online term plan

Term insurance plans are the best way to provide financial security for loved ones of the insured in case any unfortunate incident. Compared to traditional plans, online term plan is available at a lower premium, which makes it easier for a larger number of people to procure insurance.

Term plans do not provide survival or maturity benefits, which is why people try to opt for the cheapest policy. Although saving money on the insurance premium is beneficial, it must not be the only deciding factor. Cheap is not always the best and considering some of the below-mentioned factors while making the decision is very important.

Higher Policy Tenure

Several insurance companies now offer term plans with longer tenure, which ranges between 35 and 50 years. With improved medical facilities and technical development in the healthcare sector, life expectancy has significantly increased. Checking the tenure being offered by the insurance provider before availing the policy is advisable. The best life insurance plans offer longer tenure, eliminates the need to purchase another policy in case the first one expires.

Maturity Age

The majority of the term insurance plans have a maturity age between 65 and 80 years. As a person grows older, the possibility of suffering from various sicknesses and critical illnesses also increases. Individuals are advised to choose a plan with a higher maturity age to ensure coverage is available at an older age when the possibility of ailments is higher. The best term plan will be one that has a maturity age of over 75 years for the policy holder to enjoy coverage during the senior years.

Claim Rejection

The claim rejection ratio is one of the most important factors that must be considered while choosing term insurance plans. Claim rejection ratio is the number of claims that are not paid as a percentage of total claims made during a year. Benefits of these life policies are given to the beneficiaries only on the death of the insured. Opting for an insurance provider that has lower claim rejection ratios will be advantageous to the family members. The procedure and time taken for claims to be cleared must also be considered to ensure the beneficiaries do not undergo too much stress while already dealing with the sorrow of losing their loved one. Selecting a reputed and reliable insurer is an important factor that must be considered while availing term plans.

Low Claim Pending Ratio

While ensuring the claim rejection ratio is lower, the claim pending ratio must also be considered. If an insurance company has a high pending ratio it may be reflective of inefficiencies of the service provider while settling the claims. According to the regulatory guidelines, claim settlements must be completed within six months and if an insurance company has a higher pending ratio, it is recommended to choose another service provider to buy the best term insurance.

Actual Premium

An increasing number of users are going for online insurance. This is because they are able to acquire higher coverage at lower costs. Insurance companies are willing to offer the cost savings by eliminating the intermediaries through the online channel, which reduces the premium on term plans. However, potential buyers need to understand that the online quotes are indicative and the actual premium amount may differ. Certain factors, such as medical history, current health conditions, and lifestyle play an important role in determining the actual premium and checking the exact amount before making the decision is very important.

Complexity

Individuals must ensure the procedure to acquire the insurance coverage is not complex. Moreover, the claim filing process should also be easy and quick to prevent the beneficiaries from having to run from one department to another to receive the policy benefits. Investors are advised to check the past history and track records of the various insurance providers before making their final decision.

While availing term insurance provides peace of mind to the investors, doing some research before opting for one is crucial. It is very important to provide accurate and truthful information to avoid rejection. Considering the above-mentioned factors before buying term plans will go a long way in ensuring financial security to your loved ones.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.

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Technology has developed and the Internet is used by millions of people for various reasons. This has even affected the insurance industry and a greater number of individuals are now opting to purchase insurance using this advanced technology.

When investors opt for purchasing life insurance policies, investment plans or retirement plans online, they eliminate the agents and brokers. This makes the entire procedure faster and less cumbersome. Moreover, most insurance providers offer excellent in-house support to assist clients in case of any difficulties.

Here are seven reasons to buy insurance online

1. Cost

The cost of availing insurance online is at least 50% to 70% cheaper than the expense of acquiring coverage using the traditional method. This is because intermediaries are eliminated and clients directly deal with the insurance companies, thereby reducing the expenses. In addition, insurers consider people opting to buy insurance online as having less mortality risk, which means the premiums for such buyers is lower.

2. Sum assured

Investors tend to choose higher coverage sum assured because online term insurance plans are cheaper. A reason for availing higher coverage through online is the marketing strategies adopted by the insurance companies providing low per day costs for these policies. Moreover, most online insurance policies do not have mandatory medical tests, which make it more convenient for people to avail higher coverage.

3. Premiums

Compared to insurance coverage acquired offline, the premium on online plans is significantly lower. This lower premium is available only for investors who choose to acquire the insurance coverage online. Insurance companies are willing to pass on the benefits of reducing their overheads and intermediaries’ expenses to online policy buyers.

4. Comparisons

Several websites are available, which make it easier for potential buyers to make intelligent comparisons. Using a single resource, individuals are able to compare the terms and conditions, coverage, premiums, and other factors of policies offered by different insurance companies. Such comparison makes it easier for users to make the right choice as per their personal requirements ensuring maximum benefits.

5. Transparency

Availing insurance includes several factors and each policy comes with a long list of terms and conditions. Understanding these before signing the dotted line is crucial to avoid any problems in the future. The online term plan is completely transparent and provides all details related to riders, features, and tenure. Riders are additional covers that may be chosen by paying extra premium. Moreover, potential buyers have access to customer testimonials and comments, which makes it simpler to understand the overall experience while dealing with a particular insurance company. Another transparency feature is that every policy buyer receives text and e-mail confirmations on their transactions that allow them to track their application status and rectify any errors that may have occurred at the time of submission.

