Life is full of ifs and buts. We do not know what is going to happen in next minute. IF a child, a life partner or a parent depends on you and your income then you need Life Insurance.
What is “Term Life Insurance?”
Term Life insurance is a type of life insurance policy that provides coverage for a certain period of time, or a specified “term” of years. If the insured dies during the time period specified in the policy and the policy is active – or in force – then a death benefit will be paid. It is the cheapest from of Life insurance in terms of premium.
Online Term insurance Plans are,
- Cheaper than conventional plans like money back life insurance or endowment plans (or) offline term plans . Online term insurance plans are roughly 30-40% cheaper than the offline plans.
- The entire application submission process happens online through the company’s website. So, it is hassle free.
- You may not be influenced by an agent/advisor during the buying process
Comparison of the best online term insurance plans in India:
Premiums in the above table are for a healthy 30 years male,non smoker,Sum Assured of Rs 50 Lakhs and for a term of 30 years.
(Read my article – “Top 7 Best Online Term Insurance Plans in India for 2015.” This article has details on latest claim settlement ratio, premiums and features of best online term insurance plans)
Points worth to consider before buying online Term Insurance:
- On an average, every five minutes somebody buys an online term insurance plan in India.
- Life Insurance Corporation (LIC) has recently launched its online term insurance plan e-Term plan
- Choose the policy duration based on your current age and preferred retirement age.
- Do not opt for a online term insurance plan just because the quoted premium is very low.
- Go through the claim settlement history of the life insurance company. LIC , ICICI Prudential, SBI Life, HDFC Life, Kotak Life have claim settlement record of over 90%. Low premium rates make some people feel that there is a catch in the policy terms and claims might not be honored. There is no mystery behind the low premiums of an online plan. Premiums are low because there are no intermediary involved.
- Opt for riders like Accident Death Benefit if they are available along with the basic sum assured. ICICI Prudential,SBI Life, Max Life and Reliance Life offer Accident Death Benefit rider. The sum Assured for the rider will be the basic sum assured or Rs 50 Lakhs whichever is lower in case of ICICI and SBI Life. In case of Max Life and Reliance the maximum is Rs 1 Crore.
- Kotak Life’s e-Preferred Term plan offers “Step-up” feature. It guarantees you additional insurance cover at certain important stages in your life. You can increase your sum assured without having to undergo any medical examination. You have to pay fees to avail this option. The plan also offers “Step Down” feature.
- SBI Life’s eShield offers “increasing cover” option. If you opt for this then the sum assured will automatically increase by 10% after every 5th policy without increasing your premium.
- Bajaj’s iSecure plan offers Joint-life option. If you choose this then you will have the flexibility to include your spouse to the policy. If you are single now then you can include your spouse to the existing policy at a later date. The death benefit is payable on death of each life. On death of any one life assureds, the policy will automatically continue on the surviving life assured with a reduced premium.
- Customer service factor is very important if you are buying online. Because, you would be completing all the formalities by yourself while applying and also in future.
- The major disadvantage with online term insurance plans is “lack of riders” like Accident Death Benefit (AB), Critical Illness (CI) and Total Permanent Disability benefit (TPD).
Whether you are buying your Term policy online or offline, the cover and claim settlement is predominantly determined by the authenticity and accuracy of information that you would be providing. Do not hide any facts regarding medical condition, pre-existing diseases etc., Also, make sure you inform your policy details to your dependents or spouse or nominee.
In a nutshell, Term Insurance is one plan that fulfills all your Life insurance needs.
Do this exercise :
Kindly total up the sum assured amounts of all your Life Insurance policies (if you have). Check if the total sum assured amount is sufficient enough to meet your family’s financial needs in case of any unfortunate event. If it is not sufficient then buy Term Insurance immediately.
(You may like visiting my post on “ How to get rid off bad insurance?”) (Visit my popular post on “Latest Claim Settlement Ratios (2013-2014) of all Life Insurance companies.”)
Hello Sir,
After going through your post, I called Max life insurance company to buy there online term plan.
Below are my details, to my surprise, the person on the phone informed me that I do not required to go for any medical test and can buy the plan directly after paying the premium amount.
