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What are the Best Term Insurance Plans and Coverage Required in India?

Check out the best term insurance plans with coverage

A qualified financial advisor will always explain the necessity of life and health insurance as part of financial planning. This is due to the fact that if an individual becomes ill or is involved in an accident and incurs large medical expenditures, all investments may be lost and he may even go into debt. In addition, if a family member dies unexpectedly, the entire family may experience severe financial hardship.

Term insurance is a form of life insurance that covers a person's life for a certain duration of time. It is the most basic and simplest type of life insurance through which, the nominees receive a pre-determined death benefit in case of the insured’s untimely death within the policy period. The fundamental goal of term insurance is to offer financial stability to the insured's family in the event of an income loss caused by the insured's illness or death

Term insurance is required based on the family's financial objectives, obligations, financial dependents, and liabilities such as loans. The following factors are taken into account when purchasing term insurance :

1. Claim Settlement Ratio of the Insurer

This ratio indicates the percentage of claims settled in relation to the total number of claims submitted in the year. The greater the ratio, the easier it will be for your dependents to claim the insurance and live well in your absence.

Term life insurance is designed to protect the future of your dependents. The greater the claim settlement ratio, the more likely it is that your family's future will be secure.

2. Solvency Ratio

The solvency ratio indicates if the insurance you select will be financially capable of fulfilling your claim if the need arises. The solvency margin compares the liabilities of a company against its current assets According to the Insurance Regulatory and Development Authority of India (IRDAI), every life insurer must have a solvency ratio of at least 1.5.

3. Critical Illness Coverage

A term insurance policy protects your family's financial future in the event of a catastrophic occurrence. However, the loss of a key earning member is not the only time a family's financial security is jeopardised. Critical illnesses, such as cancer or brain surgery, may be extremely expensive, crippling the family's resources. Critical illness plans that pay the insurance amount as soon as the diagnosis is made must be filed.

The critical illness cover amount assists in covering the high expense of treatment and ensuring your family has enough money to live their normal day-to-day existence. Premiums paid for critical sickness insurance are also under section 80c. However, tax benefits are subject to change in tax laws.

How much term insurance do I need?

Now that you’ve understood how to choose the best term plan, you’re naturally thinking “how much term insurance do I need?” This depends on a number of factors like -


The first thing to consider while answering the question of how much term insurance do I need, is the debt you’re under. life insurance can be used to pay off existing obligations such as college loans, auto loans, mortgages, credit cards, and personal loans. If you have any of these debts, your policy should cover them in full.

Replacing Income

The answer to “how much term insurance do I need” can also be determined by analysing your annual income. The ability to replace income is one of the most important aspects of life insurance. If you are the sole provider for your dependents and earn INR 12 Lakhs per year, for example, you will need a policy payment high enough to replace your income plus a little extra to protect against inflation.

In conclusion

Hope this article answered your question of “how much term insurance do I need.” If you require life insurance, you must first determine how much and what type you require. Most individuals can get by with renewable term insurance, but you should consider your specific situation. If you opt to get insurance through an agent, make a list of what you'll need ahead of time to prevent being trapped with insufficient or overpriced coverage that you don't need. As with investing, educating oneself is critical to make the best decision. So do your homework to guarantee that you get the finest life insurance available.


*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.

Suggested Plans

Bharti AXA Life Flexi Term Pro

  • A Non-linked, Individual, Non-participating Pure Risk Premium Life Insurance policy
  • The plan offers two options: Without Return of Premium and With Return of Premium
  • Under the Without Return of Premium variant, you have the option between Single Life cover or Joint Life Cover i.e., cover for your spouse under the same policy.
  • Flexibility in policy and premium payment terms

Bharti AXA Life Saral Jeevan Bima Plan

  • Non-Linked Non-Participating term insurance plan
  • Double the sum Assured on death due to Accident
  • Flexibility to choose a policy term
  • No medical examinations• Ease of purchase as no lengthy underwriting procedures are involved.
  • Tax benefits