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Best 5-year Term Life Insurance Plans in India

Gopal Sharma Rajan, a textile merchant, did not have any insurance plan till the age of 40 years. He has always been confident that nothing untoward will happen to him, but his auditor advised him to buy a term plan for income tax benefits at least, to which he finally agreed. Since he was not interested in paying a premium for a long time, he availed the 5-year term life insurance policy for a sum assured of 25 lakhs. The going was good until COVID-19 struck. Gopal Sharma got infected with the virus, and despite massive efforts, he passed away at the age of 43 years. His family was completely devastated by the turn of events as he was the single earner for the entire household. To their rescue came the term plan availed by Gopal, which paid them Rs. 25 lakhs as a death benefit on his demise. If not for the term insurance taken at the last moment, Gopal’s family would have faced a tough time financially. Thus, a term policy acts as a lifesaver for the family and protects the financial commitments of the near and dear ones, even after your demise. But what does 5-year term life insurance mean in the above example, and how is it beneficial for individuals in their financial planning?

What is a 5-year term life insurance policy? 

A 5-year term insurance policy is nothing but a regular term plan designed to offer protection for your family’s financial future in case of any untoward events, such as death, terminal illness, disability, etc., that may happen during the policy tenure of 5 years. 

In general, a term plan is available for an individual, and a premium should be paid every year for the policy benefits to continue. But few people choose to invest in a 5 year insurance policy for short-term needs wherein the policy shall provide cover for 5 years and their premium payment term shall also be 5 years only. So if you are looking to buy a term plan for a shorter duration, such policies are the best fit as they serve the purpose and don’t cost much. 

7 Best 5 Year Term Life Insurance Plans in India 2021 - IIFL Insurance

With numerous insurance companies, it can be an uphill task for you to choose the right type of policies that suit your needs. But you must invest time and effort in finding it as it guarantees peace of mind not only for you but also for a stress-free future for your family.

List of 7 Best 5-Year Term Life Insurance Plans in India 2021

Here are the best 5-year term life insurance plans with a few of its essential features for you to choose and buy in the year 2021 as mentioned below:-

Plan Name Entry Age (Min/ Max) in years Policy Tenure (Min-Max) in years Sum assured (minimum) Claim Settlement Ratio (CSR)
HDFC Click2Protect Plus 25 – 65 5 – 85 ₹ 10 lakhs 99.07%
SBI Life eShield 18 – 65 5 – 80 ₹ 35 lakhs 94.52%
ICICI Prudential iProtect Smart Term Plan 18 – 65 5 to 40 subject to minimum premium 97.84%
Bajaj Allianz Smart Protect Goal Term Plan 18 – 65 5 to 40 ₹ 50 lakhs 98.02%
Canara HSBC OBC iSelect Star Term Plan 18 – 65 5 to 60 ₹ 25 lakhs 98.12%
Kotak e-Term Plan 18 – 65 5 to 40 ₹ 25 lakhs 96.38%
Aegon Life iTerm 18 – 65 5 to 82 ₹ 25 lakhs 98.01%

Top 4 Benefits of buying 5-year term plans in India

Will anyone let go of any opportunity if it involves planning for a financially safe family in the future, especially after they pass away? Obviously not, by buying term insurance for 5 years, you are taking the first step towards financial freedom for them to live their lives fully. There are a few other benefits of these policies, which are:

  1. Affordable Premiums: The premium for a 5-year term life insurance plan costs typically lower than other plans, which is very much within reach for a middle-class individual or those looking for a term plan with high assured but only for a shorter duration. Opting for any other type of insurance policy for the same value will cost more.
  2. Customize Policy: Term insurance policies are available with options to choose from a wide variety of plans as per your requirements, such as income options, premium waivers, increasing sum assured, accident benefit, disability, and critical illness covers, etc. You can get these advantages at a fraction of the cost, which you may extend at the time of renewal or move to other plans if you prefer.
  3. Protect Your Assets: Nobody would like to lose out on their hard-earned assets. While you would have worked hard to attain a lifestyle, it is natural for you to expect the same lifestyle to be maintained by your family members even after your time. A term plan with a high sum assured should help your family to manage the debts and liabilities on those assets in your absence.
  4. Riders: A term plan might provide your family with a financial corpus for them to lead a life after your demise, but while you are alive, riders or addons safeguard you against illnesses, disability, and accidents. You can attach these riders to an existing policy for a slightly extra premium and ensure safety from typical uncertainties of life. Some famous riders are Critical illness riders, Accident benefit riders, Waiver of premium riders, etc.

 

Buying a 5-year term insurance plan might seem like a one-time affair. Still, it is an important decision as it involves your future, most notably the future of your family members, after your passing away. Hence, before you proceed to buy the policy, it is recommended you understand all the insurance policies and their benefits in detail from the brochures available on their website. You may also take the advice of insurance experts & clear your doubts before investing as this one decision can alter your family’s future in your absence. 

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