Top 5 Term Insurance Plans with Maximum Tax Benefits (2025)

 It makes sense to look for the best term insurance plans in India that help you reduce your taxes for the year 2025. A term insurance policy gives your family financial protection and also helps you minimize your taxes. We’ll discuss the 5 top plans, noting their tax benefits, claim settlement success and the exciting features they provide at the end of the term.

Max Life Smart Secure Plus Plan

Max Life’s Smart Secure Plus Plan is regularly named as one of the top choices for term insurance, thanks to a high claim settlement ratio of 99.65% and several options for receiving payouts. The plan includes life insurance, coverage for serious illness and the return of premium—­making it an excellent option for those who want maturity benefits from a term policy. The contributions you pay as premiums are covered by Section 80C, and benefits paid out by either death or size of maturity are tax-exempt under Section 10(10D).

ICICI Prudential iProtect Smart

With ICICI Prudential iProtect Smart, you have the choice of critical illness and accidental death riders to cover you and your family. The insurance company has a 99.17% settlement rate, which means it is extremely trustworthy. Under the plan, you can claim tax exemption up to ₹1.5 lakh under Section 80C, and any amount your nominees receive is also tax-free due to Section 10(10D).

HDFC Life Click 2 Protect Life

The plan is popular because it is flexible, can be held for a long time and settles claims at a very high rate (99.39%). It allows someone to consider an endowment plan with almost full protection, or they might choose term insurance with a premium refund. Because of the benefits from Section 80C and Section 10(10D), ULIPs are competing strongly in 2025.

Tata AIA Maha Raksha Supreme

With Tata AIA’s Maha Raksha Supreme plan, you get broad insurance, yet the premiums are not expensive, and additional riders can be bought for critical illness and accidental death. Thanks to the plan, you receive tax exemptions on premiums (Section 80C) and the sum paid out after a death claim is also exempt from tax (Section 10(10D)). The low cost and wide range of benefits keep this company’s term insurance among the top in India.

PNB MetLife Mera Term Plan Plus

Mera Term Plan Plus from PNB MetLife includes many features and has settled 99.06% of its claims. Because it is flexible in paying out and lets the insured keep some of the premiums you’ve paid along the way, it is suited for people who want term insurance and a saving aspect. Since tax deductions exist under Section 80C and tax-free benefits do as well under Section 10(10D), you can maximize your term insurance tax benefit.

Key Tax Benefits of Term Insurance

  • Income tax allows you to reduce your tax bill by up to ₹1.5 lakh every year through premiums paid for insurance.
  • A policy owner gets tax advantages for death and maturity benefits, but only if certain conditions under Section 10(10D) are met, including a premium that does not go over 10% of the sum assured.
  • Make sure your policy meets the standards if you choose a plan that offers you maturity payments without tax charges.

Conclusion

When selecting term insurance in India, it’s important to consider all the benefits, how much you will pay and how much tax you can save. These plans will offer security as well as the advantage of term insurance tax benefit rules. At EximPe, we believe it is important to look at your coverage needs and talk to a trusted advisor to find the best-term insurance plan for your family.

Make sure your loved ones are safe and cut your taxes—buy term insurance now.

FAQs

  1. What tax benefits do I get by buying term insurance in 2025?

You can claim a deduction of up to ₹1.5 lakh per year on premiums paid under Section 80C of the Income Tax Act, 1961. Additionally, any payout received by your nominee (death benefit) or maturity benefit (if eligible) is tax-free under Section 10(10D), provided certain conditions are met.

  1. Are maturity or return of premium benefits from term insurance tax-free?

Yes, maturity or return of premium benefits are tax-free under Section 10(10D) if the premium paid does not exceed 10% of the sum assured for policies issued after April 1, 2012.

  1. What is the claim settlement ratio, and why is it important?

The claim settlement ratio (CSR) indicates the percentage of claims an insurer has paid out compared to claims received. A higher CSR, like those above 99% for Max Life, ICICI Prudential, and HDFC Life, means better reliability and trustworthiness for your family’s financial security.

  1. Can I enhance my term insurance coverage with riders?

Yes, most leading term insurance plans allow you to add riders such as critical illness, accidental death, and waiver of premium for enhanced protection, often with additional tax benefits on the rider premiums.

  1. Is it possible to get both life cover and savings from a term insurance plan?

Some term insurance plans, like those with a return of premium option, allow you to get back all premiums paid if you survive the policy term, combining life cover with a savings element—while still offering tax benefits.

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