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Best Term Insurance Plans

Term Insurance Plans
Term Insurance Plans

One of the most common query from my readers is regarding Best Term Insurance Plans in India. In past i wrote an article on 5 Points to consider while buying Insurance Policy. In continuation of this post, recently i bought online term insurance plans for myself and thought of sharing my list of best term insurance plans based on my research, analysis & study. I will try to keep this post very simple and easy to understand. Before you buy term insurance plans it is important to do basic groundwork. I adopted theory of exclusion rather theory of inclusion for selection. I feel that theory of exclusion is more critical and analytical for selection. Its like evaluation of shortlisted plans on critical parameters in order of priority  and reject the plans which does not fulfill the criterion or score low on critical parameters. This method is more scientific and widely accepted. I considered following criterion’s for shortlisting to select the best term insurance plans in same order of priority

1. Claim Settlement Ratio

My first & most critical criterion for shortlisting was Claim Settlement Ratio. I was not able to thought of any other criterion for selection of best term insurance plans. Based on the data released by IRDA, i shortlisted following 6 Term Insurance Providers with claim settlement ratio of more than 90% which is considered to be very good. Claim Settlement Ratio for each insurance provider is mentioned in the bracket

1. LIC (97.73%)

2. ICICI Prudential Life (96.29%)

3. HDFC life (95.76%)

4. SBI Life (94.41%)

5. Max Life (94.25%)

6. Kotak Life (92.04%)

The life insurance claim settlement ratio of these 6 insurance providers was more than 90% during FY 2012-13. As i keep highlighting that claim settlement ratio is one of the most crucial and important criterion to select best term insurance plans therefore this was 1st criterion of shortlisting.

2. Online vs Offline Term Insurance Plans

Online term insurance plans are much cheaper compared to offline term insurance plans. Its a biggest misconception that online term insurance plans lack in features and benefits. Let me assure you that features and benefits of both online and offline term insurance plans are same therefore i prefer online term insurance plan because of lower cost & convenience. As insurance provider incur low cost on online term insurance plans therefore pass the benefit of low premium to customers. As all six shortlisted insurance providers offer online term insurance plans therefore there was no exclusion on 2nd parameter. Final shortlisted online Term Insurance Plans were

1. LIC’s e-Term Plan

2. ICICI Pru iProtect Term Insurance Plan

3. HDFC Life Click2Protect

4. SBI Life eShield

5. Max Life Online Term Plan Basic Life Cover

6. Kotak e-Term Life Insurance Plan

 3. Market Share of Insurance Provider

In my opinion, Market Share shows the confidence level of a customer in particular company. Same holds true for Life Insurance. India Brand Equity Foundation release Market Share of major insurance providers based on total life insurance premium collected. The latest available data is of FY 13 and market share is mentioned in the bracket

 1. LIC (73%)

2. ICICI Prudential Life (5%)

3. HDFC life (4%)

4. SBI Life (4%)

5. Max Life (2%)

6. Kotak Life (NA i.e. Clubbed in others)

Market share of LIC is miles ahead of private insurance providers due to legacy factor. Unfortunately i had to drop Kotak e-Term Life Insurance Plan on this parameter as Kotak Life scored lowest in terms of market share. Rest 5 shortlisted plans moved to next level.

4. Premium of Term Insurance Plans

In term insurance plans, the Return on Investment is NIL and it is purely a life cover therefore premium is one of the critical consideration before you buy term insurance plans. I will not quote any no’s because premium is variable and is dependent on the age & other lifestyle habits of a person. I am a non-smoker and follow healthy lifestyle habits therefore i will conclude based on premium quote received by me. Any arbitrary example may bias the readers. On this parameter i dropped LIC’s e-Term Plan and ICICI Pru iProtect Term Insurance Plan from my list as these are 2 costliest online term insurance plans.

In my opinion, LIC can lower the premium for online term insurance plan which is very high as of now. As we know that due to pressure from conventional channel i.e. LIC’s direct selling agents, LIC delayed the launch of online term insurance plan. In order to keep large pool of agents in good humour, the premium of online term insurance plan is kept high so that offline plan can remain relevant and competitive.

For my case premium of LIC’s e-Term Plan was almost 2.5 times the lowest premium quote for same term cover. Premium of ICICI Pru iProtect Term Insurance Plan was approx twice the lowest premium quote therefore i dropped these 2 costliest plans. After this stage, Top 3 finalists in the race for Best Term Insurance Plans were

1. Max Life Online Term Plan Basic Life Cover (Lowest Premium)

2. HDFC Life Click2Protect

3. SBI Life eShield

5. Parameters ignored

While finalizing Best Term Insurance Plans i ignored following parameters for shortlisting

(a) Policy Term: Each insurance provider has different rule. HDFC Life & SBI Life offered coverage till the age of 65 years whereas Max life policy term is upto 70 years. I don’t consider it as imp selection criterion as i feel that any person needs insurance coverage max till age of 60 years as all family duties are discharged by this time.

(b) Riders: I ignored riders like Accidental death benefit, critical illness cover etc which are clubbed with term insurance plans. I only covered basic life cover. In my opinion, each policy has different objective and should be bought separately.  Product bundling is offered with lot of ifs and buts. I will buy separate Accidental death cover or Critical illness cover if the need arises. For now, i only focused on basic term insurance plans.

