Term insurance is one of the best financial instrument you can have in your portfolio. This is not a investment but a product to safeguard all your assets & investments.
In this insurance the premium is very less as compared to endowment policy, money back plans or even ULIPS. The policyholder does not get any maturity benefit amount but if he/she dies in between the policy term, the nominee gets the S.A., which may be sufficient for survival family members.
Generally, if you ask any person about insurance, most of them carry some LIC policy and/or some ULIP. The combined benefit in case of death is not sufficient that survival spouse can think of life ahead as free from financial problems.
Just imagine, if you die today, is your insurance amount sufficient for your children's education, marriage and meeting day-to-day expenses of your spouse throughout the life. Also, consider medical expenses, loans or other unseen and unexpected expenses.
If your answer is no, it's time to consider term insurance for you. The premium is not more than your alcohol or cigarette expense per day. You don't have to shed lacs of premium to get insurance of 1 crore.
Let's compare the features & premium of some of the insurance companies. We'll take term insurance plans from
- LIC of India
- ICICI Prudential Life Insurance
- Aegon Religare Life Insurance
- SBI Life Insurance
- Bharti-AXA Life Insurance
- Birla Sunlife Life Insurance
- MetLife Insurance
1. LIC of India
LIC provides 2 term insurance policies. If S.A. is between Rs.5 lacs – less than Rs. 25 lacs, the plan is Anmol Jeevan – 1. If S.A. is Rs.25 lacs or more, plan is Amulya Jeevan – 1
The premium can be paid half-yearly or yearly.
It's a simple plan – on death of the policy holder, the nominee gets the S.A. The plan can be taken through any LIC agent.
2. ICICI Prudential Life Insurance
The company has recently launched a new term insurance plan – iProtect, which can be purchased ONLY online. This product is not available any agent. You need to submit online application & pay the premium through NetBanking. After few days, someone from company will come to collect the required documents & will take your signature on your filled application form. There will be medical tests at the cost of the company, if required. After few days, you'll get your policy bond.
Since the company has removed all the intermediaries, they have come with one of the cheapest premium in term insurance category. See premium table below.
They offer 2 riders also in this policy.
Accident Death Benefit (ADB) rider.
In case of death, the company pays double the S.A., subject to a max. of Rs.50lacs, in addition to basic S.A. Ofcourse, you've to pay little more premium to get this benefit.
Critical Illness Rider.
If during the tenure, the policyholder suffers from any critical disease (as mentioned in the list) like Cancer, heart attack etc., the company pays the entire S.A. to the policyholder. But read carefully the terms & conditions of this rider. I suggest you to go for a separate health insurance policy (mediclaim), instead of this rider.
3. Aegon Religare Life Insurance
They also offer term insurance at very low premium – iTerm, which can be purchased ONLY online. The premium is very competitive as compared to ICICI Prudential iProtect plan since they have also abolished all intermediaries in between for this policy. So, you can not purchase this policy from any of the company's agent.
Just few days back, they've mentioned on CNBC TV, that the company is planning to decrease their premium further & will introduce riders also. Watch them carefully.
4. SBI Life Insurance
This name is also one of the trusted name in insurance sector. Smart Shield is the plan name from SBI life insurance. They offer attractive large sum assured rebates. You can also customize your coverage by choosing from a wide range of additional benefits such as – Accidental Death Benefit Rider, Accidental Total and Permanent Disability Rider and Accelerated Critical Illness cover option.
5. Bharti-AXA Life Insurance
They can give term insurance till 75 years of your age via their plan Elite Secure. But remember, you might have to pay higher premium to cover yourself during old age.
6. Birla Sunlife Life Insurance
Plan Name: BSLI High Net worth Term Plan. Rewards you for your healthy lifestyle and good habits: Leading a healthy lifestyle has its own benefits in helping you leading a more productive life. Keeping this in mind, the BSLI High Networth Term Plan rewards you with reduced premiums if you lead a healthy lifestyle with extra benefits if you have a family history of good health. In case you are a woman taking this cover then the plan further enhances the benefits in terms of reduced premiums. If you choose a cover of more than Rs. 1 Crore the plan offers additional benefits on the premiums.
Policy Term is 10, 15, 20, 25 or 30 years subject to 75 years at maturity
7. MetLife Insurance
They have also come up with online term insurance plan. Maximum Policy Expiry Age is 70 years. Get rewarded with lower premiums for being a Non-Smoker. People who have not smoked or consumed tobacco or nicotine products in any form in the last 5 years (Tobacco product includes but not limited to Cigarettes, Bidis, Cigars, Chewable Tobacco like Ghutka, flavoured Pan Masala etc.) and who have tested negative for the Cotinine Test. The special premium rates will be offered subject to satisfactory results of "Cotinine Test" besides other underwriting requirements as may be required by the company from time to time.
Comparison of premium of term insurance
|For Age 35, S.A. 50 Lacs, Tenure 25 years|
|S.A.||50 Lacs||1 Crore|
|LIC of Inida||19850||39700|
|ICICI Prudential Life Insurance||8273||14670|
|Aegon Religare Life Insurance||8273||15994|
|SBI Life Insurance||12675||22591|
|Bharti-AXA Life Insurance||14504||27465|
|Birla SunLife Life Insurance||12574||21839|
The above premium has been calculated for a healthy & non-smoker male of age 35 years, and a policy tenure of 25 years. Although, due care has been taken while checking the premium from respective websites of life insurance companies via their online premium calculator or official brochure, we do not guarantee the accuracy of premium figures. Please take the help of customer support department of life insurance company to assist you with accurate premium amount as per your requirements.
Some important points to know
- Some plans mentioned above have a limitation of S.A. upto 25 lacs, while some starts from 25 lacs. You need to check from their customer care department as per your age and S.A.
- Every company has the right to go for your medical tests depending upon your age, S.A., your health conditions, your parents health conditions before age 65 etc.
- They also have the right to increase your premium, after consider your medical reports. If you're not comfortable with increased premium, you can ask for the full refund of your premium.
- After getting your policy bond, you've 15 days free-look period, in which you can cancel your policy, if you do not agree with policy bond terms & conditions. You will get your full premium back. Some companies deduct medical tests costs and/or stamp duty paid.
- Some companies charge higher premium for premium 45-50 lacs and less premium for 50 lacs S.A. You need to check that also.
- One important point, you should know, that IRDA is regulating all the insurance companies of India and all companies, including private players, are safe to consider any insurance product.
- Remember, what you're getting in this policy – only the peace of mind. So, choose the company where you get peace of mind.
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October 20, 2010