My worry is, if they are not doing any medical tests now, do you think there are any chances they may reject the claim in future because of this reason?
Please provide your inputs on the same.
Age:- 29
Cover period:- 30 years
Cover:- 1 cr.
Insurance company selected:- Max life insurance
Non-Smoker
Thanks,
Paritosh Maithil
Dear Paritosh,
My suggestion would be to take a term plan from a company which asks for Medical tests 🙂
Thanks for your reply Sreekanth.
I went with your suggestion and opted to go for ICICI term plan. Before buying the same I asked them what would be the complete process to get the plan. As per them, once I pay the online premium based on what cover I have selected, their team will decide whether I need to go for any medical test or not.
Now my query is, what if they come back and say that medical test is not required. should I cancel the policy or is it fine to go with them as they have taken the decision based on the details I had provided.
Sorry to bug you with the same query again and again but this is getting really confusing as whatever I have read online, a term policy without a medical test is a bit risky and I don’t want to take that risk.
Please help me with your suggestion.
Thanks,
Dear Paritosh,
Kindly check with them if you can submit a Medical report voluntarily with them, in case if medical test is not suggested by them.
Dear Shreekanth Reddy,
I am planning to take term plan and go through various companies but according to me, MAX LIFE is good as it’s premium is very low and claim settlement ratio is nearer to 94 %. while others are slightly high with the same claim settlement ratio. so i just want your suggestion that should i go with MAX LIFE ?
Dear Rakesh,
If it meets your requirements, you may kindly go ahead.
Do provide the required info in Proposal form accurately and honestly.
31.10.2015
Dear Sreekanth
A very good afternoon to you and all our blog readers!
As I said earlier, I have purchased
1) Online term insurance, “HDFC Click2 Protect Plus” for 55 lacs,
2) Stand alone Personal accident policy for 50 lacs from “Apollo Munich”
3) Super top up mediclaim policy for 10 lacs with 1 lac deductible from “Apollo Munich” beside my company’s group medicliam policy for 2 lacs.
I would like to share my experience with the Companies while purchasing the policies, so that it will be useful for other readers.
1) Apollo Munich’s services are very very good, with one single personal meet at my home, just within 7 working days, I have received Policy document in hand both soft copy by email and hard copy by post. and
2) HDFC Life Insurance company, for my term life insurance, they have taken 45 days to issue a policy though it was purchased “ONLINE”. For each and every email communication, they took 3-5 working days to respond, acknowledge or confirmation whatever the communication is.
As I am 41 years old, as I mentioned “Hypothyroid and heavy snoring” in my proposal form, they have advised me to undergo medical checkup at their prescribed diagnostic centre, I have under gone. Further, they have loaded me with 90% extra premium.
Even, they have reduced my sum assured amount from 75 lacs to 55 lacs.
My over all experience with HDFC is “Very good” though it is delayed and loaded with extra premium, but they have taken all required steps, so that, I believe, when ever claim is required, my family members may not face any difficulty in claiming process.
Dear Sreekanth, Thank you for your advises through your blog, which were helpful for so many lakhs of people like me while taking such big decisions.
I would like to post the same info in your 2 – 3 relevant articles, which will be helpful for all other readers.
It is good to see that you have relocated to Proddatur, so when I visit my native place Kadapa, with your prior confirmation I would like to see you.
Thank you
Krishna KP
Dear Krishna,
I am very happy to know that ReLakhs.com helped you in making financial decisions 🙂
Thank you so much for sharing your real-life experiences with the financial service companies.
Which option under HDFC Click2protect plus did you take?
By the by, we can surely plan to meet 🙂
Term insurance and life insurance how many time Sum assured ?
my income 5 lakhs p.a i have 1cr cover online term insurance
i want to more 2 cr sum assured any idea
Dear Feroz,
I am not very sure if you can get Rs 2 cr more as SA. Kindly check with your life insurance co about your eligibility.
(SA is dependent on your income, age, tenure etc).