(c) Innovative Bundled Products: You may find lot of innovative products like increasing cover or monthly income plans clubbed with basic term insurance plans. These products are good & offer “all in one” solution but also increase premium. These products are suggested depending on specific requirement. In my case, i only considered basic term insurance plan with uniform cover during policy term.

7. Sum Assured & No of Policies

This is most tricky part in whole process. You need to decide sum assured & no of policies you should opt for. In my opinion, Sum assured should be equivalent to 10-15 times of current annual income. Instead of opting for increasing cover term insurance plans, you can opt for additional policy in future as and when income levels increase. It will not burden your pocket today. Assuming, your current annual income is 15 lakhs then you may opt for sum assured of between 1.5 Cr to 2.25 Cr.

After finalizing sum assured, you can decide to opt for single or multiple policies. If sum assured exceed 1 Cr then it is always advisable to opt for 2 policies. For higher sum assured, you may opt for max upto 3 policies. Reason being unlike western countries where insurance providers comfort families at the time of distress by clearing insurance claims in no time. In India, insurance providers try to find reasons to reject claims. Insurance provider cannot be blamed 100% because people tend to conceal facts intentionally or may be unintentionally at the time of availing policy which lead to claim rejection. In my opinion, instead of putting all eggs in 1 basket its better to hedge risk by opting for multiple policies with lower sum assured. For fixed sum assured, the premium of 2 policies will be higher compared to single policy with same sum assured but it will reduce probability of claim rejection. Term Insurance Plans are waste if claim is not processed during the need of the hour.

8. Health Check-up

Last but not the least and deciding factor of Best Term Insurance Plans is Health Check-up / medical tests. Human Body is just like a machine and very unpredictable. Many times we are not aware of ailments or illness. As as customer i will feel happy if medical test / health check-up is waived off but please understand that in case of any unfortunate event, Health Condition at the time of policy application can be deciding factor for claim settlement. Most of the claims are rejected only on the basis of non-disclosure of health conditions intentionally or may be unintentionally from customers end. Many insurance providers waive off medical tests / health check-up for policies of upto 75 lakhs based on underwriting and risk assessment.  This is USP for such term insurance plans but in my opinion, it is always advisable to go for health-up / medical tests. If the policy is issued after health check-up / medical tests then insurance provider does not have any excuse to reject the claim in future on the basis of non-declaration / concealing health condition.

HDFC Life Click2Protect & SBI Life eShield waive off medical tests / health check-up for sum assured of upto 75 lakhs.

Final Verdict: Considering all the above mentioned parameters and criterion’s, in my opinion among all online term insurance plans available in the market THE BEST TERM INSURANCE PLAN is

Max Life Online Term Plan Basic Life Cover

Runner Up is HDFC Life Click2Protect

2nd Runner Up is  SBI Life eShield

If you are opting for multiple policies then you may opt in same order of priority.

Word of Caution: In case you are opting for more than 1 policy then it is very important to inform other insurance providers regarding the same. Please note that insurance claims are rejected only when it is proved that insured person has concealed information / facts / health condition intentionally or declared false information or the claim was fraudulent. It is important to provide correct & factual information while applying for term insurance plans.

Disclaimer: I have personally subscribed to all the 3 plans suggested / recommended by me in this post as top 3 term insurance plans i.e. Max Life Online Term Plan Basic Life Cover, HDFC Life Click2Protect and SBI Life eShield. This post is written based on research, analysis & study done by me while finalizing the online term insurance plans suitable for my requirement. Readers are requested to seek independent and expert opinion before finalizing offline/online term insurance plans based on their individual requirement. I do not take any liability for any decision taken by the readers only based on information shared in this post. This post is my personal interpretation of term insurance plans. By accessing and browsing this post you accept, without limitation or qualification, the “Disclaimer” of this blog.

Copyright © Nitin Bhatia. All Rights Reserved.

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nidhi
nidhi
9 years ago

thank u for yet another very informative blog. which, in your opinion, is the best insurance cover for insuring an apartment against any eventuality.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  nidhi

Thanks for liking the blog !!! Although i have not compared Home Insurance plans but based on benefits attached i feel ICICI Lombard Home Insurance is good to go.

nidhi
nidhi
9 years ago
Reply to  Nitin Bhatia

thank u once again for your valuable suggestion.

Nitin Bhatia
Nitin Bhatia
9 years ago

The process was very smooth and easy. My experience was good with all 3 insurance providers i.e.Max Life, HDFC Life and SBI Life.

Bharathidhasan
Bharathidhasan
9 years ago

Hi Sir,
Can we get tax benefit for taking term insurance?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Bharathidhasan

You can avail tax deduction u/s 80C for Term Insurance premium subject to max limit of 1.5 lakh.

Bharathidhasan
Bharathidhasan
9 years ago
Reply to  Nitin Bhatia

Thank You Sir..!
All the information in your blogs are more informative and essential of life. Hats off..! Keep rock..!