6. Easy access

If the policy has been purchased in the traditional manner, the possibility of being able to access related information at all times is often difficult. This difficulty is easily overcome when individuals choose to buy term insurance online. Investors can log in to the insurance company portal from any place at their convenient time to access the required information.

7. Flexibility

Online policy purchase allows users to make modifications as and when required before submitting the form. Therefore, if the buyers make any mistake in entering the information, they can edit or delete it before making their application. This prevents the insurance company from rejecting their applications because of providing inaccurate information ensuring insurance coverage is easily available to the investors.

It is easily seen that buying insurance online has several benefits. However, individuals must research about the different options because they do not have the option to rely on an insurance agent or broker. Investors must know the coverage, terms and conditions, and all the inclusions and exclusions before buying the policy to prevent any nasty surprises in the future. Several online resources are available, which provide beneficial information and taking guidance from these will ensure investors are able to acquire the right policy that maximizes their benefits at the lowest possible costs.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.

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How to lower term insurance premium rates?

by Vinaya HS on June 11, 2016

in Finance

The following post is a sponsored post.

An increasing number of people are choosing term plans because of their affordability and higher coverage. Insurance companies consider several factors when determining the premium payable on such plans.

A few factors, such as gender and age cannot be controlled by the insured. However, there are certain factors that can be modified to lower the premium on term insurance plans.

  • Excessive smoking or drinking – Both of these habits have negative health effects, which is why habitual drinkers or smokers need to pay higher premiums on online term plans. Every insurer requires the details of such habits before selling the plan because these factors affect the premium payable on the insurance plan.
  • Hobbies – Certain hobbies like scuba diving, skydiving, boxing, and so on, increase the risk associated with loss of life and disability due to injury and accidents. This makes it riskier for the insurance companies to insure your life. You should not be surprised if you are asked to pay a higher premium or are even refused an insurance policy, if your hobby is perceived as excessively dangerous.
  • Present health conditions – Your health is an important determinant of your mortality risk, which directly affects the insurance premium. An individual suffering from pre-existing conditions likes heart trouble or diabetes is at higher risk as compared to a healthy person and must pay more as premium. Insurance companies require details about your present health conditions before issuing the policy. Individuals who are over 45 years of age may require undergoing medical tests prior to availing the online term insurance plan.
  • Longer duration or higher sum assured – Policyholders who want to avail term insurance for a longer duration or higher sum assured need to pay bigger premiums. Longer term or higher sum assured increases the exposure and risk assumed by the insurer in case of your demise during the policy period. You may consider reducing the duration or the sums assured, or find another insurance company, if you think the premium is very high.
  • Obesity – Being obese increases the risk of other health conditions like diabetes or heart trouble. This increases the risk of the insurance company, which results in obese individuals needing to pay higher premiums.
  • Riders – Riders like critical illness covers or premium waiver have an associated cost, which increases the overall cost of availing the term plan. Before you decide to include riders within the policy, it is advisable to take a step back and assess your needs.
  • Making online purchase – Commonly, online term policy premiums are lower when compared to offline policies. Insurance companies pass on the reduced administrative and distribution cost reductions enjoyed through online sales to the buyers in the form of lower insurance premium.

Term plans have several benefits and are an excellent and affordable way to avail higher insurance coverage. You can further reduce the costs by considering the factors mentioned above.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.

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Importance of Medical Test in Term Insurance

by Vinaya HS on January 25, 2016

in Finance

The following post is a sponsored post.

Insurers put out advertisements that say “no medical tests needed” to entice prospective buyers. However, before you get taken in by these advertisements, just ask yourself if buying insurance without medical tests is really plausible and worth the risk?

The primary reason for undergoing medical tests is to check the health condition of the applicants. Depending on the results, insurers provide customized plans to buyers. If you avail term coverage without medical tests, there are many risks with negative repercussions in the future.

  • Higher Probability of Rejection: Just because you do not have to take medical tests when buying the policy, does not mean that existing conditions have been successfully hidden. You will need to declare your current health condition while filling the application form. Even if you are able to hide existing conditions, there may be consequences when making claims. Approximately between 2% and 3% of claims each year are rejected for this reason.

  • Higher Premium: Insurers base the premium on the perceived risks and undergoing a medical examination before availing online term insurance can help reduce the premium. If two applicants apply for the plan without a medical examination, the premium is the same. However, if with medical tests the result is favorable for one while unfavorable for the other, the healthy person is rewarded for good health with a lower amount. With medical fitness certificates, applicants can reduce the cost of availing term plans.

  • Lower Risk Coverage: Quite often, term insurance policies that require no medical tests are of a lower value. Even for applicants who are healthy and young, insurers will not provide insurance cover exceeding INR 5 lakhs. Therefore, if you want to procure higher insurance coverage, you will have to undergo the medical examination.

A full medical report includes blood pressure tests, echocardiogram, blood count, and fasting blood sugar. Some insurers may also require liver and kidney tests. These tests are aimed at determining current health status and presence of any conditions in the applicants. When the test reports are normal, insurers are able to lower the premium rates because the perceived risks are lower.

