same for everyone. Here are the factors determining your life insurance premium amount:
- Age: The primary factor considered while determining the life insurance premium is age. A young age policyholder is considered less risky than an old age person. This makes young individuals get their policies for low premium rates compared to an aged person.
- Policyholder’s lifestyle: If the applicant comes under high-risk lifestyle factors like smoking or drinking alcohol, the insurance premium is higher than those not exposed to these habits.
- Medical history: The medical history of the insurance applicant is also an important factor. If the person is prone to any health issues, the premium charged is high.
- Add-ons: If your insurance policy includes any add-ons like accident benefits, critical illness benefits, etc., it will impact your premium.
- Employment: Insurance companies also consider your place of employment while determining the premium. If you work in a place like a chemical factory, etc., you are considered a bit risky.
- Gender: A few insurance companies also consider gender, where women pay less premium than men.
Conclusion
Life insurance is an important financial tool that helps you and your family in times of financial difficulties. Understand the working of life insurance and its benefits before purchasing the best policy that suits you. Overall, compare different life insurance policies and pick the right one.
FAQs
What are the documents required while purchasing a life insurance policy?
The documents required to buy a life insurance policy in India are,
– Age proof (Driver’s licence, Aadhaar card, Voter ID or Birth Certificate)
– Address proof (Electricity bill, telephone bill)
– Income proof
How to buy a life insurance policy in India?
Once you have picked the best life insurance policy that suits your requirements, you can visit their website to purchase the policy. After you fill out the form and submit the required documents, the insurance company will review your profile and process it further. Ensure to read the terms and conditions before making the purchase.
Can we get a loan against a life insurance policy?
A loan against a life insurance policy depends on the insurance company, as not every insurance company allows you to use the policy against the loan. Talk to your insurance company representative.
How to claim a life insurance policy?
Claiming a life insurance policy involves a few steps: First, inform the insurance company immediately after the demise of the policyholder and submit the required documents. The company will review the documents, verify the assignee and process the claim application.
What is the difference between term life insurance and whole life insurance?
As the name suggests, whole life insurance is insurance that has a tenure of whole life, that is, till the demise of the policyholder. On the other hand, term life insurance has a term set while purchasing the policy.
As an insatiable reader and learner, I’ve spent the last two years exploring the world of finance. With my creative mind and curious spirit, I love making complex finance topics easy and fun for everyone to understand. Join me on my journey as we navigate the world of finance together!
