How to Choose the Best Term Insurance Policy in 2026?

Term insurance is a type of life insurance that provides financial coverage to the family in case of the policyholder’s untimely demise during the policy term. It is an affordable term life insurance that offers financial protection to your loved ones and offers peace of mind, along with tax saving benefits. Before buying a term insurance plan, it is important to research all the insurers in the market and consider your insurance needs. Also, you should compare the benefits and features of different plans to make sure that you choose the best coverage at the most affordable rates.

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How to Choose the Best Term Insurance Plan in 2026: Step-By-Step Process

Here is how you can choose the best term insurance plan in 2026:

Claim Settlement Ratio of Life Insurance Companies

This claim ratio indicates the percentage of claims paid out of the total amount of claims filed in the year. The higher the CSR, the easier it will be for your family to claim the death benefit in case of your absence and continue to live their lives comfortably.

While the claim settlement ratio is important, it is more important to check the total claims settled by the insurance company. So, the first step in choosing the best term insurance plan should be checking the claim settlement ratio.

You should also check if the insurer has received more than 20 complaints per 10,000 claims in the last financial year, as that could be a sign to reconsider.

Term Plans

₹1
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₹50
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Life Cover

@ Starting from ₹ 8/day⁺

₹75
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Life Cover

@ Starting from ₹ 12/day⁺

Solvency Ratio

As per the IRDAI, it is mandated that every term life insurance provider has to maintain a 1.5 solvency ratio. The relevance of a solvency ratio is that it will let you know how capable the insurance company in terms of finances in settling the claims is. For example, in case of a natural calamity, a large volume of claims will need to be settled. Under such circumstances, the solvency ratio becomes helpful.

Critical Illness Cover

A critical illness rider can be added to the base term insurance plan, and offers additional cover against the diagnosis of covered critical illnesses. This rider can be added at nominal premiums and pays a benefit amount in case of the diagnosis of a covered illness. You can check with the insurance company to see the applicable benefits under this rider.

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Rider Benefit Options

By adding term insurance riders, you can enhance the base cover of the policy to include cover against critical illness, terminal illness, accidental death, accidental disability, and hospicare benefits. These riders can be added at nominal premiums that can be paid along with the base premiums. Some of the optional add-ons benefit you should look at while comparing term insurance plans online:

Waiver of premium: In this, the life cover will continue without paying the future premium in case of permanent disability.
Income Benefit: Some of the term plans help your family members to get a regular income from policy instead of a lump sum amount.
Accidental Death: This benefit increases the amount of sum assured to be paid to your loved ones in case of death because of an accident. Most of the best term plans will provide you with accidental death coverage equivalent to the sum assured amount.

Premium Cost

With the above-mentioned pointers, you would have taken into consideration a few term insurance plans from different insurance companies. Now, you need to compare the premiums of the term insurance plans and make sure that the plan that fits your budget also has enough life cover to support your family. Moreover, term insurance premiums do offer tax benefits. Select the mode of premium payment as per your convenience and make sure that you opt for auto-debit in regards to the premium payment.

Consider Current Lifestyle

Your current lifestyle will affect how to choose a term insurance plan, as it will help make sure that your plan aligns with it. Lifestyle choices such as occupation type, smoking and drinking habits, health conditions, and adventure activities can affect your premiums and the offered sum assured.

Assess Your Income

Your annual income impacts your premium payment ability and the amount of coverage you can buy. Therefore, when considering how to choose term insurance in India, you should make sure that the premiums of the policy fit within your income and budget. Also, you should make sure that the selected sum assured is enough to cover your family in your absence.

When to Buy a Right Term Insurance Plan?