Moreover, if there are any existing conditions, these are known to the insurance company and accounted for with a higher premium charge. If the conditions are not known while availing the policy and the insured was to pass away due to the disease, there is a high possibility of the death benefits not being paid to the beneficiary. Therefore, individuals are strongly advised to not avoid or ignore medical tests before they avail term life insurance plans.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.

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5 Myths Surrounding Term Insurance

by Vinaya HS on January 25, 2016

in Finance

The following post is a sponsored post.

Financial concepts pertaining investments can be quite confusing to the lay person, and as is the case with any complicated subject, a lot of misinformation and myths begin to take shape. This is true for term plans, as well, and it can be problematic, as many people simply avoid buying these types of policies.

The difference between what term plans are perceived to be and what they actually are is huge. Even though such policies are the purest kind of insurance, term plans are not popular due to a lack of understanding among potential buyers.

Here are 5 common myths about term life insurance plans. Hopefully, access to such information will help dispel any rumors and myths, allowing you to make better-informed decisions about your investments.

1. Single individuals do not need term plans

This is completely inaccurate and single individuals are also advised to avail term plans. These kinds of insurance policies offer protection against debt obligations like home, personal, or auto loans. You would not want your family members to be burdened by such outstanding debts in case of your sudden demise. Moreover, in single-income homes (with dependent parents); you must ensure financial security, in case of your death.

2. Coverage only for current income

In reality, you must acquire coverage for future income too, because coverage for present income will be inadequate to provide financial security to your family in the long term. The amount of coverage depends on your income and liabilities. Term insurance plans in India are based on human life value (HLV), which tries to financially estimate the value of your life. You must acquire coverage equivalent to your present income (inflation-adjusted) to ensure continued lifestyle for your survivors after meeting outstanding debt obligations.

3. Not available beyond age 50

One of the most common term insurance myths is that these policies cannot be purchased if you are over 50 years of age. In reality, these policies are available up to 65 years and some insurers offer term plans providing coverage until the age of 85 years. However, availing these insurance plans for more than 50 years is not recommended, as the premiums are steep.

4. Expensive insurance plans

Contrary to belief, term insurance is the most affordable way to acquire life cover. Term policies are pooled risks where the premiums are paid by pooling the perceived risks for several buyers of the insurance company.

5. Limited to death benefits

This will actually depend on the insurance plan and the add-on features you include within the plan. Certain riders can be included with the term plan for more benefits. Some of the possible riders could include accident cover for permanent or temporary disability, critical illness cover, and others.

When considering term plans, you need to remember that these are meant to provide financial security to your loved ones in case of your untimely demise. With an accurate investment objective, you will be able to make the right choice of availing a term policy that suits your needs.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.

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You might be faced with a plethora of questions when choosing a term insurance plan, right from the type of insurance to the doubts regarding the returns. So, here’s a list of 10 questions you should ask before buying term life insurance to end up choosing the best term insurance policy in India.

1. Does the premium amount change over time?

No, unless specified in any of the clauses. Also, if the insurer develops any disability or habit that is life threatening, the company may decide to change the premium amount.

2. Are there any changes to the insurance plan if the policy holder gets into the habit of smoking/drinking after buying it?

Since the habit of smoking and drinking decrease the rate of life expectancy, it is important that you reveal any such habits to the policy company even if you started smoking or drinking after buying it. The company may or may not increase your premium amount on declaring. Not revealing can cause breach of the agreement and might result in the policy getting cancelled.

3. Is the policy priced more for prospective clients who smoke?

The cost and the conditions vary from policy to policy. Some companies will want to know your smoking and drinking habits even if it was in the past whereas some companies consider you a non-smoker if you haven’t smoked in the past 3 years.

4. Can one claim term life insurance in case of accidental death?

Yes, it can be claimed if the insured dies in an accident. Some companies also offer extra benefits such as accidental death benefits, critical disability rider etc.

5. Can one claim the term life insurance cover if the death occurred outside India?

Yes, you can claim the cover or assured amount irrespective of the location of the death. However, the policy holder must inform the insurer if he/she is moving to India. The company might defer the benefits if the person decides to move to countries deemed not safe by the company.

6. What if the policy holder does not die?

Since most policies do not offer any maturity benefit, many might feel discouraged to buy one. However, many insurance companies offer you different options at the end of your term, you can upgrade your policy to a permanent one, renew it with a slightly higher premium etc.

7. How does the claim settlement work if an individual has over two policies?

In the event of death of a policy holder who has more than two policies, the claimant should mention the same while filling the form to claim the cover. In most cases, the death certificate to claim the cover should be submitted to the company whose policy was bought first and acknowledgement of the same should be sent to the other insurance companies.

8. How seriously do insurance companies investigate deaths of the insured?

It depends on whether it is an early claim or a normal claim. All policy companies have an initial period that varies from company to company that characterizes the early claim. If the claim is made in that period and the company has too much to lose, then it double checks everything before the claim is settled which other is easy in the case of normal claim.

