Is the cheapest term insurance the best?

Many life insurance companies have hopped onto the online term insurance bandwagon. Since this is the simplest form of insurance on offer and a direct comparison of premium is possible. Couple of insurers have even entered a slugfest on who offers the best term insurance plan. 
These insurance covers that offer a pre-set death benefit are cheaper than the regular term insurance plans purchased through insurance agents and brokers. The benefit of online term plans is that one does away with the insurance middlemen and thus saves up on the commission paid to the agent out of your premium paid. Online term plans help you save 1/3 to ½ the premium paid for offline plans. 

But then is premium the only consideration to opt for a term insurance plan, where the heir of the insured would get the sum assured upon the death of the policyholder. It has been observed that the chances of claims being rejected are higher when the cost of life insurance isn't commensurate with the actual risk involved. Policyholder declaration of health and existing conditions too are responsible for claim rejection.

Few other essential factors need to be considered. Here are five parameters that you should assess apart from premium to zero down on an online term insurance plan.

Maturity age offered: Insurance companies offer a maximum maturity age between 65-80 years of age. Higher the maturity age the better for you as higher the age more the chances of death and better the utilization of a term plan.

Higher policy term: Term insurance policy term used to be 25 years earlier. The scene is now changing. Insurers offer a term of 35-52 years as well. The higher the term, the better for you as you need not purchase a second term cover at higher age if you exhaust the term of the first one purchased early in life.

Actual premium: The premium quoted online or through charts is just an indicative premium and your actual cost may escalate once your medical tests reveal your health condition. A smoker would have to cough up 25-30% more. So, find your actual premium before selecting options.

Claims rejection ratio: This is an important factor to be examined before taking the online term plan. An insurer may be offering the cheapest term plan, but if it rejects 40% claims settlement by paying 94.01% of the claims received. 

Companies with strong financial background and reliable in terms of claim settlement should be looked at. As per IRDA, public sector life insurer has a claims ratio of 98.14%.
Keep an eye on the claims rejection ratio too which is indicative of the number of claims that have been declined by an insurer. 

Ease of claim handling: Your heir should not be left running from pillar to post to make the insurance claim. Also, several insurers have a long list of pending claims. So, study the past record of the insurer before taking up the term plan.

Caution: 

To avoid claim rejection later follow these ground rules:

1) Provide correct details in the health declaration as hiding past history of diseases and essential health related information could lead to claim rejection.

2) Stop agent from filling wrong details or better still fill the form yourself.

3) Don't opt for the single premium plan even though a discount is offered as thanks to the uncertainties of life you may or may not need to the premium for the whole term. The premium doesn't increase each year.

4) Inform the nominee you have appointed about the term policy you have purchased.

5) Don't fall for misselling offers of insurance agents that you will get back the entire amount you have invested, so the cost is zero. The money will be back upon death and the inflation cost as well as opportunity cost of money should be looked at from 15-20 years perspective. 

(Source: http://economictimes.indiatimes.com/is-the-cheapest-term-insurance-the-best/articleshow/47232489.cms)

Term Insurance Policies And Their Differing Rates

Did you know that term insurance rates differ by more than 40% across several companies in India? This brings to a simple conclusion that getting term insurance at the lowest possible premium and maximum coverage is important. However, deciding from a cohort of diverse rates where each company claims of best of the offerings, it may become little difficult.

The purpose of this article is to make the reader informed about getting the right approach of research to be able to buy the best and the safest term insurance plan in India.

Further you can browse through relevant points which will help you in selecting the best and the safest term insurance policy in India.

It all starts with a careful selection-

It is a famous saying, “If you want it to be a good journey, the start should be great.” The same applies to when selecting your term insurance provider. You should get term insurance only from an insurance company which is valid as per the IRDA-Insurance Regulatory and Development Authority.

An insurance agent may not always be the best option for the following reasons-

·         The plan recommended can be way expensive

·         He’s more likely to recommend you something where he can get a higher commission.

Term plans provide low commissions to agents. Since, last few years, term insurance rates witnessed significant cut by 40-50% thanks to increased competition & lower mortality rates.

Getting term insurance online is easier as it gets for several reasons-

·         One can easily compare features and prices of several term insurance plans

·         The process is simple & fast

·         Most companies enable all documentation & medical test reports to be delivered to the insured’s home

·         Most insurance companies favour lower commissions for online sales. Hence, you can get term insurance plans at lowest rates which can save you 30% money than the offline way!

