Term Insurance for High Net-Worth Individuals (HNIs) in India

Note: Know more about what is term insurance first before reading this article.

Who is Called an HNI (High Net-worth Individual)?

The full form of HNI is High Net-worth individuals who are considered people with an investible surplus (liquid assets) of more than 5 Lacs. Investible surplus or liquid assets is the amount of money a person has freely available as savings that they can easily convert into cash for emergency situations. 

The HNI meaning in India is defined as individuals whose investable assets, such as stocks and bonds, exceed a fixed amount and who own liquid assets, such as money held in brokerage accounts or banks. However, liquid assets do not include investments like purchasing a house, life insurance, a car, or any other personal assets that can’t provide liquid money in the time of need. This clear distinction helps in identifying the best investments for high income earners by focusing on assets that remain accessible when needed.

This means anyone with a house, car, or any other personal property will not be considered as the person's liquid assets. 

What are the Types of HNI (High Net-worth Individuals)?

The HNI full form of the three types of High Net-worth Individuals (HNIs) are as follows:

• High Net-worth Individuals: People with liquid assets ranging from 5 Lacs to 5 Crores.

• Very High Net-worth Individuals: People with liquid assets between 5 Crores to 25 Crores.

• Ultra High Net-worth Individuals: People with liquid assets worth more than 25 Crores.

These categories often determine eligibility for exclusive financial services, including whole life insurance for high income earners, which ensures coverage for life along with wealth transfer benefits.

What is the Term Insurance for High Net Worth Individuals?

Term insurance for high income earners in India is a life insurance plan that provides high coverage at an affordable premium rate. This term insurance is designed to help HNIs with good wealth and complete financial interests.
Term insurance plans offer a tax-free lump sum payout to the nominees or beneficiaries if the life assured passes away during the policy term. However, it ensures dependent's liquidity to maintain lifestyle, manage liabilities or provide coverage to estate taxes. Term insurance plans for HNIs with high cover amounts make term insurance an essential investment for preserving wealth and planning legacy.

Why Do HNIs Need Term Insurance Plans?

Many high net-worth individuals believe they don't need term insurance due to their significant wealth. However, term insurance plays a vital role in long-term financial planning. It provides peace of mind, knowing that one's family can maintain their lifestyle and meet liabilities in case of untimely demise.

Term insurance is a key component of financial advice for high income earners, especially for those looking to manage estate taxes, business continuity, and inheritance planning. Insurance companies today offer specialized HNI plans, placing customers in Silver, Gold, or Platinum circles based on annual premium amounts starting from ₹50,000 onwards.

While many HNIs rely on market-linked funds or real estate to create wealth, setting aside a small portion for term insurance offers risk-free security. For those looking beyond term insurance, whole life insurance for high-income earners is also gaining popularity. It provides lifelong coverage and the potential for cash value accumulation.

What is the Eligibility Criteria to Buy Term Insurance for HNIs?

• Age: Generally, should be between 18 and 65 years

• Income: Annual income should be more than 25 lakhs

• Health status: The individual should be healthy and require a medical test

• Occupation: Insurance companies look for high-income earners

• Residency: You should be an Indian resident

List of Term Insurance Plans for HNIs in India 2025^*

Below is the list of Insurance Companies selling term insurance plans for HNIs in India:

*Disclaimer: The list of insurers mentioned are arranged according to the alphabetical order of the name of insurance company respectively. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. The list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in

*The plans mentioned above are available for individuals earning above 25 Lacs per annum for cover till 60 years of age and vary depending on your age and other such factors.

Why Should HNIs Consider Buying Term Insurance Plans?

Let us take a look at why HNIs should consider buying term insurance plans:

• Financial Security on Death: With HNI insurance plans, high net-worth individuals can secure a large life cover for their loved ones in their absence. This amount will be paid to their family members in case of their unfortunate death during the policy term.

• Lower Premiums: Since term plans do not provide whole life cover or maturity benefits, term insurance for high net-worth individuals is available at really affordable premium rates. This way, you can get life coverage for a limited duration, and the policy will expire once your needs are fulfilled. You can also convert these plans into a whole life insurance policy, in case you want to secure your family for your whole life till 99/100 years.

