I discussed earlier in “5 Term Insurance benefits” that insurance agents hardly suggest the term plans. Yet Term Plans are absolutely must in any investment portfolio. They give you maximum value for your money. The online Term Plans offers you a way to bypass the agents and purchase them directly from the insurance company itself, thereby reducing the premiums further.
In this article I’ve checked the online Term Insurance policies with three parameters or qualities in mind. They are:
- Claim Settlement Ratio: This is a parameter that tells us how good a company is in settling the claims. The IRDA website publishes the data regularly and it gives an idea as to whether our nominee(s) have a chance to get the Sum Assured with minimum hurdles or not. LIC has the highest Claim Settlement Ratio of 97% for the year 2009-2010, while Canara HSBC scores only 39%.
- Company Background: A well funded and managed company is always a better choice than a relatively new player in the field. A company with years of experience is likely to treat its customers better giving you a good chance to recover your dues and get a good customer service.
- Premium: Generally people tend to choose a policy with the cheapest premium only. However that would mean compromising with the other two parameters above. Yes, cheapest premium is good for you, but it should be weighed with the motive behind buying a policy in the first place. You are buying a policy not just for the sake of buying one, but to protect your loved ones from facing any financial hurdles in your absence.
Now let’s take a look at different online Term Insurance plans on the above parameters:
|ONLINE TERM INSURANCE PLAN||COMPANY||PREMIUM (Rs.)||CLAIM SETTLEMENT RATIO|
|iProtect||ICICI Prudential Life||5515||90.17%|
|Smart Life||Future Generali||8934||38.85%|
N.B. Premium calculated for a 27-year old male, non-smoker living in Mumbai for a Policy Term of 25 years and Rs. 50,00,000/- Sum Assured.
Now, to select the 3 best online term plans among the limited 7 offered at present is a little difficult. However, with the above 3 parameters in mind, I’ve shortlisted Aviva’s i-Life, e-preferred from Kotak and ICICI Pru Life’s iProtect as my preferred choice. But please remember that your own experience with these companies also come into play when making a selection.
It is rumored that Life Insurance Corporation of India (LIC) is also coming out with its own offering shortly. LIC being the oldest player in the industry and the highest Claim Settlement Ratio among them all is a company worth waiting for.
I hope that this article will help you to ease the confusion a bit when choosing an online Term Insurance plan. Please post your comments and let me know your views.