9. What kind of deaths is not covered in term insurance?

Certain kind of deaths like deaths due to terrorist attacks or deaths due to natural disasters is not covered in term insurance. So read all the clauses carefully before buying the policy.

10. Can NRIs buy term insurance policies in India?

Yes, as long as you are a resident of India as the company might require age or address proof to see where you belong in India. And you need not visit India to do so as one can find and buy the best online term plan and submit the necessary documents on the next visit to India.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.

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Types of Term Plans and Right Time to Buy Them

by Vinaya HS on August 13, 2015

in Finance

The following post is a sponsored post.

There are mainly two types of term insurance plans – annual renewable term and level premium term. Annual renewable term life insurance offers an all year round coverage and has to be renewed annually whereas a level premium term insurance plan offers cover for a longer period of time of 5 to 20 years and is valid for this multi-year period.

One of the main advantages of annual renewable term life insurance is that it has low premium amounts as compared to level premium term insurance policies. However, the premium amount rises as your age increases and so, it is a suitable option for those who are sure that their income is going to rise considerably in the coming years.

With level premium term insurance, you have a fixed amount of premium amount right from the first year of the multi-year period you opt for to the very last. Hence, you do not have to worry even in worst case scenarios where your income may remain more or less the same over a year.

When it comes to returns, a term life insurance policy is again divided into two categories –

  1. Policies with return of premiums
  2. Policies without return of premiums

Policies without return of premiums have lower premium amounts compared to the policies with return of premiums. Investing in a policy with return of premiums is the best term insurance plan for many as they get the premium amount they paid for by the end of their term (only if the policy was not claimed earlier).

Right to Time to Buy a Policy

The ideal time to buy an insurance policy irrespective of the type is in one’s prime. The reason being that the term life insurance will cost you half of what it will be if bought, say, after ten years. You can secure yours and your family’s future and be at peace as you grow older.

However, this does not necessarily mean that term life insurance is only for those belonging to the younger age category. It is never too late to insure yourself with the best term plan in India for you and your family. But it is always best to buy it while you can as with time the premium amount also increases and so do your other financial responsibilities.

A term life insurance policy is a great option if you choose the right plan after careful consideration. Keep in mind your current financial position and goals before signing any deal as the benefits may vary from person to person.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.

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Buying insurance is often perceived as time-consuming and difficult. Although most of us agree with the importance of having a life insurance, the formalities can be a big turn-off. Such a cumbersome task can sometimes cause policy buyers to postpone their decision.

Let us be appreciative that we are in an age where almost no task is time-consuming or cumbersome. All thanks to the Internet. You can now look for insurance companies on the internet and buy online term insurance plans. Buying life insurance online is growing popular with every passing day where people now prefer this medium for buying and selling term insurance products.

Why buy Term Insurance?

Who needs a Term Insurance? Well, almost everyone who is earning and has dependent(s) needs a term plan. Term insurance is the most basic kind of life insurance. Here, in case the policyholder faces demise during the policy period then the family members get the sum assured as death benefit. However, if the policy holder luckily doesn’t come across such unfortunate events, and is still alive, then the insurance company wouldn’t remit any money back. Which effectively means that the nominees would earn no benefit on maturity of the policy. However, the most exciting feature of opting for a term insurance plan is it guarantees a very high sum assured for a really low premium.

Online Term Plan

For a customer who is comfortable using the internet and has some experience of having made online purchases, buying life insurance online is definitely the most convenient and most logical option. It’s fast, easy and secure – just fill in the details and make the payment through Internet Banking. Apart from the convenience, online policy is comparatively cheaper compared to the offline version and offers a very high sum assured compared to the premiums.

Every month around lakhs of people in India search for online term plans. The market of online term insurance has witnessed a constant rise since 2010. Approximately 25,000 policies are sold online every month in India. One such popular online term plan is the HDFC Life Click 2 Protect Plus offered by HDFC Life. According to a report by Boston Consulting Group and Google India, it is projected that, by 2020, three out of four insurance policies sold would be via digital channels. Sensing a growing demand for online term policies, almost all private life insurance companies have started focusing on this segment.

Benefits of Opting for Online Term Plans

Some of the advantages of buying term plans online using the website of insurance companies are:

  1. Lower premium rates
  2. Faster policy issuance process
  3. Less paperwork
  4. Crystal clear process
  5. No health / medical checkup for certain age groups

Due to high awareness levels amongst the youth, the outcome is better. In case of offline plans, there is always a possibility that the policy buyer has just signed the form, while the agent enters all the data. Online term insurance ensure that the insured himself fills in all the details accurately leaving no scope for the information could be sketchy or mistaken resulting in better quality of information.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.

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A Reference AEGON Religare iTerm Plan Quote

by Vinaya HS on December 31, 2012

in Finance

A reader of this blog shared an actual quotation that they received for the AEGON Religare iTerm Planhere’s my review of this online term life insurance plan. The reader also gave me permission to publish this here so that it’d help serve as a reference for other readers.

Image of AEGON Religare iTerm Quote Breakup

Rs 13,600 per annum for a cover of Rs 15,000,000 (1.5 crore) is pretty grab-worthy in my opinion.

