Online Term Insurance Plans : – Life is full of if’s and but’s. None of us understand what might happen even the next minute. If your kid, life partner or your parent(s) depend on your income then you wish to have life insurance plan.
In this post, allow us to shortlist and understand some of the best online term insurance Plans in India. These best Term life insurance plans may be purchased through online.
What is “Term insurance Plan?”
Term insurance is that 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 your 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’s the cheapest kind 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’s hassle free.
- You may not be influenced by an agent/advisor during the buying process.
Best Online Term Insurance Plans in India
I have selected and shortlisted the below best plans based on;
- Claim Settlement Record of the life insurance firms as per IRDA’s (Insurance regulatory Development Authority of India) latest Claim/Death Settlement Ratios (2014-2015)
- 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 set up online.
- Feedback received from my friends/clients who bought online Term life insurance plans directly.
Below is the comparison of best online Term Life insurance Plans. (Click on the image to enlarge and open it in a new window)
All the above premium amounts are for thirty year old male, non-smoker, for Rs 1 crore sum Assured. optional Riders like Accident Death Benefit/Critical illness aren’t considered. Premium amount is for yearly mode.
ICICI Prudential iProtect Online Term Insurance Plan
ICICI prudential is that the second best (after LIC) as per the newest Claim Settlement data, with 94.10% of the claims received were paid/settled. ICICI Prudential’s online term plan is thought 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’s offered under ADB Rs 50 lakh. you’ll like reading my review on ICICI Prudential’s latest online term insurance plan – iProtect smart term insurance plan.
(Click here to understand more about or purchase ICICI’s iProtect plan)
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 purchase is Rs 10 crore under this plan. HDFC Life offers advanced version of this basic online term plan, that 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 regarding e-term plan is that it’s regarding 35th cheaper than Anmol Jeevan/Amulya Jeevan (LIC’s offline term plans).
However, after you compare the premiums of LIC’s e-term plan with private insurance players’ online products, you’ll find it very costly. But, LIC has the highest claim settlement ratio (98.14%) among the life insurers. you’ll surely consider buying LIC e-Term plan. The minimum sum Assured offered under LIC e-Term online insurance plan is Rs 50 lakh.
(Click here to know more about or purchase LIC e-Term Plan)
Max Life Insurance’s online Term plan
Max life insurance company has a decent claim settlement record (which is 93.86%). The premiums also are comparatively very less. Max’s online term plan provides optional Accident death benefit rider. Besides basic cover the Max’s online term plan offers 2 options;
- Basic Life Cover plus Monthly Income.
- Basic Life Cover Plus Increasing Monthly income.
The premium rates are slightly higher if you choose for any these features. (As mentioned within the table, the premium for the basic cover is Rs 8,314, for Monthly income option it’s Rs 10,100 and for Increasing monthly income option the premium is Rs 11,100).
(Click here to know more about or purchase Max’s online term plan)
SBI life insurance eShield online Term plan
SBI’s e-shield premiums are a little higher than that of Kotak’s, Max’s, ICICI’s and HDFC’s online term plans. SBI Life’s e-shield plan is an alternate to LIC’s e-term plan. The premium of e-shield plan is extremely 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 100% simple interest once each 5th policy year while not increasing the premium).
- Increasing cover with Accidental death benefit.
(Click here to know more about or purchase SBI Life’s e-Shield plan)
Bajaj Allianz life insurance iSecure online term insurance plan
This plan includes a special feature wherein you’ll 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 want to talk about their online term insurance plan. they’re the pioneers in online term insurance plans. they need 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 While choosing best Online Term Insurance Plans:
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 firms. unfortunately this information isn’t segregated based on type of insurance plans (like term insurance, money-back or endowment). If you analyze the latest information, 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 information is important however it mustn’t be the sole criteria for choosing the best online term insurance plan. In future, if IRDA provides claim settlement details separately for term insurance plans then this may be used because 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 may be based on your future income potential (income replacement method) or need based method (your financial obligations + liabilities – existing insurance plans/assets etc). you’ll use the below comprehensive calculator to know how much insurance coverage is needed.
FAQ 3 – Until what age should I take the term plan cover?
The ideal answer is, up to your retirement age.
If you’re confident that you just may not have any financial obligations, loans and dependents (who are financially dependent on you) after you attain say 50 years, you’ll consider term plan duration accordingly.
FAQ 4 – Should i get 2 Term plans from 2 different life insurance Companies?
I believe, diversification across different firms may not be required. As long as you’re honest and provide complete/accurate details (in proposal form) while buying the insurance plan, your 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’ll consider splitting the life insurance amount into 2 policies. as an example – If you opt to buy Rs 1 crore worth insurance coverage, you’ll consider taking 2 Rs 50 lakh worth term insurance plans (preferably from same life insurance company). the main advantage of splitting is, you’ll stop paying the premiums on one policy, in-case if you’re thinking that that you don’t require so much insurance coverage.
FAQ 5 – Will NRI purchase online term insurance?
Non Resident Indians should buy online term insurance plans. The NRI can buy the policy from overseas through written communication with the insurance firm in India. There may be certain additional costs in such case. for instance, if you buy the policy from abroad, you’d have to do the medical examination and send the report to the insurance firm in India.
You’d have to bear the costs of this medical examination yourself. but if you buy the policy in India, you’d not have to bear this cost because it would be inbuilt in the cost of your policy. The insurance policy purchased in India can 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 plans, some life insurance firms 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. purchase a simple term insurance plan with sufficient basic cover. i believe most of these online term plans don’t provide “Total Permanent disability rider” that i think may be a very essential one. (TPD cover entitles you to receive a lump sum insurance benefit if you become totally and permanently Disable). you’ll consider taking stand alone Personal Accident plan. Also, you’ll ignore plans with ‘return of premium’ option.
FAQ 7 – Can i take single policy that offers joint life cover (for my wife and myself jointly)?
It is advisable to take separate or independent term insurance plans.
FAQ 8 – What are the desired documents to purchase an online term insurance plan?
Generally you’ll be asked to submit; Identity proof, Address proof, Age proof and income proof (Income Tax returns of 3 years / Form16s / Profit & Loss statements). you’ve got 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 plans.
You can then purchase 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 plans? Why are online term plans so cheap?
Online policies are cheaper than offline term plans, as a result of there’s no agent’s fee involved and alternative administrative costs of the insurance company also are lower.
Most companies cite incomplete documentation or concealment of facts because the primary reason for rejecting death claims. Hence, while buying a life insurance it’s of utmost importance that you furnish accurate information. you’ll just pick any one of the above best online term insurance plans as per your requirements and comfort level.
Let me know your views on best online term insurance plans. does one have a Term plan? that one did you purchase? Did you purchase it online? Share your comments.
Note update : As per the recent amendment to Section 45 of the Insurance Act, If your policy is three years old, no matter what happens, the life insurance company won’t be able to deny the claims. So, your life insurance company has only 3 years in hand to reject the policy based on any mis-representation or mis-statement. Once three policy years are completed then the life insurance company has to settle the claims and can not reject them.