Sourabh Potdar
Sourabh Potdar
9 years ago

Hi Nitin… Read this post and did a bit of research. I currently have a pure term insurance from Aegon. As per IRDA, Aegon Religare’s claim settlement ratio (CSR) is quite low at just 67%. Frantically, I researched about Aegon. I checked the CSR of ICICI Pru, HDFC Life, SBI etc. when they had just started. For the initial years their CSR was also low. In my opinion, following are a few reasons for this trend:
1. The company is new and there is a high probability that the claim for a 2-3 years old policy is bound to have hidden causes that were not declared (hidden) before the policy was taken.
2. The CSR is calculated based on all the policy types of an insurance providers. Obviously, the bigger players such as LIC, ICICI etc. have been in the industry for many years as compared to smaller players such as Aegon. Hence, LIC will have a better CSR than Aegon.

Over the years, there will be more genuine claims and Aegon’s CSR will also become better.

Let me know your views.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Sourabh Potdar

Thanks for sharing your inputs but as layman, i have considered Claim settlement Ratio only as probability of success. Out of 100 claims received, Religare rejected 33 claim therefore probability of claim settlement is 2 out of 3. Religare compensate low Claim Settlement Ratio by charging very low premium therefore it is trade off between premium and claim settlement. As LIC has highest claim settlement therefore it is most expensive.

I concur with your points but at the same time high no of early claims is not good for financial health of insurance provider in long run and they should follow strict approval process instead of gaining market share.

Just to share with you that if insurance amendment bill is passed in winter session of parliament then Claim Settlement Ratio discussion will be irrelevant because in the insurance bill amendment there is a revision in section 45 that if policy is in force for more that 3 years then insurance provider cannot reject any claim under any circumstances even if policy was issued by sharing wrong information by the insured. I hope bill get passed as it is very beneficial but term insurance premium for new policies will increase manifold.

*Claim settlement considered by me is only of Life Insurance. Within Life Insurance, Term Insurance claim settlement may vary completely as claims are normally processed for money back, endowment plans etc without much hassle.

Pankaj Jain
Pankaj Jain
9 years ago

Very much informative article and thanks for taking pains all the while to put things in a easiest way. Keep up good work. God bless!

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Pankaj Jain

Thanks for liking the Post…

Vinesh
Vinesh
9 years ago

Great post. This is a ‘must read” article for all people who wants to take insurance. All readers of this article should Spread the knowledge you have gained with all your relatives and friends. Thanks Mr.Bhatia.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Vinesh

Thanks for your encouraging words..

Rajitha
Rajitha
9 years ago

Hi Nitin,
Thanks for the nice post it was really informative.
I was planning to buy the Max New York Term Insurance. But the reviews that I read on the ohter sites are really bad. I was taking this for my husband who is a smoker and Diabetic. The reviews suggest that after the medical check ups, they simply reject the policy after two months and then the struggle starts to get the refund of your money.
I am more cautious this time, as I previously did the same with HDFC click to protect and paid the premium too. But then they keep pestering for different tests and we finally decided to cancel the proposal. But its been a month (which its too short according to other reviews) but still not received the refund.
Please throw some light on this.
Thanks.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Rajitha

Normally if you disclose all the information correctly at the time of submitting proposal form, you will not face any problem. As i mentioned in my post that i bought all the 3 plans suggested by me. I did not face any problem and process was smooth. If your husband smoke and is diabetic, it is advisable to disclose the same and undergo medical tests as suggested by insurance provider.

In service industry you will not find 100% good reviews about any product.

AMRIK SINGH
AMRIK SINGH
9 years ago

Sir, My two sons aged 34years and 29 years are applying home loans of Rs.38 lakhs and Rs.28 lakhs each from HDFC Ltd. I want to get them policies of term life insurance plans for the same amount. I shall be grateful if you kindly let me know about the way I get the policies. How i will be available to deposit the first premium.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  AMRIK SINGH

Your sons can buy the policy online from the website of the insurance provider. They have to fill their own proposal form. I suggest you to deposit the 1st premium in their bank accounts. After that, they can make an online payment using either debit card or net banking facility at the time of policy purchase.

Satish
Satish
9 years ago

Detailed and very informative !! Excellent Post !!

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Satish

Thanks for liking the post.

b s sengar
b s sengar
9 years ago

sir, as the new inscurance act has passed and is there is any change in premiums.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  b s sengar

Insurance premium will increase for certain plans as under new rule, Insurance companies cannot reject any claim if the policy is in force from 3 years which will increase the cost of insurance companies. For existing customers, no need to worry.

Lokesh Dua
Lokesh Dua
9 years ago

Hi Nitin,
I finalized Iprotect from ICICI butafter going through your post, i am totally confused. Although i want to buy 2-3 policies in longer term also suggested by you. Should i go ahead with ICICI or should i buys HDFC or Max life.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Lokesh Dua

I cannot comment as it depends on your specific requirement. I will suggest the ones which i recommended in my post.

sunil kumar
sunil kumar
9 years ago

i thought of buying Max life term insurance for 1crore. It says additional rider options; Accidental death benefit of 35 lakhs. It says: incase of death due to accident, nominee will get the Sum assured 1 crore & 35 lakhs both. I hope, this is right. My question is: if have not opted for accidental death benefit of 35 lakhs & incase of death due to accident, how much will i get ? Will i get complete sum assured of 1 crore or no amount.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  sunil kumar

You will not get anything :). The nominee of your insurance policy will get 1 Cr.