·         One can easily pay his premium via credit card or net banking

What if the policy holder survives throughout the policy duration?

Consider that the policyholder survives throughout the policy duration. In this case, the risk cover will be terminated. Therefore, there won’t be any amount paid to the policyholder nor his dependents.

However, if the policyholder dies during the policy period then a sum assured amount will be paid to the policyholder’s dependents. The insurer will pay the sum insured amount to policyholder's dependants or the one who is listed as the nominee in the policy.

Inference-

Term insurance plan can be looked upon as savings plan or as a protection cover.

It’s a good investment option for retirement benefits.

One surprising fact is that products like ULIPs and insurance are looked upon as long term investment options. However, their very basic function which is to provide insurance or protection is ignored to large extent.

Note- The distributors tend to sell policies unfairly. They sell policies just to obtain higher commissions by charging higher annual premiums to the buyers. Hence, it is important to take the help of professional to avoid such problems.

Term Insurance-Facilitator Of Complete Protection

You must have heard about several term insurance policies in India. However, there still exists a fair amount of negligence in terms of its prominence.The rationale of this article is to make our readers aware about a term insurance policy’s importance. After you read this article, you will understand that why you should get term insurance. Also you’ll be able to get an appropriate plan suiting your requirements.

  Before buying a term insurance cover, determine the coverage you will need

This is a necessary aspect as it is the sum assured amount which will determine the usefulness of your insurance when needed. Hence it should be decided rationally considering all the possible aspects. Below is a simple thumb rule to follow-

·        An individual below 45 years of age must select an insurance guaranteeing 10 times the value of the individual’s annual income.
·        The person above the age of 45 must opt for an insurance which gives 5 times the value of his annual income.

 Basic details of term insurance

·        Term insurance being pure insurance plan, there’s no surrender value or paid up value. Also one can’t apply for a loan in parallel to term insurance plans.
·        Insurer decides the premium based on one’s gender and age followed by his health and lifestyle habits. Older person will have to pay higher premium than younger counterparts.
·        Women usually have to pay lesser premium than men of the same age due to female life expectancy levels being usually higher than male life expectancy levels.
·        The premium rises with rising policy duration as, the person’s possibility of facing higher risk increases with his age.
·        People who smoke are charged with higher premiums than those who don’t smoke.
·        People who have obesity problems or other ailments require require paying greater or higher premiums.
·        Certain companies may not demand medical checks. However, certain insurance companies before providing term plans, require the buyers above 35 years to undergo medical tests.

 Aim for the maximum coverage value-
The latest IRDA rules grant support for higher protection component prevailing amongst term insurance plans in India. It’s seen a minimum of 7-10 times increase in the provided sum insured value. However, it also depends on the insured’s age.Many consider it as a welcome move for the fact that it emphasizes on the protection aspect of the policy and not an option for pure savings or investment per se.There’s another variation of this which is known as Term plan with Premium Back. The idea is that if the policyholder survives throughout the policy term, he/she should at least get his total premium amount. Therefore, they are preferred by most in India.

 Term insurance also gives posthumous benefits
One can get term plan for his credit protection. For instance, consider a person dies before paying off his home loan; however he had a term insurance. This term insurance will take care of the mortgage loans thus preventing the family from facing the burden.Hence, now you know the factors which need due attention while deciding on a term plan. Choose wisely and take help of professional when needed. 

Get Term Insurance Online

Term insurance plan is ideal if one wants to save money. It is idea for those who want to get embraced in a secure life coverage saving the dependents during the worst times.

Let’s know about the various beneficial aspects of this very useful policy in this article.

Getting term insurance online helps you get a reliable policy easily and quickly-

Term insurance policies offer full insurance coverage for essential requirements like child’s marriage and education fees.

They have a fixed tenure. The insured needs to pay fixed rate of premiums.

Reach your goal faster by getting term insurance online-

The prime goal of a term indemnity policy is to grant life coverage. It aims to reduce greatly the major financial responsibilities of the policyholder.

Prime features-

·         Term indemnity plan is easily affordable.

·         The process to buy one is hassle-free especially when buying it online.

·         It gives instant protection. Most insures offer flexible payment options.

·         It demands a lowest premium rate which is the primary reason for its popularity.

·         You can easily buy suitable term indemnity policy online. In this way you’re freed from the troubles seen in its offline counterparts.

Term insurance plans in India | Benefits

• Term life plans are easy to understand. The terms and conditions of these policies are simple and comprehensive even for the beginners.

