A few days ago, a client booked a free consultation call with us to opt for a term insurance plan.
(P.S. You can do the same -
Term insurance policies are a long-term financial commitment that requires you to make an informed decision. Thus, you would need to go through a term insurance policy wording, which is a terrible combination of legal, medical and financial jargon.
Additionally, you have to be extremely thorough so that you don’t miss out on any exclusions in coverage or clauses involved in the plan. Under such circumstances, it only makes sense that you book a free call with one of our IRDAI-certified experts and experience a SPAM-free and seamless insurance purchase, as has been verified by over 10,000+ clients!)
As a 22-year-old who had just started working, this was extremely smart financial planning, and we were more than happy to guide him towards the best term insurance providers and calculate an ideal term insurance coverage.
From the list of term insurance providers that we recommended, he decided to go for HDFC Life, and we calculated his ideal term insurance coverage to be 1 crore.
Here’s what we informed him about his insurer’s track record, HDFC Life’s credibility score, and the best HDFC term insurance policies for 1 crore coverage!
HDFC Life as Term Insurance Provider
- HDFC Life’s Track Record: HDFC Life Insurance started in 2000 and has since become one of the top private insurers in India, with a solid annual business of ₹24,315 crores. Known for its strong reputation, HDFC Life offers a range of popular financial products like group policies, ULIPs, retirement plans, savings plans, and term insurance. What really sets them apart is their efficiency—boasting the highest Claim Settlement Ratio in the industry, few complaints, and a strong Amount Settlement Ratio. The catch? Their plans are usually a bit more expensive than others in the same category. However, given the quality and thorough coverage, many feel it's a small price to pay.
- Metrics of HDFC Life
- Claim Settlement Ratio (CSR): The Claim Settlement Ratio (CSR) of an insurer is calculated by dividing the number of claims settled in a year by the total number of claims made to the insurer in that same year, then multiplying the result by 100. This ratio helps determine how reliable an insurer is. If an insurer has a CSR of 97% or higher, it’s considered trustworthy. On the flip side, be cautious of insurers with a CSR below 80 or above 100. A CSR above 100 often indicates delayed claim settlements, which have been carried over from previous years.
| Years | HDFC Life Insurer | Industry Average |
|---|---|---|
| 2021 - 2022 | 98.66% | 97.39% |
| 2022 - 2023 | 99.41% | 98.20% |
| 2023 -2024 | 99.54% | 98.78% |
| Average (FY 2022 - 2024) | 99.20% | 98.09% |
Insight: HDFC Life’s CSR is better than the pre-set benchmark of 97%, and the numbers have only gotten better over the years. This is a promising start. However, please remember that while CSR is a crucial metric in determining the credibility of the insurer, it isn’t the only factor to be considered when you choose a term insurer.
- Amount Settlement Ratio (ASR): The Amount Settlement Ratio (ASR) of an insurer shows how much of the total claims filed in a year were actually settled. If the ASR is above 90%, it’s considered excellent for life insurance providers. This high ratio indicates that the insurer is likely to handle future claims well, which is especially reassuring for policyholders. After all, term insurance plans are long-term commitments, and you wouldn’t want to rely on an insurer who might fail to settle your claim when you need it most, especially during a tough time like losing a family member.
| Years | HDFC Life Insurer | Industry Average |
|---|---|---|
| 2019 - 2020 | 92.60% | 90.90% |
| 2020 - 2021 | 80.10% | 91.00% |
| 2021 - 2022 | 89.40% | 89.90% |
| Average (2019 - 2022) | 87.30% | 90.60% |
Insight: HDFC Life’s Amount Settlement Ratio is slightly lower than the 90% benchmark, which might sound concerning at first glance as it indicates that the insurer’s claim settlement potential is subpar. However, we feel this is evened out, considering HDFC ERGO’s mammoth business volume.
- Complaint Volume: HDFC Life stands out as an excellent choice for term insurance, and a good way to see this is by looking at its complaint volume. Most of the complaints are about issues like delayed claim settlements or claim rejections. This gives you a clear idea of how efficiently the insurer operates overall.
| Years | HDFC Life Insurer | Industry Average |
|---|---|---|
| 2021 - 2022 | 3 | 86.9 |
| 2022 - 2023 | 2 | 88.2 |
| 2023 - 2024 | 1 | 70.1 |
| Average (FY 2022 - 2024) | 2 | 82.33 |
Insight: HDFC Life has significantly reduced its complaint volume over the years. This can mean improved customer satisfaction, better complaint resolution processes, or a combination of both over the years.