Sandip
Sandip
9 years ago

Hi Nitin,

I am thinking to take term Insurance, with your valuble suggestion i will go for Basic Life Cover Term Insurance of Max Life.
I Drink some time. So Can You tell me If anything happen to me While Drunk Driving Case, Will Amount Pay to My family or Insurance company reject It.
Thanks In Advance.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Sandip

Insurance amount is not paid if it is found that insured person was drunk beyond permissible limit at the time of accident.

sushil singh
sushil singh
9 years ago

hi Niitin, i have taken home loan of 37.65 Lakh for 20 years,with Co applicant my wife. I wanted to insured loan amount. I have few questions related to it:

1. Which insurance plan would be best.
2.What will be the annual premium.

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  sushil singh

Please go through my post on this page. Premium depend on multiple factors. You can calculate on the website of a insurance provider.

Krishna
Krishna
9 years ago

Hi Nithin, Thanks for your post with detailed information. I have a basic doubt. After taking the Term policy in India, after some time we go to abroad and anything happens in abroad is that death covers under this policy or not?

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  Krishna

Term Insurance policy cover is valid outside India provided you inform the insurance provider in writing that you are moving out of India. Only exception is if you are moving to high risk country like Nigeria, Afghanistan, Burma or any other country specified as High Risk then your cover will cease to exist.

Savita
Savita
9 years ago

Thanks a ton! I bought online term policy as per your detailed and very informative post.
Thanks.

nilesh4java
nilesh4java
9 years ago

Hi Nitin, Thanks for the nice article.

I have a query, Can I trust Max Life Insurance??? I have not heard more about Max Life as much as I did about SBI. Is there a chance that 20-25 years down the line, Max Life Insurance will not exists as its a private company?? Can you put some light on this??

Thanks,
Nilesh

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  nilesh4java

Max Life Insurance is a joint venture between Max India Ltd. and Mitsui Sumitomo Insurance Co. Ltd. Max India is Indian multi-business corporate and Mitsui Sumitomo Insurance is amongst the top general insurers in the world.

Insurance industry is regulated by IRDA and is one the most tightly controlled and regulated sector. Even if the insurance company is closed, be assured that IRDA will ensure that the interest of the policy holders are taken care of.

nilesh4java
nilesh4java
9 years ago

Hi Nitin,

I have applied for Team Rider policy for Max Life Insurance covering 1 crore rupees for 35 years. Max Life Insurance says that there is no need to do Medical Test for 1 crore.

My query is –
1) Is it good to not do Medical Test? Because in future they should not reject claim saying you didnt tell us this and that. Although my lifestyle is healthy.
2) Or Shall I request them to get the Medical Test done?

Regards,
Nilesh

Nitin Bhatia
Nitin Bhatia
9 years ago
Reply to  nilesh4java

It depend on the risk assessment of their under-writing team. You can request for medical tests but if the insurance company is not willing to conduct then its fine. Moreover as per recent amendments in insurance bill, an insurance company cannot reject any claim after 3 years of policy commencement even if the policy holder got it issued fraudulently. In short, NO Claim can be rejected after 3 years.

Santosh Mandal
Santosh Mandal
8 years ago

Sir
Thanks for the valuable information. I have few queries as stated below are :-

1) I want to know that whether we can buy the term insurance as recommended by you after the sanction of loan or we need to opt it during the time of loan.

2) Also I am about to go for housing loan worth of 22 lacs from State Bank of Mysore / Canara Bank as told by the builder. Whether, I can take loan from any other bank is my choice ? And what hurdles might come in this process?

3) for 22 lacs considering my annual salary 9lacs approx, which term insurance plan for what sum assured I should do?

Please guide me

Thanks and regards
Santosh

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Santosh Mandal

1. You can buy anytime. It is for your own financial security
2. You may avail Home Loan from any bank of your choice. There are no hurdles but it is good as you will get access to all property documents.
3. It is not clear whether annual salary is 22 lacs or 9 lacs. Term Insurance should be 10 times annual salary.

ramesh
ramesh
8 years ago

one of the bank is insiting to include wife of him as co aplicant. is it mandatory.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  ramesh

No

Suneel
Suneel
8 years ago

Thanks for the detailed post Nitin, very helpful.

Suman
Suman
8 years ago

Dear Nitin Sir,

Good Day!
I own a flat at Kolkata and borrowing a home loan from SBI. I bought the flat on Nov, 2014.
Now today, SBI representative visits the flat and take my IT return and asking for the Flat Insurance paper.
Till now, I have no insurance for the said flat.
Is it mandatory to submit insurance paper and IT return to SBI?
can you suggest me the Insurance provider for the flat insurance?

Regards
Suman

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Suman

You may opt for ICICI Lombard property insurance. ITR or Form 16 is required but handover only to authorized bank employee. It may be subject to misuse.

Priya Mathur
Priya Mathur
8 years ago

Dear Nitin,

I am buying a govt. flat in Kolkata. I have applied for SBI Home loan. Now, at the time of sunction, the SBI person is asking for property insurance papers.
I told him, that, after completing the property registration, i will insure the property and will submit a copy to SBI. But his is not agree and delaying the load disbursement.

Please suggest, what to do.

Priya

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Priya Mathur

Before purchase you cannot insure a property.