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This post was updated on December 25, 2012

By chance, I happened to read in a financial newspaper that the Bharti AXA Life eProtect Online Term Plan had some updated terms and conditions. Previously, I’d said that I like the simple and no-frills approach of this plan. I take that statement back now because in an attempt to extend the maximum age at maturity parameter, Bharti AXA has managed to kind of mess-up the plan and has made at more confusing. Take a look at the new terms –

Image of Bharti AXA Life eProtect Illustration Updated

I tried to interpret the meaning of the term “To Age XY” but couldn’t. What’s the difference between “Entry Age 50 + Policy Term 10-Years” vs. “Entry Age 50 + Policy Term ‘To Age 60′”? I tried to download the product brochure but the file seems to be corrupted. Not a good experience at all and does nothing to get to the top spot.

The original post below was published on July 18, 2012.

So finally, I am coming around to reviewing online term life insurance plans. I’ve lost track of how many requests I have received through Capital Advisor over the past few months asking for my thoughts and perspectives on purchasing term life insurance plans online. I’ve also been meaning to buy one for myself from quite some time now, but you know the whole ere-thing has me totally consumed reading up on strategies and ways and means.

I thought I’d keep my reviews a bit different by simply jotting down quick notes on whatever plans I happen to review. Each quick note will compare an online term plan against the one from the previous quick note and then pick my choice from the two. That way I hope to emerge with the one online term plan that looks like the best bet.

I’d be delighted if you could participate in this process by offering your own thoughts, perspectives, and experiences as well as suggesting other online term plans that you’d like reviewed in subsequent quick notes.

So here’s the first one inspired by an email ad that I received for the Bharti AXA Life eProtect online term plan.

Quick Notes on Bharti AXA Life eProtect

  • Maximum age at maturity is 60. But the maximum policy term is only 30 years. So, if you’re some bits below 30, you will be left uncovered (!) for a few years before you retire (taking the traditional retirement approach and when you’d typically not need life insurance anymore due to your retirement corpus kicking in).

  • I like the Family Care Benefit clause that promises an initial payout of Rs 1 lac within 2-business days of claim submission. Immediate cash is always useful in such situations.

  • I also like the simple and no-frills approach of this plan. For a 30-30-1 plan (30-year old buying a 30-year plan for Rs 1 crore cover), the indicated premium is Rs 7,300 excluding service tax.

  • I’m also comfortable with the Bharti AXA brand but this is extremely subjective and also subject to bias. You might have experienced otherwise. But when in doubt, simply go by your gut feel and you will do fine. I’ll also stick my limb out and say that all those arguments about claim ratios and payouts shouldn’t bother you if you’re honest when filling up the forms. Plus with IRDA cleaning-up it’s own act and that of the industry, things would only get better.

That takes us off to a good start.

Again,

I’d be delighted if you could participate in this process by offering your own thoughts, perspectives, and experiences as well as suggesting other online term plans that you’d like reviewed in subsequent quick notes.

I’ll pick the next one based on your comments.

Note: To help you to keep up with new term plan reviews, to go back and refer to past reviews, and to share all of this content with your friends, I’ve created the following easy to remember link — http://bit.ly/termplans. So, go ahead, bookmark and share.

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Quick Notes: ICICI Pru iCare Online Term Plan

by Vinaya HS on August 29, 2012

in Finance

A quick word of thanks to everyone who wrote in asking for ICICI Prudential’s iCare Online Term Plan to be reviewed next. This post’s for you.

Upon first glance, iCare looks to be a clean and simple policy — until you see a whole bunch of fine print conveniently tucked away in almost invisible text.

You’d need a magnifying glass out here –

Image of iCare fine print

  • The maximum age at maturity is 75-years. Great, but then the policy term is discontinuous and you can only select from 5/10/15/20/25/30-years. Hence, for example, if you’re 46-years old, you can only choose a maximum policy term of 25-years because otherwise you’d cross the maximum maturity age of 75-years if the policy term was 30-years. But with a continuous option, you’d have been able to choose a maximum policy term of 29-years. I like term plans that offer a policy term in increments of a year.

  • The maximum sum assured is age bound. It’s 1.5 crore for the 18 — 50 age bracket and 70 lacs for the 51 — 65 age bracket. I think this is a sensible underwriting rule that correctly and completely goes against the “expert advise” of you needing several crores of rupees worth of insurance cover.

  • There’s an Accident Death Benefit (ADB) rider optionally available. But the definition of an Accidental Death (as found in the above fine print) is quite enlightening –

Accidental Death Benefit:

For the purpose of Accidental Death Benefit payable on accident the following conditions shall apply:

a. Death due to accident should not be caused by the following:

i. Attempted suicide or self inflicted injuries while sane or insane, or whilst the Life Assured is under the influence of any narcotic substance or drug or intoxicating liquor; or

ii. Engaging in aerial flights (including parachuting and skydiving) other than as a fare paying passenger on a licensed passenger-carrying commercial aircraft (being a multi-engined aircraft) operating on a regular scheduled route; or

iii. The Life Assured committing any breach of law; or

iv. Due to war, whether declared or not or civil commotion; or

v. Engaging in hazardous sports or pastimes, e.g. taking part in (or practicing for) boxing, caving, climbing, horse racing, jet skiing, martial arts, mountaineering, off piste skiing, pot holing, power boat racing, underwater diving, yacht racing or any race, trial or timed motor sport.

b. Death due to accident must be caused by violent, external and visible means.

c. The accident shall result in bodily injury or injuries to the Life Assured independently of any other means. Such injury or injuries shall, within 180 days of the occurrence of the accident, directly and independently of any other means cause the death of the Life Assured. In the event of the death of the Life Assured after 180 days of the occurrence of the accident, the Company shall not be liable to pay this benefit.

d. The policy must be in-force as at the time of accident.

e. The Company shall not be liable to pay this benefit in case the death of the Life Assured occurs after the date of termination of the policy.