• Protection against Loans/Debts:A lot of the high net-worth individuals are business owners who might have started their business by taking loans like business or home loans, and in case of their untimely death, the family of the policyholder might be burdened with these debt repayments. A term insurance payout can help your family pay off any remaining loans and obligations in the long run.

• Returns on Maturity: Regular term plans do not provide any maturity benefits, but term plan variants like term return of premium plans return all the premiums paid towards keeping the policy active at the end of the policy term. This amount can help you and your family members beat inflation and secure your post-retirement life.

• Better Financial Planning: When you have a better knowledge of the amount you are expecting as the return of premium, you can plan your finances better. Suppose you already have a life insurance maturing at the age of 65, and your term insurance for high net-worth individuals is supposed to end at the age of 65 as well, then you can secure your post-retirement life using the total amount you received. You can use a term insurance calculator to check the premiums applicable for your profile and plan your finances better.

• Special Extra Benefits: By buying term insurance for high net-worth individuals, you can get access to the special benefits offered to HNIs, like specialized policies with additional privileges.  

• Personalized Customer Support: HNI term insurance plans offer a specialized welcome where the dedicated relationship manager repeats the terms and conditions of the term insurance policy. The high net-worth individuals get personalized customer support and a quick guide on how to operate the company’s online portal.

• Tax Benefits: Term insurance for high net-worth individuals provides tax-saving benefits as per the prevailing tax laws. The Government of India provides term insurance tax benefits u/s 80C on the premiums paid, u/s 80D on the premiums paid for riders like critical illness and hospicare riders, and u/s 10(10D) on the death and maturity proceeds received from the term insurance plans.

What Type of Term Insurance is Suitable for HNIs in India?

You can buy any of the following types of HNI plans as per your requirements:

• Decreasing Term Plans: Decreasing term plans can help HNIs get a life cover as per their requirements at highly affordable premiums. The premiums are lower than most types of term insurance plans because the life cover decreases over time.

• Regular Term Insurance: Regular term plans offer a large life cover that remains constant throughout the policy term at affordable premium rates.

• Whole Life Insurance Policy:These HNI plans provide protection for the policyholder's whole life, i.e., till 99 or 100 years of age. These plans payout in case of the policyholder’s death to the nominee of the policy.

Why HNIs Prefer Buying Whole Life Insurance Plans?

HNIs or high net worth individuals are turning to whole life insurance policies since they offer long-term protection and tax-free benefits to the nominees. As per the new Budget 2023, the maturity returns for life and term insurance plans with annual premiums exceeding 5 Lacs will be taxable, but the death benefit proceeds from these plans will remain tax exempted. With whole life insurance policies, the assured can buy an insurance plan for a large life cover at affordable premiums and ensure their loved ones receive the death benefit in their absence without having to worry about taxes.

Limited vs Regular Premium Payment Mode – Which Is Better For HNIs?

Let us understand if limited premium payment mode is better or regular mode for High Net-Worth Individuals (HNIs):

7 Factors to Keep in Mind Before Buying Term Insurance for HNIs

Here is a list of 7 points to consider before purchasing the most suitable term insurance for HNIs:

• Assess your requirements:Before you buy term plan, you need to assess your requirements and find a term insurance plan that fits your requirements.

• Select the type of term insurance: You can go through the types of term insurance available in India and select the most suitable HNI plan from the insurer of your choice.

• Choose the suitable life cover: Since the life cover is the amount payable to your family, you need to make sure the amount is large enough to cover your family’s financial needs in your absence, like paying off any remaining loans. Following the general thumbs rule, the HNIs should buy term plan at least 10 times their annual income. You can also use the Human Life Value Calculator to check the maximum amount of sum assured for which you can buy a term insurance plan.

• Pick the required policy details: You should select suitable policy details like policy terms, available riders, death and maturity benefits, and other benefits offered under the HNI insurance of your choice.

• Compare available term plans: Before purchasing suitable term insurance for high net-worth individuals, you should always compare term plans online on the basis of the company’s CSR values, solvency ratio, and customer reviews.

• Current Medical Conditions: Assess your family’s history and current medical conditions as they can impact the premium rates and the sum assured the insurance company offers. If possible, try to purchase the plan as early as possible, as the chances of you contracting life-threatening illnesses are less at a younger age, and thus you might get the term plan of your choice at a lower premium rate.

• Appoint the Nominee: Appoint the nominee of your choice for the term plan and proceed to purchase.

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