Life is full of ifs and buts. None of us knows what might happen even the next minute. If your child, life partner or your parent(s) depend on your income then you need to have Life #Insurance plan.In this post, let us shortlist and understand some of the best #Online Term Insurance Plans in India. These best Term Life Insurance plans can be purchased through online.
What is “Term Life Insurance Plan?”
Term insurance is the simplest and most fundamental insurance product. Term insurance plans are designed to ensure that in the event of the policyholder’s death, the family gets the sum assured (the cover amount). Term plan provides risk coverage for a certain period of time (#policy term/duration). 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 form of Life insurance in terms of premium.
- Cheaper than conventional plan like money back life insurance or endowment plan (or) offline term plan. Online #term insurance plan are roughly 30-40% cheaper than the offline plan.
- 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.
Best online Term Insurance Plans in India for 2015
I have selected and shortlisted the below best plan based on;
- Claim Settlement Record of the Life Insurance Companies as per #IRDA’s (Insurance Regulatory Development Authority of India)
- Affordability (Premium amount).
- Brand name.
- Quality of service provided to its customers during the online buying process and after issuing the policy (policy life).
- Ease of buying the Term Life Insurance plan online.
- Feedback received from my friends/clients who bought online Term Life Insurance plan directly.
Below is the comparison of best online Term Life insurance Plan.
All the above premium amounts are for 30 year old male, non-smoker, for Rs 1 Crore Sum Assured. Optional Riders like Accident Death Benefit/Critical Illness are not considered. Premium Amount is for yearly mode.
ICICI Prudential iProtect Online Term Insurance Plan
ICICI Prudential is the second best (after LIC) as per the latest Claim Settlement data, with 94.10% of the claims received were paid/settled. ICICI Prudential’s online term plan is known as ‘iProtect.’ The premium amounts of this term insurance plan are very reasonable and are competitively priced. This term insurance plan also provides the optional Accidental Death Benefit (ADB) rider. The maximum Sum Assured that is offered under ADB Rs 50 Lakh.
HDFC Life’s Click 2 Protect Online Term Insurance Plan
The premiums of HDFC’s Click2protect plan are lower than ICICI Prudential’s iProtect plan. The claim settlement ratio of HDFC Life is 94%. The maximum Sum Assured that one can buy is Rs 10 crore under this plan. HDFC Life offers advanced version of this basic online term plan, which is known as HDFC Click2protect plus.
LIC’s e-Term Plan Online Term Insurance Plan
LIC of India had launched its online Term insurance plan on 17th May, 2014. LIC was a late entrant with respect to the launch of online term plans. But, one good point about e-term plan is that it is about 35% cheaper than Anmol Jeevan/Amulya Jeevan (LIC’s offline term plans). However, when you compare the premiums of LIC’s e-term plan with private insurance players’ online products, you may find it very costly. But, LIC has the highest claim settlement ratio (98.14%) among the life insurers. You can surely consider buying LIC e-Term plan. The minimum Sum Assured offered under LIC e-Term online insurance plan is Rs 50 Lakh.
Max Life Insurance’s Online Term Plan
Max life insurance company has a decent claim settlement record (which is 93.86%). The premiums are also comparatively very less. Max’s online term plan provides optional Accident Death Benefit rider. Besides basic cover the Max’s online term plan offers two options;
- Basic Life Cover plus Monthly Income
- Basic Life Cover Plus Increasing Monthly income
The premium rates are slightly higher if you opt for any these features. (As mentioned in the table, the premium for the basic cover is Rs 8,314, for Monthly income option it is Rs 10,100 and for Increasing monthly income option the premium is Rs 11,100).
Kotak Life Insurance’s Preferred e-Term plan
Kotak’s Preferred e-Term online insurance plan is one of the cheapest online term insurance plans. The company has decent claim settlement ratio (90.69%). Like Max’s plan, Kotak’s plan also has the option called ‘Recurring payout’ wherein part of the claim is paid on policy holder’s death and a fixed monthly/yearly amount is paid for next 15 years to the nominee.
SBI Life Insurance eShield online Term Plan
SBI’s e-shield premiums are a bit higher than that of Kotak’s, Max’s, ICICI’s and HDFC’s online term plans. SBI Life’s e-shield plan can be an alternate to LIC’s e-term plan. The premium of e-shield plan is very low when compared to LIC’s e-term plan.
SBI Life’s e-Shield plan offers four options;
- Level Cover (basic plan)
- Level Cover with Accidental Death Benefit
- Increasing cover (Basic sum assured is increased at the rate of 10% simple interest after every 5th policy year without increasing the premium)
- Increasing Cover with Accidental Death Benefit
Bajaj Allianz Life Insurance iSecure online Term insurance Plan
This plan has a special feature wherein you can opt for individual or joint life insurance coverage (for your spouse and yourself).