• These plans are affordable and come with flexible payment options including regular and single sum premiums.

• These plans offer basic life coverage therefore they are affordable. Some insurers offer additional riders like accidental death and critical illness insurance at additional premiums.

• Some insurers provide attractive introductory riders like premium waivers, critical illness covers. Also you can get female critical illness covers and free accidental covers during events like terrorist attacks.

• Select a policy with a time frame of 10-40 years of policy period. One can get coverage for maximum 75 years of his/her age.

• Term insurance plan is tax-friendly. You receive tax benefits as per Section 80C of Indian Income Tax Act.

Online term insurance | Right approach

Online term indemnity is easily discernible even for the novices.

Prior to buying term indemnity, calculate the sum assured amount you need and premium amount you can pay.

The easiest way is to visit the insurer’s website. They mostly provide free online premium calculators for assistance. You just need to choose a suitable policy. And then fill up details like age, preferred sum assured amount and tenure. After completion, you’ll get probable premium quotes.

After paying the 1st premium, you’ll get an email or confirmation call. The insurer can also send a KYC or know your customer form. It shows the authenticity of your personal information, residential address, etc.

Depending on your age, you may need to undergo a medical test. Keep in mind that results of your medical test affect the premium rates of your term plan. If some unknown medical complications evolve in the medical test then you can either pay the additional premiums or revoke the policy. Always provide correct personal information and medical history while buying any online insurance policy.

Confused over diverse term insurance rates? We will provide an easy solution

Did you know that term insurance rates differ by more than 40% across several companies in India? This brings to a simple conclusion that getting term insurance at the lowest possible premium and maximum coverage is important. However, deciding from a cohort of diverse rates where each company claims of best of the offerings, it may become little difficult.

After reading this article, you will understand how to choose an appropriate policy from the clutter of policies available in the market. The purpose is to help you take informed decisions and get the most reliable term insurance plan in India.

Further you can browse through relevant points which will help you in selecting the best and the safest term insurance policy in India.

Make a prudent beginning-

It is a famous saying, “Prudent beginnings give fruitful results.” The same applies to when selecting your term insurance provider. You should get term indemnity only from an insurance company which is valid as per the IRDA-Insurance Regulatory and Development Authority.

An insurance agent may not always be the best option for the following reasons-

·         The plan recommended can be way expensive

·         He’s more likely to recommend you something where he can get a higher commission.

Term plansprovide low commissions to agents. Since, last few years, term insurance rates witnessed significant cut by 40-50% thanks to increased competition & lower mortality rates.

Buy term indemnity online in the quickest manner possible. The benefits include-

·         One can easily compare features and prices of several term insurance plans

·         The process is simple & fast

·         Most companies enable all documentation & medical test reports to be delivered to the insured’s home

·         Most insurance companies favor lower commissions for online sales. Hence, you can get term insurance plans at lowest rates which can save you 30% money than the offline way!

·         One can easily pay his premium via credit card or net banking

The most important query regarding the validity of sum assured- answered: (after reading this you’ll know the conditions for the beneficiary to receive sum assured)

Consider that the policyholder survives throughout the policy duration. In this case, the risk cover will be terminated. Therefore, there won’t be any amount paid to the policyholder nor his dependents.

However, if the policyholder dies during the policy period then a sum assured amount will be paid to the policyholder’s dependents. The insurer will pay the sum insured amount to policyholder's dependants or the one who is listed as the nominee in the policy.

Conjecture-

Tern insurance plan can be looked upon as savings plan or as a protection cover.

It’s a good investment option for retirement benefits.

One surprising fact is that products like ULIPs and insurance are looked upon as long term investment options. However, their very basic function which is to provide insurance or protection is ignored to large extent.

Note- The distributors tend to sell policies unfairly. They sell policies just to obtain higher commissions by charging higher annual premiums to the buyers. Hence, it is important to take the help of professional to avoid such problems.

Online Term Insurance India: Benefits Of Selecting A Suitable Plan

Term insurance is ideal if you want to save money and avail life coverage for a particular time span. Term policies offer insurance coverage for a relevant tenure at fixed rates of interest and premiums. The prime goal if a term policy is to provide life coverage and reduce all the financial responsibilities of the policyholder. A term plan is an affordable and hassle-free life insurance that gives instant protection and flexible payment options. Lowest premium rates and availability on online term life plans are the important reasons why people choose theses insurance plans. Buy a suitable online Term Insurance policy and avoid all the troubles that usually accompany its offline counterparts.