Seriously, with these many terms and conditions you would really need to plan out your accidental death in fine detail.

  • Then comes the shocker! For our usual 30-30-1 benchmark plan (30-year old buying a 30-year plan for Rs 1 crore cover), the indicated premium is Rs 13,800 excluding service tax and cess (and Rs 15,506 including service tax and cess). A whopping 89% higher when compared with the current leader — AEGON Religare iTerm Plan — in this series.

  • And here’s the most funny thing — the portal offers two options, “1 crore” and “1 crores”, and then seems to think that “1 crore” and “1 crores” are different numerical values. Hilarious! But then again, I wonder how many people have shelled out that extra Rs 77 (15,583 for “1 crores” minus 15,506 for “1 crore”) as premium and would continue to do so for the next 30-years. Even the premium for the ADB rider changes by Rs 4. Small amounts, but then I’m pretty sure you have worked pretty hard for every rupee that you earn.

Premium calculation for a cover of 1 crore –

Image of premium calculation for iCare for a premium of 1 crore


Premium calculation for a cover of 1 crores – (Rs 77 extra!)

Image of premium calculation for iCare for a premium of 1 crores

So, you can almost guess my verdict by now.

An exorbitant premium with nothing drastically different to offer means that the ICICI Pru iCare Online Term Plan is relegated to the forget-me category. Which means, our top ranker — AEGON Religare iTerm Online Term Plan — continues to be the top ranker.

What do you think?

A quick reminder: To help you to keep up with new term plan reviews, to go back and refer to past reviews, and to share all of this content with your friends, I’ve created the following easy to remember link — http://bit.ly/termplans. So, please go ahead, bookmark and share — I see that many of you already are. Thanks!

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My first impression of the HDFC Life Click 2 Protect (the fifth review in this series) online term plan was to “Click 2 Close.” Seriously, the portal is that unimpressive in its design. Don’t even ask about the premium calculation page — the clunky user interface is a nightmare. The company should look definitely around once to see what its competitors do on their portals.

Image of HDFC Life Click 2 Protect premium calculation page

Yep! That’s Dr. Capital Advisor seeking a life insurance quote.

I already don’t have any hope. But let’s see.

  • For our usual 30-30-1 benchmark plan (30-year old buying a 30-year plan for Rs 1 crore cover), the indicated premium is Rs 10,600 (!) excluding service tax. Come on, what kind of premium is that (about 45% more than its competitors and as we’ll see below for nothing exemplary in features)? Further, annual premium payment is the only option (?) on offer.

HDFC_Life_2

  • The policy term is discontinuous and you can only select from 10/15/20/25/30-years. Hence, for example, if you’re 36-years old, you can only choose a maximum policy term of 25-years because otherwise you’d cross the maximum maturity age of 65-years if the policy term was 30-years. But with a continuous option, you’d have been able to choose a maximum policy term of 29-years.

  • Apart from that there’s nothing much to write about this plan. I didn’t get a good impression at the start and that didn’t change at the end. Brand-wise though, I’m comfortable with the HDFC name.

I’m sure you’d have guessed the verdict by now.

A poorly designed portal, a ho-hum product offering, and an exorbitant premium all combine for a thumbs-down to the HDFC Life Click 2 Protect online term plan. That means, our top ranker — AEGON Religare iTerm online term plan — continues to be the top ranker.

What do you think?

A quick reminder: To help you to keep up with new term plan reviews, to go back and refer to past reviews, and to share all of this content with your friends, I’ve created the following easy to remember link — http://bit.ly/termplans. So, please go ahead, bookmark and share — I see that many of you already are. Thanks!

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At this point in our online term plan reviews, we have the AEGON Religare iTerm plan in top position.

Interestingly, about 5-days after my review was published here, I received this email from their marketing team –

We take this opportunity to thank you for reviewing our product on your blog. It would be great if we can publish the same article on our social media platforms hence would like know if we can go ahead with the same.

Awaiting your reply.

Warm Regards,

Team Aegon

I replied saying that they could go ahead and about a week later the article was linked to on their Facebook and Twitter pages. It was good to see some “Likes” out there.

Coming up in a few hours’ time from now is my review of HDFC’s Click2Protect online term plan. Will we have a new winner? Stay tuned.

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Quick Notes: Aviva i-Life Online Term Plan

by Vinaya HS on August 2, 2012

in Finance

As I’d promised in one the comments on a previous post in this series, I’m picking up the Aviva i-Life online term plan for review. In the most recent review, I was super impressed with the flexibility offered by the AEGON Religare iTerm plan. So let’s see if the Aviva i-Life plan has got what it takes to get to pole position. (One of my regular readers of this blog has purchased this plan and he was impressed by the responsiveness of the company as well as the smooth buying process.)