Hello Sreekanth,
I am 32 and working abroad and having a useless medical insurance given by employer .
i wanted to buy e-term policy and visited LIC and found NRI’s are not being covered by LIC-Term policy
would you please help me to find any other term policy which can give life to me
Dear Sreekanth
If I request you to suggest me directly
1) one policy name for stand alone PA Policy,
2) one policy name for super top up and
3) one policy name for stand alone Critical illness policy, what will you suggest.
I will be waiting for your reply. Thank you
Dear Krishna,
It is very tough to pick one without knowing your requirements and profile.
Suggest you to go through my articles and decide for yourself.
Best Personal accident policies
Best Super Top up plans.
Critical illness plans – to be frank, I have not yet done thorough research. Will let you know soon.
03.09.2015
Dear Sreekanth
A very good morning and Thank you so much for your reply.
I will be going through your articles before making any financial decision from here afterwards.
Great job by you, Keep it up!
Dear Sir,
Please guide me on this one. I have one Jeevan Ananad policy of LIC of India for SA of Rs.5,00,000/- wherein i pay annual premium of Rs.40,000/- (i pay quarterly Rs.9831/-) and one more ULIP with Birla Sunlife Insurance of which i am not sure of the SA but the premium is Rs.6,020/-. Both are bought under obligations of an agent being my immediate family. I know these are not able to cover my life risk. So i now want to make direct purchase of cheap, realiable term policy which are hassle free to claim on maturity (God Forbid!). My age is 31 this September and annual income is Rs.7.5 lakhs and i am single.
I want to purchase one term policy to cover my life risk and one more mediclaim health policy, which is believe is necessary these days given high hospital costs. Also are there one single policy which covers both life and illness.
Regards
Dear Raghu,
Life insurance – Do you have any family member(s) who is financially dependent on you?
Health insurance – Take a stand-alone health insurance cover. Check out the plans offered by Max bupa.
Dear Srikanth,
thanks for an educative article. much appreciated.
Hello Sreekanth,
So you advice taking a basic online term plan and also take a separate Personal Accident insurance cover (stand alone policy). Can you please provide more information about Personal Accident insurance covers (stand alone policies)? Do they provide critical illness and permanent disability benefit which are missing from most online term plans? Which of them are best in industry? can we buy them online too?
Thanks for your feedback.
Dear Saurabh,
Generally PA policies do not cover Critical Illnesses, for that you may have to buy CI plan separately.
Check out this PA plan : Apollo Munich – Individual Personal Accident Premium Plan
Dear Sreekanth, I am planning to take a Life insurance of HDFC Life Click2Protect Plus for a Sum assured of Rs 1 crore for a period of 40 years which has a premium of around Rs 8,000 p.a. My current age is 22 years.
This premium is for a basic cover without any Accidental Death Benefit and other riders.
I am planning to buy through Policy Bazaar.com as they assist in terms of any issues faced.
Please guide with your inputs as to the:
(1) Option selected by me w.r.t. sum assured and riders
(2) Purchasing through Policy Bazaar a worthwhile option or not.
Dear Sanchit,
Suggest you to go direct. You may take the policy from HDFC Life itself (if comfortable).
Basic term plan is fine. Bud do consider taking a separate Personal Accident insurance cover (stand alone policy).
Sir,
Good day to you..
Can I make term insurance from two companies (SBI and LIC)? is it possible to do so? if it can be done how difficult would be the claim settlement for my nominee?
And also please suggest me whether I can opt for single premium or yearly premium.. I can afford to pay single premium..
Regards,
krishnakumar
Dear Krishna,
You can take two policies from two different companies. But, i believe it is not required.
You may consider to take two policies from the same company itself.
Suggest you to go with YEARLY mode, so that you will always have the option to discontinue the policies in future.
Read below article, it has FAQs on Term insurance plans.
Top 7 best online term insurance plans.
Dear Sreekanth, please tell me your suggestion regarding opting idbifederal for term plan. My annual pay is 5L. Age 32 yrs. Retirement age 60 yrs. Two daughters 5 & 2 yrs of age. If not idbifederal, which one shall I opt . How much and suggest period for the same
Dear Archana,
Any company should be fine in terms of claim settlement (if any), as long as you provide complete and accurate details in the Proposal form.