Why go for online term insurance India?

Online term insurance India has become the easiest way to get a suitable term insurance policy. It is because online you can browse through all the good insurers within minutes and finalize your pick. And when you get a suitable online term insurance plan in India you get the following benefits-

Benefits of getting online term insurance India:

• Term insurance plans are easy to understand. The terms and conditions of these policies are simple and comprehensive even for the beginners.

• Term insurance plans are affordable and come with flexible payment options including regular and single sum premiums.

• Term insurance plans offer basic life coverage therefore they are affordable. Some insurers offer additional riders like accidental death and critical illness insurance at additional premiums.

• Along with life coverage, these plans reduce other financial responsibilities of the dependents like mortgage, business or education loans.

• With online term plans you can buy a customized coverage at your convenience. You can also choose online payment options for the policy premiums.

• Some insurers provide attractive introductory riders including waiver of premium, critical illness, female critical illness, free of cost accidental death and death in terrorist attacks.

• Choose the suitable policy tenure from 5 to 40 years. With term life, you can enjoy insurance coverage up to 75 years of age.

• Use your insurance policy as a tax saver policy. These plans give tax benefits under Section 80C of Indian Income Tax Act. How online term insurance works

Online term life is simple and comprehensive even for the novices. When you decide to buy a term life policy, the first thing to do is to calculate the sum assured and affordable premiums. You can easily do that by visiting the website of your preferred insurer. They provide free online premium calculator for your assistance. All that you need to do is to choose the suitable policy and fill in the required details including your age, desired sum assured and tenure, medical information and other personal information. After filling in the information, you will get estimated premium quotes.

After you pay the initial premium, you will get a call or confirmation email. The insurer may also send a KYC (know your customer) representative at your home for additional details including personal information and other documentation. Depending on your age, you will need to undergo a medical test. 

The 7 Vital Aspects of Term Insurance Plans in India

We all know about life insurance plans. Term insurance is one of the simplest forms of life insurance plan. Its fundamental objective is to provide financial security to the family members after the demise of the policyholder.

Term insurance is a policy type which is the purest type of life insurance policy. As stated before, its basic objective is providing financial security subsequent to the demise of the policyholder who acts as the main wealth provider for his/her family. Hence, a sudden demise of such policyholder can put the family members under terrible situation, who may not be able to bear huge debts like mortgage loan, children education, etc. In such scenarios, term insurance acts as a savior which takes care of such huge expenditures when the bread winner is no more able to provide.

Term insurance does not provide anything if the insured survives throughout the policy term. However, there are term plans named as ‘Term With Premium Back policies’ which enables the insured to get back all his premiums. These plans however require more premiums.

Further, you’ll learn the 7 vital aspects of term insurance plans in India.

Advantage of getting multiple term insurance policies-

It is beneficial to get two term plans say for 50 lakhs than an individual plan of 1 crore. In this way if either of the policy reduces its premium rate you will benefit from a lower premium.

Listing the policy beneficiaries

One should list those family members or dependents who feels are more vulnerable whether it’s spouse, children or parents. Account for specific percentages of the sum insured to different beneficiaries.

Deciding the sum insured amount

According to a fundamental rule, the person who is under 40 years should aim for a sum assured value of 15 times his yearly income.

For a person who falls between the age bracket of 40-45 years, he/she should aim at sum assured value of 10X his yearly income.

The person who is above 45 years should aim for sum assured value of 5X his yearly income.

Determining the policy duration

As per the thumb rule a younger person must aim for longer policy duration. There is a simple formula which gives an idea about the policy duration for a particular person of particular age.

Formula: Desired Retirement age - Present age

The right time to buy

There’s no specific time to purchase term insurance.  In fact the right time is now. You should purchase one when you’re healthy so as to avoid greater premiums. Also don’t forget to mention any kind of existing ailments you’re going through. Otherwise, the insurer can refuse to underwrite the risk and grant lower premiums to you if it discovers any medical discrepancy in future which was not informed earlier.

Importance of additional riders

It is beneficial for people to take advantage of rider options to get additional necessary protection. You can take help of critical illness rider for cover against severe accidents. People with disability problems can take help of Permanent Total Disability rider.  

Combination of Savings and Risk Coverage

Term insurance also acts as risk cover and as saving elements. It is advisable that each policyholder should assess their requirements, needs and the amount of income that they are willing to invest, before deciding on which type of insurance product to buy and invest in.