So here’s what I read of this online term plan –

  • The direct information on the website for the product and the downloadable product brochure available on the same website seem to differ in illustrating the specifications for the product. The brochure talks about an optional Accidental Death Benefit rider being available but the website seems to have no mention anywhere about this option. So which one’s correct? My guess would be to trust the website and that’s what I will base this review upon. But surely not a good omen to begin this review with! In a highly competitive market, an insurer cannot afford even the slightest slip-up. Compare this what I said about the AEGON Religare iTerm Plan –

That’s what I am generally liking about AEGON Religare — the portal is very well designed and everything seems to be stated up-front and in a very visible way.

Aviva i-Life product specifications as seen directly on the website (note the absence of any rider options) –

Image of Aviva i-Life Product specifications as seen directly on the website

Aviva i-Life product specifications per the downloadable brochure (note the rider options) –

Image of Aviva i-Life product specifications per the downloadable brochure

  • The maximum maturity age is 70-years which is a good thing since it extends well into traditional retirement but because the maximum policy term is 35-years you might end up without cover for a few years before traditional retirement were you to buy this policy in your very early twenties. But does anyone even buy life insurance policies at that early age? I don’t count this as a significant limitation. But again, the AEGON Religare iTerm plan is one-up because it offers a maximum policy term of 40-years.

  • Otherwise this plan is pretty simple and straightforward.

  • For our usual 30-30-1 benchmark plan (30-year old buying a 30-year plan for Rs 1 crore cover), the indicated premium is Rs 8,279 but this includes service tax. Excluding service tax, the premium works out to around Rs 7,300, the same as our incumbent.

Premium calculations for our 30-30-1 benchmark –

Image of Aviva i-Life premium calculations for our 30-30-1 benchmark

  • I think I also like this approach of telling you upfront the overall cost of buying insurance — other plans that I’ve reviewed so far give an impression of lower cost with the service tax clause put underneath usually in fine print. There’s also an additional rebate for female lives of 5% on the tabular premium rates for male lives.

So, for this particular plan, if we consider a female life, premium calculations for our 30-30-1 benchmark would be –

Image of Aviva i-Life premium calculations for our 30-30-1 female-life benchmark

Given all this, does the Aviva i-Life plan have what it takes to beat the incumbent AEGON Religare iTerm plan?

Nope. I continue to keep the AEGON Religare iTerm plan in top position, because I believe with its flexibility it’d address the term insurance needs of a much wider audience.

But, what do you think?

A quick reminder: To help you to keep up with new term plan reviews, to go back and refer to past reviews, and to share all of this content with your friends, I’ve created the following easy to remember link — http://bit.ly/termplans. So, please go ahead, bookmark and share — I see that many of you already are. Thanks!

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Quick Notes: AEGON Religare iTerm Plan (Online)

by Vinaya HS on July 25, 2012

in Finance

For the third review in this series, I decided to pick-up the AEGON Religare iTerm Plan (Online) — perhaps the most popular online term insurance plan out there. What stood out and immediately cried for attention on the portal was that the claims statistics are openly published for everyone to see. Impressive. The company also provides an explanation behind the one rejected claim. Supports my hypothesis that if you’re brutally honest when filling up the policy form, you really would have nothing to worry about.

Image of statistics for Aegon Religare iTerm Plan

A quick reminder: To help you to keep up with new term plan reviews, to go back and refer to past reviews, and to share all of this content with your friends, I’ve created the following easy to remember link — http://bit.ly/termplans. So, please go ahead, bookmark and share — I see that many of you already are. Thanks!

  • The plan offers some optional riders — Accidental Death Benefit, Waiver of Premium on Critical Illness, and Women Critical Illness. I’m not too impressed by the features offered by the latter two, so the only useful rider seems to be the Accidental Death Benefit. But I couldn’t find a way to customize the coverage offered under this rider — the premium calculator seems to automatically pick a coverage based on the other factors such as policy term, your age, etc. and in some combinations the rider option seems to disappear.

  • I also like the built-in Terminal Illness clause, which, on diagnosis of any Terminal Illness, 25% of the base sum assured will be paid (maximum of Rs 100 lacs) & the base sum assured will be reduced by an amount equal to the benefit paid under this clause. In my opinion, large cash infusions into your savings account in such situations would directly benefit you.

  • Maximum maturity age is 75. So, unlike the current incumbent Bharti AXA Life eProtect plan, you’ll be very well covered even into traditional retirement. The policy term is continuous rather than being restricted to blocks of years (5-years, 10-years, 15-years, and so on).

  • Medicals are not required up to a coverage of 25 lacs, seem to be optional up to a coverage of 50 lacs and are compulsory beyond that. The great thing is that all of these are stated upfront. That’s what I am generally liking about AEGON Religare — the portal is very well designed and everything seems to be stated up-front and in a very visible way.