Aegon Religare iTerm Plan
Though the claim settlement record of Aegon’s is low (at 81%), we need to talk about their online term insurance plan. They are the pioneers in online term insurance pla. They have changed the rules of the game by offering the cheapest online term insurance plans. Aegon’s iTerm plan offers optional riders like Critical Illness and ADB. On diagnosis of any critical illnesses (as mentioned in the policy document) the future premiums are waived off.
FAQs (Frequently Asked Questions) while choosing best Online Term Insurance Plan:
FAQ 1 – Do I need to check the claim Settlement record of Life Insurance companies before opting for the best online term insurance plan?
Every year IRDA publishes the claim settlement (death claims) details of all the Life Insurance companies. Unfortunately this data is not segregated based on type of insurance plan (like term insurance, money-back or endowment). If you analyze the latest data, the average claim amount settled by LIC is very small, which is around Rs 1.14 Lakh per policy. (LIC settled death claims to the tune of Rs 8,475 crore and the total no of policies received for claim settlement are around 7.5 Lakh).
Claim settlement data is important but it should not be the sole criteria for choosing the best online term insurance plan. In future, if IRDA provides claim settlement details separately for Term insurance plan then this can be used as the main yardstick while opting best online term insurance plan.
FAQ 2 -How much insurance coverage (sum assured) should I purchase?
The quantum of insurance coverage can be based on your future income potential (income replacement method) or need based method (your financial obligations + liabilities – existing insurance plan/assets etc). You may use the below comprehensive calculator to know how much insurance coverage is required. (It is based on Need based method)
FAQ 3 – Till what age should I take the term plan cover?
The ideal answer is, up to your retirement age.
If you are confident that you may not have any financial obligations, loans and dependents (who are financially dependent on you) when you attain say 50 years, you can consider term plan duration accordingly.
FAQ 4 – Should I purchase two Term plan from two different Life Insurance Companies?
I believe, diversification across different companies may not be required. As long as you are honest and provide complete/accurate details (in proposal form) while purchasing the insurance plan, your life insurance company has to settle the claim (if any). In any unfortunate event, your nominee has to submit multiple death claims which may be a challenging task.
But, you may consider splitting the life insurance amount into two policies. For example – If you decide to buy Rs 1 crore worth insurance coverage, you may consider taking two Rs 50 Lakh worth term insurance plan (preferably from same life insurance company). The main advantage of splitting is, you can stop paying the premiums on one policy, in-case if you think that you do not require so much insurance coverage.
FAQ 5 – Can NRI buy online term insurance?
Non Resident Indians can buy online term insurance plan. The NRI can purchase the policy from overseas through written communication with the insurance company in India. There may be certain additional costs in such case. For instance, if you purchase the policy from abroad, you would have to do the medical examination and send the report to the insurance company in India. You would have to bear the costs of this medical examination yourself. However if you purchase the policy in India, you would not have to bear this cost as it would be inbuilt in the cost of your policy. The insurance policy purchased in India will cover death that occurs anywhere in the world.
FAQ 6 – Is it better to take riders separately or can I take along with the Term insurance?
As mentioned in the above list of best online term insurance plan, some life insurance companies provide optional riders (like Accident death benefit & Critical Illness) and optional features (like waiver of premium or monthly income options etc.,)
Do not complicate the things. Buy a simple term insurance plan with sufficient basic cover. I believe most of these online term plan do not provide “Total Permanent Disability rider” which I think is a very essential one. (TPD cover entitles you to receive a lump sum insurance benefit if you become Totally and Permanently Disable). You can consider taking stand alone Personal Accident plan. Also, you can ignore plan with ‘return of premium’ option.
FAQ 7 – Can I take single policy which offers joint life cover (for my wife and myself jointly)?
It is advisable to take separate or independent term insurance plan.
FAQ 8 – What are the required documents to purchase an online term insurance plan?
Generally you will be asked to submit; Identity proof, Address proof, Age proof and Income proof (Income Tax returns of 3 years / Form16s / Profit & Loss statements). You have to undergo medical tests too.
FAQ 9 – Should I buy online term insurance plan through Aggregators?
Aggregators are companies like policybazaar.com (Accurex marketing & consulting), policymatra.com and quickbima. I suggest you to use these websites to just compare and calculate premiums of various term plan.
You can then buy the selected best term plan directly by visiting that Life insurance Company’s website itself. Why do you want to add one more layer between you and the insurance company? Keep it simple. Buy direct.
FAQ 10 – Online Vs offline Term insurance plan? Why are online term plan so cheap?
Online policies are cheaper than offline term plan, because there is no agent’s fee involved and other administrative costs of the insurance company are also lower.
Most companies cite incomplete documentation or concealment of facts as the primary reason for rejecting death claims. Hence, while buying a life insurance it is of utmost importance that you furnish accurate information. You may just pick any one of the above best online term insurance plan as per your requirements and comfort level.
Let me know your views on best online Term insurance plan. Do you have a Term plan? Which one did you purchase? Did you buy it online? Share your comments.