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.”)