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Term Insurance Companies in India in 2025
Due to the unpredictability of life, it is often difficult to foresee what the future holds. Individuals starting a family need to ensure that their spouse, children, parents and other family members remain financially secure, even if some unfortunate event occurs to the individuals.
For instance, a sudden disease may cut short your remaining lifespan, leaving your family stranded without any means of livelihood.
Life insurance policies or more specifically, term insurance plans safeguard your loved ones against just such events. These policies provide a sizable compensation to your family members in the event of your demise.
With this death benefit, people in your family can move on with their life, without facing financial shortfalls.
Table of Contents
What is Term insurance?
Term insurance plans are specific types of life insurance policies where the death benefit is the sole advantage.
Unlike many other life insurance plans where policyholders can claim a substantial return on an investment after the policy tenure ends, term insurance offers no such additional benefit.
One can claim such a policy only if the insured individual passes away due to natural circumstances during the tenure of such a plan.
However, if the death occurs after the tenure runs out, nominees cannot claim any financial compensation from the insurer.
The primary benefit of a term insurance plan is the lower premiums linked with them. Additionally, the death benefit amount related to such a policy is significant vis-Ã -vis most other types of life insurance policies. Additional benefits include:
- Availability of multiple riders to enhance financial protection offered by a standard term insurance plan
- Term insurance providers offer innovative features and discounts, including rebates to policyholders who do not smoke.
- You can increase life cover at critical points in your life, such as during marriage, or when you become a parent for the first time.
List of Term Insurance Companies in India
List of Life Insurance Aggregators in India
Aggregator is an online insurance website that assists clients in locating insurance products from the insurance service providers. It offers details about several types of insurance to its users. It helps clients compare policies existing for the same, based on coverage, premiums, and so on, but offers little assistance in post-sales services.
On the other hand, a term insurer is an insurance company that deals with term insurance contracts with tenors that have coverage during a specified time. The policies are sold by term insurers directly to customers either online through the insurer’s website or agents. The benefits of transacting directly with the term insurer include direct contact/interactions.
Nonetheless, there are time-consuming constraints, time spent manually comparing a policy of different Insurers, and an additional cost since a policy purchased directly from the Insurers can be more expensive than the aggregator.
How is the Term Insurance Market in India?
Market Size and GrowthÂ
The term insurance market in India is part of the broader life insurance sector and is projected to reach a valuation of USD 1,058.08 billion in 2023. The market is expected to grow at a compound annual growth rate (CAGR) of 8.9% from 2024 to 2030, reflecting the increasing demand for financial protection among Indian consumers.
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Key DriversÂ
Term life insurance covers a specific period, such as 10, 20, or 30 years. Unlike whole life insurance, which requires lifetime payments, term life insurance is temporary and more affordable. Due to its simplicity and cost-effectiveness, it has surged in popularity, especially among younger generations like Millennials and Gen Z.
In 2024, term policies comprised a significant portion of new life insurance sales, driven by the industry's focus on digital engagement and simplified policy information. This trend is expected to continue, further boosting the market growth of term life insurance.
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ChallengesÂ
Digital transformation is boosting the insurance market by making operations more efficient and improving customer experiences. However, it also brings challenges. A survey in February 2023 found that 60% of consumers prefer to communicate with insurance companies online. While this trend is driving market growth, insurers must quickly adopt new technologies to meet these digital demands and stay competitive.
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Future OutlookÂ
The adoption of smart solutions like artificial intelligence (AI) and big data analytics is expected to significantly enhance operational efficiency and reduce costs, making term insurance more affordable. Governments are also promoting financial literacy and insurance-related programs, which should further drive market growth.
Legal Frameworks Governing Term Insurance in India
The legal framework governing term insurance in India is primarily regulated by the Insurance Regulatory and Development Authority of India (IRDAI). The key legislations include the Insurance Act of 1938 and the Insurance Regulatory and Development Authority Act of 1999.Â
Recent updates include the IRDAI (Unit Linked Insurance Products) Regulations 2019 and the IRDAI (Non-Linked Insurance Products) Regulations 2019, which set revised norms for designing and issuing life insurance policies.Â
Additionally, the Insurance (Amendment) Act of 2021 increased the foreign direct investment limit in Indian insurance companies to 74%, reflecting the sector's evolving regulatory landscape.
IRDAI New Rules for Term Insurance
The Insurance Regulatory and Development Authority of India (IRDAI) has introduced several new rules to enhance the term insurance landscape in India. Key updates include:
Standardisation of Products
As per the directive of the IRDAI, it is necessary to introduce standard-term insurance products to reduce consumer profiles. These are quantifiable, which implies that they have similar attributes and benefits in all the insurance companies so that the policyholder can differentiate between one policy and the other.
Enhanced Disclosure Requirements
Policyholders used to have little knowledge of the policy terms, conditions and exceptions, but through the changes in regulation/, insurance companies are required to provide more information.