- Average Annual Business Income: While this isn’t exactly a direct measure of an insurer’s credibility, looking at their annual business volume helps you understand the size of the insurer and its potential client base. Since you’re trusting the insurer with a significant coverage amount, it’s a good idea to choose a medium- or large-sized provider with a solid client base. This usually indicates the insurer’s credibility and a strong track record in the industry.
| Years | HDFC Life Insurer | Industry Average |
|---|---|---|
| 2021 - 2022 | ₹24,154.8 | ₹4,428.3 |
| 2022 - 2023 | ₹28,683.1 | ₹5,720.8 |
| 2023 - 2024 | ₹29,631.0 | ₹5,700.2 |
| Average (FY 2022 - 2024) | ₹27,489.7 | ₹5,343.21 |
Insight: Considering how HDFC Life is one of the oldest private life insurance providers in the industry, such high business volume is not exactly surprising, but it is surely reassuring.
What are the Best HDFC Term Insurance 1 Crore Policies?
- HDFC Life Click2Protect Super: This plan offers a great exit perk with an in-built terminal illness benefit. It comes in three options:
- Life: With this option, the sum assured is paid out as a lump sum if the policyholder passes away. It also includes a terminal illness perk, which means the sum assured is paid out if the policyholder is diagnosed with a terminal illness and has only a few months to live.
- Life Plus: This option includes the death benefit and terminal illness perk, plus an Accidental Death Benefit. If the policyholder dies due to an accident, the nominee gets an additional amount on top of the base sum assured.
- Life Goal: In this option, the sum assured on death changes each year, based on the Amortisation Rate or Level Cover Period, which the policyholder selects when starting the plan.
The policy also offers some of the best riders in the industry, including:
- Waiver of Premium on Critical Illness
- Return of Premium
- Waiver of Premium on Total and Permanent Disability
- Spouse Cover Option
- Option to adjust premium frequency
- Option to switch from regular to limited premium payment term
- Renewability Option at Maturity
- Life Stage Option
- Death benefit as an instalment option
Since the premium difference between Click2Protect Super and Click2Protect Life is small, and the Super option provides several additional benefits, it’s usually a better choice to go with the Super plan. (details of these two plans are mentioned below.)
- HDFC Life Click 2 3D Plus: This is one of the most comprehensive plans available, with 9 plan options:
| Life | 3D Life | Extra Life | Income | Extra Life Income | Income Replacement | Return of Premium | Life Long Protection | 3D Life Long Protection | |
|---|---|---|---|---|---|---|---|---|---|
| Death Benefit | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ |
| Terminal Illness | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ |
| Accidental Total Permanent Disability |
✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ |
| Accidental Death | ❌ | ❌ | ✅ | ❌ | ✅ | ❌ | ❌ | ❌ | ❌ |
| Waiver of Premium due to Critical Illness | ❌ | ✅ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ✅ |
| Return of Premium |
❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ✅ | ❌ | ❌ |
The scope of customisation is extensive, considering it includes almost all the value-worthy riders ranging from
- Critical Illness,
- Terminal Illness,
- Waiver of Premium,
- Return of Premium,
- Regular Income Benefit
- Life Stage Benefit
- Top Up option
Needless to say, such a diverse list of features doesn’t come cheap. But if you are looking for a term insurance plan worth its price, this is it!
- HDFC Life Click 2 Protect Life: With coverage options ranging from ₹25 lakhs to ₹2 crores, this policy from HDFC Life is one of their most popular plans. It offers several variants, including Life & Critical Illness (CI) Rebalance, Life Protect, and Income Plus.
What really stands out about this plan is the wide range of riders available, such as:
- Income Benefit on Accidental Disability Rider
- Critical Illness (CI) Plus Rider
- Protect Plus Rider
- Return of Premium (ROP)
- Waiver of Premium on CI
- Accidental Death Benefit (ADB)
- Option to adjust premium payment frequency
- Option to switch from Regular Pay to Limited Pay
These options give policyholders plenty of flexibility to customise their coverage. While the plan might be on the pricier side, the features it offers make it worth considering. It's a solid choice if you're looking for a term insurance cover of ₹2 crores or less (you can figure out your ideal cover with our free term calculator).
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