Kundan Burnwal
Kundan Burnwal
9 years ago

Thanks for the post Nitin! I had done this research about 8-10 months back, and my findings were exactly the same as yours. I had to buy 1 Cr policy. I did research online. Finally, I bought 50 lacs coverage from Max Life e-Term plan (premium around 8000 per annum) for 30 years (my current age: 30 years). But I bought remaining 50 lacs from Tata AIA TROP plan, although their claim settlement ratio is around 85-86%. This was because I’m getting my basic premium refunded at the end of policy period (30 years). And secondly, I can forsee that my paying capacity now may be better than 20 years down. In Tata AIA TROP plan, I have the option to pay premium for first 10 years and get coverage for 30 years.

Glad that you put this out so comprehensively

N Patel
N Patel
9 years ago

thanks Mr. Bhatia. after getting inspired by your post and analyzing my personal requirement I have decided to buy basic term plan from Max Life. Just give me hint how was the processing of your policy after you paid. Was it smooth. please reply asap. thanks again.

Amit Patekar
Amit Patekar
8 years ago

Transparent to the point, simple to understand, informative and very helpful article on term plan, keep up the good work Nitin

Raj7rr
Raj7rr
8 years ago

Sir I want to take a home loan from Indiabull rohtak branch n at the last moment of my loan approval they told me that u must take a insurance policy anyway ur loan must be rejected.. Can I go to consumer court against them..plz guide me.because they cheat me .

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Raj7rr

You tell them that it is not mandatory and if they will force then you will return the same during free look up period.

Prashant Singh
Prashant Singh
8 years ago

Hi Nitin,

Let me start by appreciating your effort on helping others by your discussion. I would really like if can answer one of my queries as well. I was hoping to get one Term Plan, but my confusion is which one to go for. I am a bit circumspect to go for any of Private Banks as I really unsure of the their existence in the next 30-35 years(I am planning to go for 35 years) e.g. Max(I know it is one of the successful brand) but at the same time LIC (e-term) is having a premium for 18k (1 cr 35 years) which is way above the rest of them.

Needless to say if you can help me/us with more of your suggestion

Thanks,
Prashant

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Prashant Singh

All the insurance providers are governed by IRDA and IRDA ensure strict compliance. Even in highly unlikely scenario of insurance provider closing down, IRDA will ensure that interests of existing policyholders are taken care of. In my opinion, there is no reason to worry. As i mentioned in disclaimer on post that i have personally subscribed to Max Life Online Term Insurance Plan.

Rajiv
Rajiv
8 years ago

Hi Nitin,

Can you share the premium amount for Sum assurance of amount 50 lakh For the top three Insurance companies suggested by you.

My age:31 Years
Health Condition to be checked before buying term plan.

Planning for Basic Life cover term plan.

Can we get tax benefit under 80c in this investment.

Thanks,
Rajiv

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Rajiv

You will get tax benefit u/s 80C. For premium amount, you may check online on the respective websites of insurance provider.

Abhishek
Abhishek
8 years ago

Hi

I am 33yr old male non smoker

I have shortlisted 3 companies for a term plan of 40 yrs for a sum of 1cr

1)Kotak with claim settlement ratio of 92% and good solvency ratio and premium of rs.11736

Kotak has a consistent claim settlement ratio of above 90% for 3 consecutive years

2)PNB metlife with similar claim settlement ratio of Kotak and same premium of rs.11781

PNB is a big nationalised bank and Metlife is one of the largest insurance companies in the world

3)Aegon life with claim settlement ratio of 89% and premium of rs.11172

Aegon is in partnership with bennett coleman company which is a times group company

Aegon doesn’t have a very good claim settlement ratio in the past but by paying an additional premium of 500rs you can get a waiver of future premiums on discovery of critical illness.

Please advise which policy should I go for considering I am taking a policy for 40yrs based on the data available of a few years.

Thanks

Abhishek

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Abhishek

Claim settlement ratio is not relevant only for first 3 years of the policy. As per new rule, insurance company cannot reject any claim after 3 years. To answer your query, i will prefer Kotak e-Term Life Insurance Plan from the three plans shortlisted by you.

Ashish Sisodia
Ashish Sisodia
8 years ago

Hello Nitin, I am 29 non smoker. What I was seeing Aegon is the cheapest facilating with
Critical Illness/Accidental Death/Waiver of Premium/Terminal Illness. I want to take term insurance reason being is home loan people are asking. They have the claim settlement also of 90%. I want to take for 35lc for 20yers. Can you suggest me is it a right decision to go with them. One condition is they are not taking any medical test.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Ashish Sisodia

I will prefer either Max, SBI or HDFC as i shared in my post. You may opt for Aegon but i have not checked their term plan. I will prefer you to undergo medical test so that there is no reason for insurance provider to reject claim in future.

Ashish Sisodia
Ashish Sisodia
8 years ago
Reply to  Nitin Bhatia

Yes they are going to have medical test as i enquired from them. And can you please suggest me after having a look for Aegonlife. As u mentioned that Its a term insurance and we should find the best company with less premium and what i compare with for the above mentioned about they are almost 2/3 rd of other insurance company. And what i notice that other companys will not even for this much amount. So can you please have a look on this and give your valuable suggestion.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Ashish Sisodia

Please give me sometime. I will check and share my opinion.

