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How to compare term insurance before you buy
A beginner’s checklist for a pure term plan in India. Cover, term, premium, claim record, and the pitches to walk away from.
The short version
Buy pure term insurance only if someone currently depends on your paycheck. Pick a sum assured of 15× annual income until age 60, and never buy a plan that promises money back.
Which scenario fits you best?
Pick your situationSole Earning Family Member
Parents, siblings, or spouse rely on your monthly salary for living expenses or loans.
A reasonable fit
Pure term plan with 15× to 20× annual income cover up to age 60.
Early Career Professional
In your early 20s in good health and want to lock in ultra-low lifetime premium.
A reasonable fit
Pure term plan early (₹6,000–₹9,000/yr for ₹1 Crore cover).
No Financial Dependents
Parents are financially independent, no loans, no dependents.
A reasonable fit
Skip term insurance! Put the same money into health cover & your emergency fund.
Key Decision Criteria
What matters vs what you can ignore
| Feature / Metric | Beginner Benchmark | Why It Matters |
|---|---|---|
Sum Assured (Life Cover) | 15× Annual Income | e.g. ₹6L salary = ₹1 Crore cover. Don't subtract temporary employer cover. |
Policy Term (Duration) | Up to Age 60 | Avoid whole-life (up to 85-100 yrs). When you retire, dependents are grown. |
Claim Settlement Ratio (CSR) | Above 98% | Check IRDAI annual report for both number of claims and amount settled. |
Critical Illness Rider | Optional | Good if affordable, but a comprehensive health insurance super top-up is better. |
Return of Premium (TROP) | Strictly Avoid | Insurer invests your extra money and gives back depreciated cash decades later. |
Worth having
- High Claim Settlement Ratio (>98% consistently over 3+ years)
- High Claim Amount Settlement Ratio (>95% by value paid out)
- Transparent exclusions (suicide within first year, declared lifestyle conditions)
- Regular pay term (avoid limited pay gimmicks unless planning early retirement)
- Proper medical check-up done by insurer during application (prevents future disputes)
Walk away from
- TROP (Term with Return of Premium) — costs 2×-3× more for zero real benefit
- ULIPs or Endowment plans disguised as "guaranteed income insurance"
- Agents pushing insurance solely for old regime 80C tax-saving deductions
- Omitting pre-existing conditions or smoking history to save on initial premium
The guide
Compare term plans on the cover they pay if you die, the years they last, and the premium you can keep paying. Do not compare them on a maturity amount. A pure term plan does not have one. If a quote leads with money back, you are looking at a different product.
This page does not rank insurers. Settlement ratios and premiums change, and a ranking we could not source would be a sales page. Use the list, then get real quotes.
Decide the cover before you see a price
Start from income and from who would struggle if it stopped. Ten to twenty times annual income is the usual range. Fifteen is a sensible default. Subtract employer cover only if you are sure you will keep that job for the whole term. Most people should not subtract it.
The estimator turns that into a number and a wide premium band. Take the cover figure to the quotes. Leave the band behind. It is an illustration from 22 October 2026, not a price.
What to put side by side
- Sum assured, term, and whether the premium stays the same for that term
- What is excluded, especially suicide in the early years and any adventure or travel limits that apply to you
- The claim-settlement record, read from the insurer’s published figures, not from an ad
- Riders, such as waiver of premium or critical illness, priced separately so you can say no
- How a claim would actually be filed by the person you are buying this for, and whether they know the policy exists
A cheaper premium on a plan your family cannot claim is not cheaper.
Walk away from these
- A bundle that adds investment so the premium “is not wasted”
- A recommendation that starts with the tax deduction. As of October 2026 the new regime is the default and does not allow the old 80C-style deduction. Read the tax article before you let a deduction choose the policy
- A cover so large that the premium comes out of the emergency fund
- Pressure to pay the first premium before you have read the exclusions
If nobody depends on your income, you can close the tab. Spend the same hour on health cover and the cash buffer. Term insurance is for the gap you would leave, not for a milestone on your twenty-third birthday.
This page does not rank brands, and it is not advice. Check the current fee schedule on the provider’s site before you pay anything.