Digital Transformation
The IRDAI has also advised all insurers to move from conventional approaches to selling insurance policies and their management through an online framework. This includes such nuances as e-KYC (Know Your Customer) procedures and digital signatures for transactions or enhancing business processes and customers’ expectations.
Claims Settlement
What used to be implemented in the past is now slowly replaced by new measures, which would allow for the immediate disposal of liabilities. In this context, there are many predicted time spans through which the insurance providers are expected to pay the claims, and if they do not do so, they are penalised.
Increased FDI Limit
The Insurance (Amendment) Act 2021 has again increased the FDI cap of Indian insurance entities up to 74%. This event will introduce more capital as well as efficiency into the Indian insurance market.
Lower Penalties for Early Exit
The Insurance Regulatory and Development Authority of India (IRDAI) has introduced rules to reduce penalties for policyholders who exit their policies prematurely. This means if you decide to surrender your policy early, the financial penalties will be less severe.
Improved Claim Settlement
The new rules focus on speeding up the claim settlement process. Insurers are now required to settle death claims within 15 days, provided no investigation is needed. This aims to provide quicker financial relief to beneficiaries.
Extended Free Look Period
The free look period, which allows policyholders to review and cancel their policy without any penalties, has been extended from 15 to 30 days. This gives policyholders more time to evaluate their policy terms and make an informed decision.
Factors to Look for in a Term Insurance Company
When choosing a term insurance company, it's essential to consider several factors to ensure you get the best coverage for your needs. Consider these key factors:
- Claim Settlement Ratio: This ratio determines the relationship of an insurer’s handling and remunerating for claims lodged with the insurance company. Therefore, a higher CS Ratio indicates that the Company is more capable of honouring commitments regarding claims on policies sold to clients and indemnifying other policies.
- Financial Strength: When perusing the official websites of insurance companies, try to find out the credit ratings provided by AM Best, Moodys or CRISIL. As for the third dimension, both types of capital are examined. Therefore, the healthy financial health of an organisation means its capability to meet long-term commitments.
- Premium Rates: The terms, conditions, and cost of the different available premiums must also be compared across those insurance companies offering similar services. Ensure that the premiums are within the reach of policyholders and offer value for the amount of protection purchased.
- Policy Features: Look for additional features such as riders (e.g., critical illness, accidental death), flexibility in premium payment options, and the ability to convert the term policy to a permanent one.
- Customer Service: Assess the quality of customer services, including customers' promptness, simplicity, and efficiency in managing policies and the support they receive when filing a claim. Cordiality and helpful responses can make a significant difference in one's experience.
- Digital Capabilities: With the current advancement of technology, consider checking whether the insurer can sell, manage and process claims using the Internet. This can be convenient and time-saving.
- Reputation and Reviews: Check customer reviews to know what they have to say about the Company and the services they offer. Positive feedback and a good reputation can indicate a trustworthy insurer.
Why Should You Buy Term Insurance from Direct Insurance Providers?
Buying term insurance directly from insurance providers offers several advantages:
- Cost-Effective: A direct term insurance plan is often cheaper because there are no middlemen, such as brokers or agents in charge of commissions. Such reduction of commission costs is possible and brought out below as to how a considerable amount of money can be saved.
- Convenience: It becomes easier to buy directly from the insurance company. The policies are provided in a sort of package so that the consumer can compare and purchase them online without having to talk to different agents.
- Transparency: Insurance is usually directly provided by the insurance companies, and most of the time, these are not very discreet regarding the policies they have for the public. With the laydown terms, conditions, and benefits, you are informed of them, thus having no hidden clause.
- Speed: If an individual is applying directly to the insurance company, the process of applying and getting approval may be shorter. Many service providers enable instant policies to be issued, and most of the papers are digital. Hence, lots of time is saved.
- Control: Direct buying gives a buyer more control in deciding on the product to be purchased. It provides you with ample time to compare and shop for the needed policy and arrive at the most appropriate decision.
Why Should You Choose Digit for Term Insurance?
Affordable Premiums
Digit offers fairly standard premium rates with term insurance, making it easier and cheaper for many people to get an insurance policy.
Simple and Transparent Process
We emphasise a hassle-free and transparent buying process. Their digital platform lets you easily compare, purchase, and manage your policy online.
High Claim Settlement Ratio
Digit has a good record of settling its claims, which means your claims will be processed quickly and without a hitch.
Comprehensive Coverage Options
At Digit, you will find different term insurance policies, and we have options for customisation to add on to the options including riders for critical illness, accidental death, and more, to enhance coverage.
Customer Support
We have accessible customer service support to help you as a client if you have a question or problem.
Innovative Features
Digit has Incorporated efficient technologies to enhance the functionality of the business and customers and include AI in the claims.
Insurance Company vs Insurance Aggregators vs Insurance Brokers
Understand the difference between insurance companies, aggregators and brokers.
- One should consider the pros and cons of choosing from a particular term insurance provider before availing such policies.
- You must check the various facets of an insurance company, such as claim settlement ratio, customer service and overall reputation.
- Additionally, a company’s policy features should align with the facilities you are seeking from such life coverage.