Arijit
Arijit
7 years ago
Reply to  Nitin Bhatia

Please review and advise regarding AEGON Term Insurance. It has very low premium. Also, it has improved its Claim Settlement Ratio.

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Arijit

Personally i will not buy.

amiit gupta
amiit gupta
8 years ago

Hello Nitin ji can you put your valuable thoughts on Free Health card like IHO card,WizzCare , EasyLife Care,Sharak Healthcare etc.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  amiit gupta

I have not checked. Will definitely study and share my opinion.

Umesh Tiwari
Umesh Tiwari
8 years ago

Hi Nitin,
Firstly, thanks for the informative post.
My query – Suppose a term insurance is taken and then some disease is detected later on, say after an year. To minimise chance of rejection of claim in case of unfortunate event, is it advisable to communicate to the insurance company these diseases detected later?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Umesh Tiwari

It depends on multiple factors i.e. whether the disease is life threatening or not. If it is life threatening whether the insured underwent medical tests or not.

sanjiv kumar gupta
sanjiv kumar gupta
8 years ago

Hi Nitin,

I would really like to thank you for the guidance you are providing to the lame people who knows nothing regarding the financial planning & insurance. Please have some patience & go through my description. Now after reading the good things about a term plan I purchased an Online term plan of Rs. 75L from Max Life without any rider. I am a non-smoker & aged 35. Now the series of events that took place since I filled the proposal form & till the policy is issued. These are:

1. Date: 02/02/2016 – Filled the online form & made the payment without ticking anything on the history of my disease. Actually Till that time I was diagnosed with absolutely no disease/symptoms. Also I had mentioned approximate height & weight.

2. Date: 03/02/2016 – While going through the proposal form I realized that I was diagnosed with Jaundice around 10-12 years back. I informed Max Life immediately over the mail. They said it is fine. I insisted them to have my medicals but they said not required.

3. Date: 05/02/2016 – I visited a local doctor & got myself checked. I was diagnosed with High BP. Also I had my height & weight checked. I immediately informed MAX life over the mail that I am having high BP & also my exact height & weight. Max confirmed over the mail that my exact height weight & my declaration regarding BP has been noted in the back end, but proposal form cannot be changed.

4. Date: 08/02/2016 – Max informed that my medicals would be done on 11/02/2016.

5. Date: 11/02/2016 – Medicals conducted by the team who visited my home. Took some signatures on some papers & my id proof.

6. Date: 13/02/2016 – Policy documents received over the mail. While going through it I found that the proposal form is not changed at all which is embedded in the policy document. Also the medical reports submitted by concerned 3rd party vendor who examined me has given positive feedback for all reports. I had informed the medical examiner that I was diagnosed with High BP but he didn’t make a note of that in the paper. Now the scanned copy of the medical says that I was never diagnosed with any health issues, not even BP.

7. Date: 14/02/2016 – I mailed Max asking them to change the policy document since I was diagnosed with High BP few days ago & that same has not been noted anywhere in the proposal form/medical reports& statements.

8. Date: 16/02/2016 – Max replied me saying that It is not an issue and I will not face any issue while claiming. I was really pissed off and replied them not to be so childish since these claims will be only made when I am dead.

9. Date: 20/02/2016 – Max replied over the mail saying that they will issue a letter saying that my family will not face any issue in case of my unfortunate death since I have made all clarities & have declared them everything.

10. Date: 21/02/2016 – I have replied them saying that its fine since they will provide me in writing and also over the mail.

Now I am in dilemma should I trust Max, since they have done a blunder at their end in not taking care of all medical underwriting on the paper. What if I pay for my life cover for entire period & I remain still in doubt whether my family is really secured or not, since they might reject the claim later on various grounds. I am planning to cancel my policy since it is in free look period and purchase another term plan may be from some other provider. Please suggest.

Nitin Bhatia
Nitin Bhatia
8 years ago

Take a printout of all the email communication with max life and attach to your policy document. Also forward the same to nominee of your policy. I don’t foresee any issue in your case.

feroz
feroz
8 years ago

Hi Nitin,

I have 3 company for term policy for icici pru life,exide life and birla sun life

icici pru life – icare protect – 40 lakhs on 2011 for 5 yrs old without no medical test
exide life – my term insurance – 25 lakhs on 2013 for 2 yrs old with medical test
birla sun life – protect plus – 56 lakhs on 2014 for 2 yrs old with medical test

total premium 30000 p/m

today now i am overweight and hypertension so old policy close or not ? i apply new plan term insurance 1 cr with medical test underwriting any reject my conditions

My query is –

1) in case new policy issued old policy closed after with in 1 yr future they should not reject claim saying you didnt tell us this and that. Although my lifestyle is healthy.

Regards,
feroz

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  feroz

As per new guidelines, NO Claim can be rejected on any grounds if the policy is in force for 3 or more than 3 years. Therefore you need not worry. Secondly, any health concerns after the policy is issued will not impact the claim settlement process. I will not suggest you to buy new policy.

KIRAN KUMAR
KIRAN KUMAR
8 years ago

Sir, if we opt for medical test for online term policy of rs. 50 lacs (where waived by sbi life etc.), what s tje proceedure.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  KIRAN KUMAR

You can request SBI life to include medical tests for term insurance policy.

