Taking pure term insurance from an organization other than LIC?



I am looking for a term insurance cover. I have been doing some preliminary research and what I observed is that LIC of India’s premium is higher by at least 25% as against its competition. I was quoted Rs. 33,850 for their “Amulya Jeevan” policy with a cover of Rs. 50 lakhs whereas ICICI Prudential has quoted only Rs. 25,144 that includes a few riders (no riders whatsoever with LIC). My questions are:
1. Why is there so much of price difference between the products. Should LIC not be cheaper owing to their operating style and size?;
2. Can I go ahead and take the cover from any company that offers lowest rates without fearing any issues related to claim settlement? Agents from both sides (LIC and others) have shown the tendency to disparage the others products/image and I am not able to make up my mind based on their advise.

Taking pure term insurance from an organization other than LIC?
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7 Replies to “Taking pure term insurance from an organization other than LIC?”


  1. 1. Yes may be correct. Because of its conservative policies and more provisions for unforeseen events, the premium may be high. But for private players, chance/risk taking ability is more and also due to competition and offering of term policy is subject to pass in many medical examinations.
    2. For taking such term policies, one should see whether the company walks up to the contract term along with the insured person. See the case of AMP Sanmar. Here consideration is not the criteria because after ones death, the moneys are to be claimed by the nominee and by then, the INSURER should not trouble the nominee while settling the claim. Hence in my opinion, claim settlement is the prime concern and not the consideration amount.


  2. Hi, i am a certified financial advisor of LIC and ICICI Prudential. i will suggest you take ICICI PRUDENTIAL Term plan. See the difference is not only premium, here ICICI Prudential also provide you couple of Riders just on a Nominal Rate. Which LIC not provided. LIC has launched his plan long days back. But now in market ICICI Pru has recently launched Term Plan “Pure Protect”. Which have lowest Premium in indian insurance insdusty for Term Plan.

    If you still need more Clarification. Please don’t Hesitate to call me.

    Himanshu – 09818475666 (Delhi)




  3. LIC has a wide customer base of 20 crores and its continuous mortality investigation process is “uncomparable”. The price quoted is the right one to meet the contigencies. Customers experience hardship with the private insurers as the rate of repudiation is high, not only that any change in Foreign Investment Policy may affect the existence of private insurers and the claim settlement. Hence you do not see the price but ensure your requirement is rightly met.


  4. It’s good that you are considering buying term plan. In theory, you should always buy the cheapest term plan. But the cheapest plan may not be the best one. As for why should you select LIC, well it is just for your personal comfort. Lot of us prefer paying a bit extra for peace of mind. Another advantage for LIC is the high claim ratio. To know more on how to choose term plan, you can click on the link below.

    http://khotapaisa.wordpress.com/2009/07/09/which-term-insurance-plan-to-buy/





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