Sugget you to go through my articles:
– Top 7 best online term insurance plans
– Latest Claim settlement ratio details
– Calculate how much to save for your Kids’ education goals
As of now has any insurance companies, come out with the riders in Term Insurance.
Will there be any difference in yearly premium between online and offline policies.
You have stated that SBI Life offers increasing cover option every 5th year, so will there be medical checkup every 5years.
Dear Mr Moorthy,
Online term plans do offer Riders, especially for “Accident Death benefit”.
But you may find lot of other riders available with Offline Term insurance plans. Do check out SBI Smartshield. It offers Accident death benefit, Critical illness and Permanent Disability Riders.
Online plans are cheaper than offline ones, as no intermediaries are involved in the buying process. I believe no medical checkup is required once the policy is issued.
Hi,
I and my husband are both 27 yrs old (both are earning) and planning to invest in a term life insurance. I would like to know if the premiums paid for any term insurance can be considered under 80C or are there specific life insurance plans whose premiums are considered under 80C?
Dear Josh,
Yes, premiums paid towards term insurance plans are eligible for tax deductions under section 80c. You may read my article “Top 7 best online term insurance plans“.
Sir plz tell me my age is 28 at present working in bank want to buy online term plan sum assured would be 50 lac to 1 crore best plan for me would be?
Dear Amit,
Kindly read my article – “Top 7 Best online term insurance plans“.
i have two postal life insurance policies (PLI) with 75000/- per year towards premiun. my age is 33y, & I have 2yr old girl. what should I do now, can I take
1.online term insurance if so in which policy
2. sukanya samrudhi account in her name
3.ELSS or 0ther tax saving mutual funds ( ICICI people told me to take MAXIMISER
FUND for min 5 yrs for both tax savings as well as good investment, they told it will
be doubled by 5 years @ 20% returns, is it true
4.I want to invest in mutual funds & share market also, for that I what sholud I do, the
procedure, in which funds I have to invest, to whom I have to approach, can it be
done online
expecting good reply for all my querys soon, thank you
Dear Chandra,
What is the total sum assured of PLI policies?
1- Yes, take good online term plan. Read my article on “Top 7 best online term plans.”
2- Have you made any other investments under Section 80C? You can consider investing a portion of your savings in SSA scheme
3- Do not invest in ICICI Maximiser. It is a Unit Linked Insurance plan and not an ELSS Mutual fund. Ask them in writing that the investments will be doubled in 5 years. Just, ignore them. ELSS funds are good investment tools. But you have to stay invested in them for atleast 10 years. Read my article on “Top ELSS Funds.”
4 – Start with mutual funds. You can open demat accounts with online distributors like ICICI Direct or fundsindia.com . Read my post on “MF Utility” , you can soon use this online platform to invest in MFs (it is free of cost).
but term insurance does not pay me any thing back… that means if i dont die within the policy years all my hard earned money would be wasted…????
Nilanjana – How can one be so sure that no unfortunate event may take place in future? Investing in endowment or money back policies are one of the ways to get your wealth eroded. If you want to protect your loved ones’ future then go for term insurance.
“You purchased an umbrella, in anticipation of rain. The rain did not happen at all, w’d you go back to shopkeeper to return the umbrella and get back the money spent on Umbrella?
Actually, this is the ONE & ONLY INSURANCE required for every earning individual to take care of the family. No other traditional life insurance policies are required i believe. The problem with Indian thinking is that when they pay something for, they expect returns on that.
Sorry to say that most of them are unable to distinguish between INSURANCE and INVESTMENT. Such people need to be educated in this regard.
Rightly said. Thank you.
Thanks for the info it is helpful
Hi Sagar. Thank you for the comments and subscribing to the blog. Please share this information among your friends. It might be useful to them too. Cheers!
I was not aware of online insurance policy availability, its good to know that we can subscribe insurance online too and avoid agent fees and get a lower price. It would be great if companies add the riders which you mentioned were missing in online plans, even if premium is higher.
Hi Nagavaeni. Thank you for the comments. We may soon see life insurance companies coming up with Riders too.
very good information Srikanth 🙂
Thank you Sudesh. Plz share this information among your friends. Cheers!