Best Term Insurance Policy for Middle Class in India: A Complete Guide

In India, where financial security is a rising concern among middle-class families, term insurance plays a crucial role in safeguarding the future of dependents. It provides a high life cover at an affordable premium, ensuring peace of mind. But with so many options available, choosing the best term insurance policy for middle class in India can feel overwhelming.

This comprehensive guide simplifies that choice for you. We break down the features, benefits, and best policies that strike the perfect balance between affordability and coverage—specially curated for the middle-class segment.

Why Term Insurance Is a Smart Choice for the Indian Middle Class

Term insurance is the purest and most affordable form of life insurance. You pay a fixed premium for a chosen tenure, and in case of the policyholder’s untimely demise, the nominee receives a lump-sum death benefit.

Key Benefits:

• High sum assured at a low cost

• Customizable riders (critical illness, accidental death, waiver of premium)

• Tax benefits under Section 80C and 10(10D)

• Financial security for dependents

• Peace of mind, knowing your family won’t face hardship

What to Consider Before Buying Term Insurance

To find the best term insurance for middle-class families, keep the following in mind:

1. Claim Settlement Ratio (CSR)

A high CSR (above 95%) indicates a trustworthy insurer. Always check IRDAI’s annual report for the latest CSR figures.

2. Premium Affordability

Middle-class families need coverage without financial strain. Compare premiums across insurers before deciding.

3. Policy Term and Age Limit

Go for longer terms (e.g., till age 65 or retirement) to stay protected for most of your earning life.

4. Riders & Add-ons

Riders can enhance protection. Choose only relevant riders to avoid unnecessary cost hikes.

5. Solvency Ratio

A high solvency ratio means the insurer is financially stable—look for companies with a ratio above 1.5.

Top 7 Best Term Insurance Policies for Middle Class in India (2025)

Here are India’s most recommended term insurance policies, especially suitable for middle-class families:

1. LIC Tech Term Plan

• Pure online term plan from India’s most trusted insurer

• Minimum sum assured: ₹50 lakhs

• Max maturity age: 80 years

• Premiums: Slightly higher but great trust factor

• Riders: Accidental benefit available

✅ Best for: Traditional buyers who value government-backed institutions.

2. HDFC Click 2 Protect Life

• Flexible plan with multiple options

• Coverage till age 85

• Offers return of premium (ROP) option

• Critical illness and disability riders

✅ Best for: Customization and long coverage.

3. Max Life Smart Secure Plus Plan

• Competitive premium rates

• Premium back option available

• 99.51% claim settlement ratio (FY23)

• 64 critical illnesses cover available

✅ Best for: Value-for-money seekers.

4. Tata AIA Sampoorna Raksha Supreme

• High claim settlement ratio (99.01%)

• Flexible premium payment terms (single, limited, or regular)

• Optional payout benefits (lump sum, monthly income)

✅ Best for: Those wanting flexibility in payment and payout.

5. ICICI Pru iProtect Smart

• Covers 34 critical illnesses

• Covers death due to COVID-19

• Waiver of premium on permanent disability

✅ Best for: Comprehensive protection and health-based riders.

6. SBI Life eShield Next

• Covers accidental death and terminal illness

• Affordable premium for salaried individuals

• Rising income and level cover options

✅ Best for: Salaried middle-class individuals.

7. Bajaj Allianz Smart Protect Goal

• Sum assured from ₹50 lakhs to ₹5 crores

• Additional benefit for accidental death

• Offers child education and income replacement rider

✅ Best for: Young parents planning future for kids.

Sample Premium Comparison Table (Male, Non-Smoker, Age 30)

Note: Premiums vary based on age, health, lifestyle, and sum assured.

Why Middle-Class Indians Shouldn’t Delay Buying Term Insurance

Delaying term insurance could:

• Increase your premium significantly due to age

• Leave your family financially unprotected

• Lead to coverage denial if health deteriorates

Example:

If you buy a ₹1 crore policy at age 30, your premium could be ₹10,000–₹12,000 per year. But at 40, it may jump to ₹20,000+.

How to Choose the Right Term Plan Online

Step-by-step:

1. Compare policies on platforms like Policybazaar, Coverfox, or directly from insurer websites

2. Use premium calculators

3. Check claim settlement ratio

4. Read policy wordings and exclusions

5. Choose relevant riders

6. Opt for monthly/annual payment based on cash flow

7. Complete KYC and medical tests

8. Pay online and keep documents safe

Tips to Get the Most Value from Your Term Insurance

• Buy early (the younger you are, the cheaper it is)

• Avoid unnecessary riders

• Disclose health and lifestyle honestly

• Review coverage every 5 years or after major life events

• Don’t mix insurance with investment – term is for protection only

Common Myths About Term Insurance in India

FAQs: Best Term Insurance Policy for Middle Class in India

Q1. Which is the most affordable term insurance policy for the middle class in 2025?

Max Life Smart Secure Plus and SBI Life eShield are two of the most affordable options for middle-class families.

Q2. How much term insurance coverage is enough for a middle-class person?

A thumb rule is 15–20 times your annual income. So, if you earn ₹6 lakhs per year, aim for at least ₹1–1.2 crore coverage.

Q3. Should I buy term insurance online or offline?

Buying online is cheaper, faster, and more transparent. But if you’re not tech-savvy, a trusted advisor can help offline.

Q4. What happens if I stop paying the premium?

The policy lapses, and you lose the protection. Some plans offer grace periods or revival options within a time frame.

Q5. Is term insurance premium refundable?

Only if you opt for Return of Premium (ROP) plans, which have higher premiums but return money if you survive the term.

Q6. Can a smoker or diabetic get term insurance?

Yes, but at higher premiums and possibly with stricter medical tests. It’s still advisable to get insured.

Q7. What is the best age to buy term insurance?

The earlier, the better. Ages 25–35 offer the lowest premiums and widest eligibility.

Final Thoughts

For India’s growing middle class, term insurance isn’t just a financial product—it’s a promise of security. Whether you're a salaried professional, a self-employed businessperson, or a homemaker, there’s a plan designed to fit your needs.

The best term insurance policy for middle class in India is one that:

• Covers you for a long time

• Fits your budget

• Comes from a reputed insurer with high claim settlement ratio.