Buying term insurance in India is one of the smartest financial decisions you can make. It provides financial security to your family in case of an unfortunate event. With rising living costs and uncertainties, having a term plan is no longer optional—it’s a necessity.
But how do you choose the right term insurance plan in 2025? With so many insurers and policies available, the process can be confusing. This guide will walk you through everything—from understanding term insurance to comparing policies and making the right purchase.
What is Term Insurance?
Term insurance is a pure life cover that pays a lump sum to your nominee if you pass away during the policy term. Unlike other insurance plans, it does not offer maturity benefits. However, it provides high coverage at very low premiums, making it ideal for income-earning individuals.
Key Features of Term Insurance (2025 Updates)
- Affordable Premiums: Term plans offer the highest coverage at the lowest cost.
- Flexible Tenure: Choose a policy term from 5 years up to 40 years.
- Riders Available: Add-ons like critical illness, accidental death, and disability riders enhance coverage.
- Tax Benefits: Premiums paid qualify for tax deductions under Section 80C, and the death benefit is tax-free under Section 10(10D).
Step-by-Step Guide to Buying Term Insurance in India (2025)
Step 1: Assess Your Insurance Needs
Before buying, calculate how much coverage you need. A simple rule is:
Coverage = 10-15 times your annual income + liabilities (loans, etc.)
For example, if you earn ₹10 lakh/year and have a home loan of ₹50 lakh, your ideal coverage should be around ₹1.5-2 crore.
Step 2: Choose the Right Policy Term
Your policy term should cover your working years. If you are 30 years old, a 30-35 year term ensures protection until retirement.
Step 3: Compare Term Insurance Plans Online
Use comparison websites like Policybazaar, Coverfox, or Insurancedekho to check:
- Sum assured (Coverage amount)
- Premium rates
- Claim settlement ratio (Higher is better)
- Riders available
Step 4: Check Insurer’s Claim Settlement Ratio (CSR)
A high CSR (above 95%) means the insurer settles most claims without disputes. Check IRDAI’s latest report for updated CSR in 2025.
Step 5: Calculate Premium Using a Term Insurance Calculator
Most insurers provide online calculators. Enter:
- Age
- Sum assured
- Policy term
- Smoking habits
- Riders (if any)
This gives an estimate of your yearly premium.
Step 6: Disclose Medical History Honestly
Hiding health conditions can lead to claim rejection. Undergo medical tests if required.
Step 7: Choose Between Online & Offline Purchase
- Online: Cheaper, instant policy issuance.
- Offline: Agent assistance, but higher premiums.
Step 8: Fill the Application & Submit Documents
Documents needed:
- Identity proof (Aadhaar, PAN)
- Address proof
- Income proof (Salary slips/ITR)
- Medical reports (if applicable)
Step 9: Pay Premium & Receive Policy Document
Once approved, pay the premium online/offline. You’ll receive the policy document via email.
Top 5 Term Insurance Plans in India (2025)
| Insurer | Plan Name | Key Features |
|---|---|---|
| LIC | Tech Term Plan | High trust, good CSR |
| HDFC Life | Click 2 Protect Life | Affordable, multiple riders |
| ICICI Pru | iProtect Smart | Customizable cover |
| SBI Life | eShield | Low-cost, high coverage |
| Max Life | Smart Secure Plus | High CSR, good add-ons |
FAQs on Buying Term Insurance in India (2025)
1. What is the best age to buy term insurance?
The ideal age is 25-35 years because premiums are lower, and you get long-term coverage.
2. Can I increase my coverage later?
Yes, some insurers allow increasing sum assured at life events (marriage, child’s birth).
3. Does term insurance cover natural death?
Yes, term plans cover all types of death (natural/accidental) unless excluded (suicide in first year).
4. What happens if I stop paying premiums?
If you miss premiums, the policy may lapse. Some insurers offer a grace period (15-30 days).
5. Can I get a term plan without medical tests?
Yes, but only for low coverage (up to ₹50 lakh). Higher amounts require medical checks.
6. Is online term insurance safe?
Yes, IRDAI-registered insurers are safe. Always buy from the insurer’s official website.
7. How do I make a claim?
Nominees must submit:
- Death certificate
- Policy document
- Claim form
- KYC documents
Final Tips Before Buying Term Insurance (2025)
✔ Don’t delay – Premiums increase with age.
✔ Compare at least 3-4 policies before deciding.
✔ Read policy wordings – Check exclusions.
✔ Update nominees – Ensure they know about the policy.
Conclusion
Buying term insurance in India is simple if you follow the right steps. Focus on adequate coverage, affordability, and claim settlement reputation. Start early, compare policies, and secure your family’s future today.