When it comes to financial planning in India, term insurance plays a crucial role — not just for life protection, but also as a smart tax-saving tool. With increasing awareness around long-term security and the rising cost of living, more people in 2025 are choosing term insurance policies to secure their family’s future while taking advantage of Section 80C and 10(10D) tax benefits.
If you’re looking to save tax and protect your loved ones with a solid backup plan, here’s a detailed guide to the best term insurance plans in India for 2025.
Why Choose Term Insurance for Tax Saving?
Term insurance offers pure life cover — meaning, in case of the policyholder’s death during the term, the nominee receives a large lump-sum payout. The premium paid is eligible for tax deduction under Section 80C (up to ₹1.5 lakh per year), and the maturity/death benefits are tax-free under Section 10(10D).
So, not only do you ensure your family’s financial protection, but you also reduce your taxable income — a win-win situation.
Top Term Insurance Plans to Consider in 2025
Here are some of the most popular, reliable, and value-for-money term insurance plans in India this year:
1. LIC Tech Term Plan (New Version 2025)
- Insurer: Life Insurance Corporation of India
- Entry Age: 18 to 65 years
- Sum Assured: Minimum ₹50 lakh
- Policy Term: Up to 40 years
- Claim Settlement Ratio (CSR): 98.5% (2024 data)
- Special Feature: Online-only policy with low premium for non-smokers
A trusted, government-backed policy ideal for long-term protection and tax benefit seekers.
2. HDFC Click 2 Protect Super
- Insurer: HDFC Life
- Customizable: Yes – Life + Income option
- Special Riders: Critical illness, accidental death, waiver of premium
- CSR: 99.39%
Highly flexible, suitable for salaried professionals who want additional income support for dependents.
3. Max Life Smart Secure Plus Plan
- Insurer: Max Life Insurance
- Sum Assured: ₹25 lakh – ₹1 crore+
- Premium Return Option: Yes (optional)
- CSR: 99.51%
Best for those who want a return of premium option along with add-ons like disability or terminal illness cover.
4. TATA AIA Sampoorna Raksha Supreme
- Insurer: TATA AIA Life
- Unique Feature: Monthly income benefit with lump sum
- Tax Benefit: Premium eligible under Section 80C
- Add-ons: Top-up sum assured during life events (marriage, child, etc.)
A feature-rich plan for long-term family coverage and income protection.
5. ICICI Pru iProtect Smart
- Insurer: ICICI Prudential Life
- Unique Features: Covers 34 critical illnesses and terminal illness
- CSR: 97.8%
- Issue Time: Policy issuance in 48 hours for eligible applicants
Perfect for young buyers and business owners looking for critical illness + life cover combo.
Tax Benefits Recap
| Tax Section | Benefit |
|---|---|
| Section 80C | Up to ₹1.5 lakh deduction on premiums |
| Section 10(10D) | Tax-free death/maturity benefit |
| Section 80D | Additional deduction on health riders |
To qualify for 10(10D) benefits, make sure your premium does not exceed 10% of the sum assured.
How to Choose the Right Term Plan
- Choose a sum assured that is 15 to 20 times your annual income
- Select a policy term that covers you until retirement or loan payoff
- Check claim settlement ratio and customer reviews
- Add riders only if they match your needs (like critical illness or waiver of premium)
- Disclose all health and lifestyle information honestly during application
Conclusion
In 2025, term insurance is not just a tool for risk protection — it’s also a smart way to reduce your taxable income under Section 80C. With plans becoming more customizable and digital, buying term insurance is now simpler, quicker, and more transparent.
Whether you’re a salaried employee, self-employed professional, or someone just starting out, investing in a good term insurance policy early ensures long-term peace of mind and tax savings.