Start Early (20s–30s): Premiums are significantly lower when you’re young and healthy, and you can lock in rates for the long term.
When You Have Financial Dependents: If your family relies on your income (spouse, children, parents), term insurance becomes essential.
At Major Life Milestones: Events like marriage, having a child, or buying a house (home loan) increase your financial responsibilities.
When You Have Liabilities: If you have loans (home, car, personal), a term plan ensures they don’t burden your family.
When Your Income Increases: Upgrading coverage as your income grows helps maintain your family’s lifestyle in your absence.
Before Health Issues Develop: Buying early helps avoid high premiums or rejection due to medical conditions later.
If You’re Self-Employed or Sole Earner: Ensures income protection for your family without employer-backed benefits.
When You Want Long-Term Financial Security: A term plan acts as a safety net for future goals like education, marriage, or retirement planning.

Wrapping it Up

Choosing the right term insurance plan is about balancing adequate coverage, affordability, and long-term needs. Start by assessing your income, liabilities, and your family’s future expenses, and choose a cover that can truly replace your income. In term insurance vs life insurance, term plans are often the better choice for pure financial protection. Compare insurers, check claim settlement ratios, and pick relevant riders before finalising. Most importantly, buy early and review your cover regularly to ensure your family stays protected as your responsibilities grow.

Note: Check out the best term insurance plan in India and choose one that suits your requirements.

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FAQ's

Q: How to select the best term insurance?
Ans: Here is how you can select the best term insurance plan:
- Select the right life cover
- Check the right policy term
- Add available riders as required
- Compare the premiums and plans
- Assess the CSR and customer reviews of the insurer
Q: What should we check before buying term insurance?

Ans: You should check your human life value and buy a term insurance cover that is in accordance with the eligible sum assured. Apart from that, you should also check your family’s requirements, annual income, and compare premiums to find the plan that fits your budget.
Q: Which company has the best term insurance plan?

Ans: The company that has the best term insurance plans depends on your individual needs. Compare the claim settlement ratios, solvency ratios, and customer reviews of the companies and find the one that is most suitable for your needs.
Q: What are the things I should consider when choosing an insurance provider while buying a term plan?
Ans:
- Claim Settlement Ratio (CSR): Indicates how reliably the insurer pays claims. Look for consistently high ratios.
- Solvency Ratio: Reflects the insurer’s financial strength and ability to meet future claims.
- Premium vs Coverage Value: Choose a plan that offers adequate coverage at a reasonable premium, not just the lowest price.
- Rider Options: Check the availability of useful add-ons like critical illness, accidental death, and waiver of premium.
- Customer Service & Claim Process: Opt for insurers known for a smooth, quick, and transparent claim settlement experience.

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˜The insurers/plans mentioned are arranged in order of highest to lowest Sum Assured(SA) offered by Policybazaar’s insurer partners offering term insurance plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Rs. 400/month is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 400/month (Rs.13/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 230 is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 8/day is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 12/day is starting price for a 75 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 497/month is starting price for a 1.5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 487/month is starting price for a 2 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 626/month is starting price for a 3 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 905/month is starting price for a 5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. ₹361/month is the starting price for a ₹1 crore loan cover with an 8% interest rate for an 18-year-old male, non-smoker, with no pre-existing diseases, loan tenure up to 20 years, rounded off to the nearest 10

+Rs. 1,267/month is starting price for a 7 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

*The full refund of premium is available on availing the one-time option of refund of premium. Total premium paid for policy (paid for add-ons) will be the special exit value, payable on availing the one-time option of refund of premium if you wish to completely exit the policy.

+Rs. 447/month is starting price for a 1 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs.679/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 910/month is starting price for a 3 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,374/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,924month is starting price for a 7 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

Women

+Rs. 400/month is Starting price for a 1 crore term life insurance for an 18 year-old Female, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 461/month is the starting price for a 1 crore term life insurance for an 24 year-old female, non-smoker, with no pre-existing diseases, cover upto 54 years of age.

1,642/month is the starting price for a 1 crore term life insurance for an 44 year-old female, non-smoker, with no pre-existing diseases, cover upto 74 years of age.

Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited

We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881

For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale

Policybazaar Insurance Brokers Private Limited | CIN: U74999HR2014PTC053454 | Registered Office - Plot No.119, Sector - 44, Gurgaon, Haryana – 122001 | Registration No. 742, Valid till 09/06/2027, License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the insurers.

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