Akash gupta
Akash gupta
8 years ago

hello , Nitin sir,
I am a student pursuing law and i want to purchase a online term plan policy for my father who has aged about 50 years old..and he used to smoke and drink but from last 1 year he leave all these thing..
and my father income is 1.50 lakh P.a. so suggest me which policy should i buy for my father which is best for him….he is only breadwinner of our family.
please also suggest me good company.
my query is …

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Akash gupta

You may buy Online Term Insurance plan from Max Life.

Hussain
Hussain
8 years ago

In March 2016, I was looking to purchase a term policy and went through this article and decided to purchase HDFC Life Click to protect. I paid the premium in March and went through medical tests in first week of April. Then now on-wards I am literally begging to them through emails and phone calls to issue me the policy or at-least give me the status of my application. They are not providing any information. I feel humiliated and cheated. NEVER EVER BUY THE HFDC CLICK TO PROTECT to avoid the suffering….

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Hussain

You can complain to IRDA.

Ashish
Ashish
8 years ago

I am 28/M. My CTC is 9.2 lpa but actual lpa which I get after
deducting tax+pf+variable I got 7.8. I need to ask what should I fill in
Annual income section of proposal form ?

Also I am looking for 1 cr term plan for 35 years ( it will cover me
till 63 y of age) , could you suggest is it good to go beyond 60 y of
age

I am confused between Max life and Aegon. I insist you to kindly
pick one for me depending on your experience of such a nice advisor.

Also is it good to take additional cover of i-disability of Aegon ( if you choose Aegon)

Kindly suggest sir, I am really confused and worried.

Best Regard

Ashish

Ashish
Ashish
8 years ago
Reply to  Ashish

Kindly reply sir

There is correction sir my ctc is 9.2 lpa but after deducting
variable+insurance+food coupons I got 7.8 lpa ( including tax and p.f)

What figure I shall fill in annual income section?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Ashish

You may opt for Max Life online term plan basic life insurance cover without any riders. Please check disclaimer on this page. I have personally subscribed to Max Life Insurance. .

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Ashish

Annual Income is 9.2L.

Raghavendra Rao
Raghavendra Rao
8 years ago

Dear Nithin,

I would like to buy a term insurance of 50 Lakhs. I was just thinking how about splitting the term insuarance with 2 companies. I have the following doubts and it will be helpful if you can clarify it
1. Can one person have more than one term insurance policies?
2. In case of any eventuality , whether both the claims will be accepted ?

Thanks,
Ragahvendra Rao

Nitin Bhatia
Nitin Bhatia
8 years ago

1. Yes provided you have declared the same to other insurance provider.
2. Yes

Ragahvendra Rao
Ragahvendra Rao
8 years ago
Reply to  Nitin Bhatia

Thank you sir!

Rohan
Rohan
8 years ago

Hi Nitin,

First, I would like to thank you for this wonder full article about term insurance.
I am 28 years old and suffering from hypertension (High blood pressure) since 2 years.
I would like to buy a term insurance of 50 Lakhs. Please suggest a best term insurance for this situation and what would be the policy term (years)?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Rohan

I have shared the top 3 term insurance covers in my post on this page. You may go through my post. Normally the policy term is till the age of 65-70 years. You can declare your health condition in the proposal form.

Manoj
Manoj
8 years ago

My son is in B Tech 1st year, from second year till forth year – we have decided to avail education loan, which will be approx 8 Lakh, son is not having any income as of now, but PAN card is with him. I was searching for best term policy of 10 Lakh, but LIC is having minimum for 25 Lakh and that too is asking for income details etc, which are not available. Pls suggest best possible way out.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Manoj

You may go through the post on this page. I have shared some suggestions on best term insurance plans.

Manoj
Manoj
8 years ago

I would like to have few maturity options available for Jeevan Surkasha policy

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Manoj

1: To choose whether to withdraw 25%of the fund tax free and avail pension from the remaining or take pension from the entire corpus

2: To choose the type of pension
a. Annuity for Life- where pension is paid till the life assured is alive and nothing is payable on death
b. Annuity Guaranteed for Certain Periods- where pension is paid for 5/10/15 or 20 years as chosen whether the life assured is alive or not

c. Annuity with Return of Purchase Price on Death- pension is paid till the life assured is alive and the remaining amount of the corpus is paid to the nominee as death benefit

d. Increasing Annuity- pension is paid till the life assured is alive at an increasing rate of 3% p.a.
e. Joint Life Last Survivor Annuity- pension is paid till the life assured is alive. On the death of the life insured, 50% of the pension is payable to spouse as long as the
spouse if alive.

Amitabh Bhasin
Amitabh Bhasin
8 years ago

Dear Mr. Nitin,
Thanks for your good work. it really helps us a lot. I have applied for a home loan in HDFC, now they are asking me for a Home loan protection plan. for which I refused as I read your article stating it is not mandatory. and also it is very costly but bank is saying that as I am an NRI and based in high risk country I have to provide some additional security against loan. please advise me how to deal with it. is there is any online term plan which can cover my home loan.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Amitabh Bhasin

You may go through your copy of home loan agreement whether it is mandated “to provide additional security” against loan. If there is no such clause then you may ignore the noise.

At personal level, i feel that home loan should be covered with an equivalent amount of online term insurance plan. Preferably the term insurance cover should be 10 times your annual income.