  • For our usual 30-30-1 benchmark plan (30-year old buying a 30-year plan for Rs 1 crore cover), the indicated premium is Rs 7,300 excluding service tax which happens to be exactly the same as that for the Bharti AXA Life eProtect plan.

  • I’m also comfortable with the AEGON Religare brand.

So, do we have a new winner?

I believe we do. In my opinion, the AEGON Religare iTerm Plan offers you a lot more flexibility than the Bharti AXA Life eProtect Plan (the current title holder) at the same benchmark premium. That now puts the AEGON Religare iTerm Plan in pole position.

What do you think?

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Quick Notes: Kotak e-Preferred Online Term Plan

by Vinaya HS on July 23, 2012

in Finance

I simply love my readers. I was a bit apprehensive about how my “quick notes” reviewing online term life insurance plans would be received, but seeing your responses to the first one has me motivated. Now, for the second review in this series, I’ve picked up an online term plan from Kotak Life Insurance called Kotak e-Preferred Term.

Note: To help you to keep up with new term plan reviews, to go back and refer to past reviews, and to share all of this content with your friends, I’ve created the following easy to remember link — http://bit.ly/termplans. So, go ahead, bookmark and share.

Here’s what I think of this plan –

  • I really like the Step-Up option that lets you increase your coverage at key stages in your life (marriage, purchase of a house, and birth or legal adoption of a child being the key ones) without undergoing new medical tests. These typically are the situations when you’d need to review and increase your life insurance needs. And normally these changes in your life do occur before you turn 45 which is when this plan would no longer give you the step-up option. So, I’m OK with that clause.

  • What’s more, there’s even a Step-Down option if you need to lower your insurance needs!

  • Maximum maturity age is 70. So, unlike the Bharti AXA Life eProtect plan, you’ll be pretty well covered even into traditional retirement. The policy term is continuous (anything from 5-years to 30-years) rather than being restricted to blocks of years (5-years, 10-years, 15-years, and so on up to 30-years).

  • For our 30-30-1 benchmark plan (30-year old buying a 30-year plan for Rs 1 crore cover), the indicated premium is Rs 11,500 excluding service tax which is 1.57 times the Bharti AXA Life eProtect plan. That’s quite expensive!

  • I’m also comfortable with the Kotak brand and if you’re keen on knowing the claims settlement ratio it’s about 89.30% for the time period 2010 — 2011.

  • But what concerns me the most is the high premium (and the premium would only increase further with the step-up options and with service tax) for nothing spectacularly different. And remember, you’d be paying these high premiums for the next 20- to 3o-years.

So, for now, I still keep the Bharti AXA Life eProtect plan in pole position.

But what do you think? Do you agree with my reasoning?

Again, to help you to keep up with new term plan reviews, to go back and refer to past reviews, and to share all of this content with your friends, I’ve created the following easy to remember link — http://bit.ly/termplans. So, go ahead, bookmark and share.

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So finally, I am coming around to reviewing online term life insurance plans. I’ve lost track of how many requests I have received through Capital Advisor over the past few months asking for my thoughts and perspectives on purchasing term life insurance plans online. I’ve also been meaning to buy one for myself from quite some time now, but you know the whole ere-thing has me totally consumed reading up on strategies and ways and means.

I thought I’d keep my reviews a bit different by simply jotting down quick notes on whatever plans I happen to review. Each quick note will compare an online term plan against the one from the previous quick note and then pick my choice from the two. That way I hope to emerge with the one online term plan that looks like the best bet.

I’d be delighted if you could participate in this process by offering your own thoughts, perspectives, and experiences as well as suggesting other online term plans that you’d like reviewed in subsequent quick notes.

So here’s the first one inspired by an email ad that I received for the Bharti AXA Life eProtect online term plan.

Quick Notes on Bharti AXA Life eProtect

  • Maximum age at maturity is 60. But the maximum policy term is only 30 years. So, if you’re some bits below 30, you will be left uncovered (!) for a few years before you retire (taking the traditional retirement approach and when you’d typically not need life insurance anymore due to your retirement corpus kicking in).

  • I like the Family Care Benefit clause that promises an initial payout of Rs 1 lac within 2-business days of claim submission. Immediate cash is always useful in such situations.

  • I also like the simple and no-frills approach of this plan. For a 30-30-1 plan (30-year old buying a 30-year plan for Rs 1 crore cover), the indicated premium is Rs 7,300 excluding service tax.

  • I’m also comfortable with the Bharti AXA brand but this is extremely subjective and also subject to bias. You might have experienced otherwise. But when in doubt, simply go by your gut feel and you will do fine. I’ll also stick my limb out and say that all those arguments about claim ratios and payouts shouldn’t bother you if you’re honest when filling up the forms. Plus with IRDA cleaning-up it’s own act and that of the industry, things would only get better.

That takes us off to a good start.

Again,

I’d be delighted if you could participate in this process by offering your own thoughts, perspectives, and experiences as well as suggesting other online term plans that you’d like reviewed in subsequent quick notes.

I’ll pick the next one based on your comments.

Note: To help you to keep up with new term plan reviews, to go back and refer to past reviews, and to share all of this content with your friends, I’ve created the following easy to remember link — http://bit.ly/termplans. So, go ahead, bookmark and share.

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