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How To Do Comparison of Term Insurance Plans?

Updated On Nov 19, 2021

Term insurance is a form of insurance that is purchased for a specific amount of time or for a specific duration of time (number of years). Because term insurance has no cash value, it is less expensive than other types of life insurance policies. Only if the insured dies within the term insurance policy's coverage period does the policy become beneficial.

In comparison to other insurance products, term insurance is frequently disregarded. The main reason for this is that many people believe that term insurance policies don't give anything in the way of returns or additional advantages other than the Sum Assured.

Factors To Compare Term Plans

Here is the basis you can compare term plans on:

1. Availability of Riders

If you want to improve your policy, examine the numerous riders available with the various term plans. Aside from the amount payable upon the death of the insured, riders provide extra benefits. For extra protection, you can add riders to your term plan for critical sickness, accidental death, and permanent disability due to an accident, among other things. Ascertain that the term plan you select has a thorough set of riders.

Must Read: Is Term Insurance Better Than Fixed Deposits?

Following are the riders you should look for in a term plan:

Accidental Death: This benefit raises the amount guaranteed to be paid to your family members if you die in an accident. The majority of reputable term insurance plans provide an accidental death benefit equal to the basic sum assured.

Premium Waiver: In the event of permanent disability, life insurance coverage will continue without the need to pay a premium.

Income Benefit: Rather than a lump sum payment, some term insurance plans provide a recurring income to your family members. This benefit is useful if you want your term insurance policy to provide your family a monthly income in your absence.

2. Aim For A Higher Claim Settlement Ratio(CSR)

The amount of claims settled by the insurer in comparison to the total number of claims filed by policyholders is known as the claim settlement ratio. A high CSR indicates that your insurance company has settled a large number of claims, which lends confidence to them. A low Claim Settlement Ratio (CSR) indicates that your insurance company has a poor track record of resolving claims, which should raise an immediate warning signal for you. A CSR of over 90% is considered excellent.

3. Optimal Returns

Everyone's needs are met via term plans. A term insurance plan is one in which the payout is significantly greater than the amount invested, resulting in higher returns without the trouble of managing investment money. Regular and TROP plans can provide up to a 105 percent return on premiums paid as a maturity benefit.
It is important to compare the premium of different term plans available in the market and calculate the returns according to that.


Assessing term insurance policies is important since it allows you to learn about the features and benefits of each policy. Furthermore, it motivates you to make an informed decision so that your dependents are financially secure while you are away. Remember to thoroughly consider the term insurance advantages and features of each policy to find one that meets your needs. After all, a term plan is your ticket to ensuring your family's financial security even if you are not present.

Also Read: What Are Life Insurance Plans And Their Types?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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