Nilesh Divekar
Nilesh Divekar
8 years ago

Hi Nitin Sir,

Nice and simple information for those who are taking Home loan thanks for this,
I am taking 30 Lakh loan so is it ok if i buy Term insurance from LIC with same amount or need to increase the amount.
Brgds
Nilesh Divekar

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Nilesh Divekar

Ideally the terms insurance cover should be 10 times annual income. If you are buying only to cover home loan then you may go for 30L.

Mugesh Thakku
Mugesh Thakku
7 years ago

Hello Sir, Thank you for the detailed explanation, I have one doubt.. Say I am availing a term insurance policy now, and then later I am travelling to some abroad, If something unexpected happens to me in abroad, would this policy still valid and cover for me?

Please advise !!! Thank you very much in advance!!!,

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Mugesh Thakku

Most of the life insurance companies provide coverage outside India. Still you can check the same before availing term insurance plan.

Astha
Astha
7 years ago

Hi Nitin,
Appreciate your efforts for writing this article !! I have one query I hope you can answer the same.

I am 32 years old now and have taken Birla Sun Life term insurance plan of 50 lakhs 4 years back (June 2012), undergone medical test since medical reports are clear I was issued the policy. Since Jan 2013 I started smoking and still a smoker now I have worry since I am planning to increase my life cover to 1 crore so please guide what are the options for me :
1) Continue this policy s completed since already 4 year [as per new rule now insurer can’t reject my claim] and take addition cover of 50 lakhs from some other provider and inform the new company about my previous term plan cover. I am thinking that it will be contradict since for one policy I am non smoker and for another I am a smoker.
2) Close the old policy and take a new policy of 1 crore by declaring myself as a smoker , in this scenario premium paid by me will be 4 to 5 thousand more.
.
Regards
Astha

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Astha

In my opinion, you should continue with old policy. It is perfectly okay to declare that you are a smoker now for new policy. It will not impact your old policy as you declared correct fact at that time in 2012 that you are a non-smoker.

As an individual i may start smoking in future and any declaration is as on date. As a policy holder you never guaranteed that you will remain non-smoker for life. Also as you rightly mentioned, you should declare old policy details in proposal form of new policy.

ankit
ankit
7 years ago

HI Nitin Sir,
i am 28 Year Old , having 50 L Term Plan from Aviva from 4 years . i want to increase my risk Cover ..so how much do i take , 1 crore or 75 L more ..
also i am confused from Kotak and Max life whicb one is best . can you please suggest

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  ankit

The coverage amount is normally 10 times annual income. Therefore, you can decide accordingly. I will prefer Max Life.

ankit
ankit
7 years ago
Reply to  Nitin Bhatia

Thanks for the reply sir , but as HDFC and MAX Merger is going on . so it would be fine to go ahead with this ?

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  ankit

You need not worry on merger part.

ankit
ankit
7 years ago
Reply to  Nitin Bhatia

ok sir thnks

Santosh Patnaik
Santosh Patnaik
7 years ago

Hi Nithin,

I have a query on term Insurance, my CTC is 7.0 Lacs and as per the below discussion i am eligible for only 10 times of my CTC, that means 70Lacs sum assured only, but i am interested to go with 1 Crore of sum assured, can i go with higher value?

Nitin Bhatia
Nitin Bhatia
7 years ago

There is NO rule that coverage can be only 10 times annual income. This no is only suggestive in nature. You may apply for 1 Cr term insurance policy but approval will depend on various factors like age, health condition, medical history etc. You may discuss with insurance provider before applying to avoid rejection.

Himanshu
Himanshu
7 years ago

Hi Nitin,

Really insightful article. I am planning to buy term insurance around 1 Cr for 30 years…and shortlisted 2-3 companies…ICICI iProtect, HDFC Click2Protech and Max Life Online….

Out of 3, Max Life has least premium and good CSR…so inclined towards Max Life….
Please note that Max Life has 93% of CSR (%of Benefit) where as HDFC has only 65%…..

I have couple of questions if you can please reply:

1. There is a merger plan between Max Life and HDFC. Can we expect same CSR (% of Benefit) of Max Life after merger or it could be decreased significantly….Also, There is around 3 to 4 thousand of difference between premium of both. Is it good opportunity to buy Max Life and later (after merger) enjoy brand name – HDFC?

2. We are considering CSR as of now…but what is guarantee that same CSR will be there after 5 years….

3. Should we give importance to CSR (% of Benefit) ?

4. I dont see any difference in buying policy from Insurance company’s online portal and Policybazaar/myinsuranceclub etc….any idea why?

PS: Thanks for repeatedly mentioning about Sec 45 of the act…I personally checked at IRDA site and its 100% true….

Regards,
Himanshu

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Himanshu

1. It is not clear whether Max Life will operate as a separate entity or there will be single offering from HDFC Life. The insurance is highly regulated sector so you need not worry about merger. The terms and conditions of your policy will be honored. Therefore, you can take advantage of lower premium.

2. The claim settlement ratio is now relevant only for first 3 years. After three years all the claims will be settled. Therefore, technically the claim settlement ratio of more than 3 years old policies will be near 100%.

3. Still it is important

4. I will prefer to buy directly from the online portal of the insurance provider.

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