Term Insurance Plans – 20 different policies compared with charts !

Which is the best term insurance plan in India ? Which Insurance company has the best claim settlement Ratio? Should you buy online or offline plans ? These are some of the questions which comes in the mind of every insurance buyer! .

So are you looking for Term Insurance comparison at one place ? Do you have all the sufficient information to decide which is the best term plan you can buy? Today I will show you all the data like riders, maximum/minimum tenure, max age till when these plans covers a person and data on the premium, Claim settlement Ratio at one place! .

Best Term Insurance plans in India – A comparison List

There are many term insurance plans in India, but all of them have different premiums and features which confuses a prospective customer to choose the best term plan for him. Below is a table which shows most of the policies name along with their premiums. But before that, make sure you fully understand what is a term insurance plan ? Better read the 9 most asked questions about Term Insurance before you move ahead.

Company Name Policy Name Mode Riders Available Premium
(1 crore SA)
Aegon Religare iTerm Online Yes 7,300
Bharti Axa e-Protect Online No 7,300
Aviva i-Life Online No 7,368
HDFC Life Click2Protect Online No 10600
Kotak e-Preffered Online No 10825
Edelweiss Tokio Life Protection Plan Online Yes 11,500
Metlife Met-Protect Online No 11,600
ING Vyasa My Term Insurance Offline NA 11,891
ICICI Prudential i-Care Online Yes 13000
DLF Pramerica U-Protect Online Yes 13,400
SBI life Smart Shield Offline Yes 16,798
Bajaj Allianz iSecure Online Yes 18400
Max NewYork Platinum Protect Offline Yes 23,500
IDBI Fedral Termassurance Online No 25,350
LIC Amulya Jeevan Offline No 33,600
Future Generali Smart Life Online No NA
Birla Sun Life Protector Plus Offline Yes NA
Tata Aig Maha Raksha NA NA NA
Reliance Term Insurance Offline NA NA
Canara HSBC Life Pure NA NA NA
India First AnyTime Plan Online NA NA
Sahara Life Insurance Kavach NA NA NA
Star-Union Dai-ichi Term Plan NA NA NA

Note : The premiums above are for 30 yrs old non-smoking male, and 30 yrs policy tenure. The premium quoted is for Rs 1 crore sum assured and does not include service tax. The premiums displayed were taken from respective life insurance companies websites and should be treated as indicative premiums.

Brief overview of Riders

Most of the term plans also allow riders along with their plans. Riders are nothing but additional benefits which you can take by paying some extra premium. Lets see some of the riders and what they mean. A term insurance plan might be offering some of the riders mentioned below.

AD (Accidental Death) : The policy pays you additional sum assured in case the death happens due to an accident . Note that even if you don’t take this rider, the sum assured is always paid on death, whether accidental or not !.

CI (Critical Illness) : This rider gives you a lump sum amount if you are diagnosed with an illness which is mentioned in the policy . Generally all the major illnesses are covered in Critical Illness cover.

DR (Accidental Disability Rider) : This rider covers you for disability and pays you Sum assured in 10 installments per year  incase you becomes temporary or permanent disabled person.

WP (Waiver of Premium) : This rider makes sure that incase you are not able to pay future premium due to disability or income loss, the future premiums are waived off , but your policy is still in force like always !

Claim settlement Ratio of Life Insurance Companies

While deciding on a term insurance plan, the biggest point which a person concentrates is the Claim settlement ratio (read this comment) . Claim Settlement ratio of a company tells you that how many policies were settled by paying back the claims in case of death. However note that these numbers are not for pure term plans, but for any kind of policies.

Solvency Ratio of a Life Insurance Company

Another small things to look in a life insurance company is Solvency Ratio. It indicates how solvent a company is, or how prepared it is to meet unforeseen exigencies. It is the extra capital that an insurance company is required to hold to meet all the claims which arise . In other words , Solvency margin refers to the excess amount of asset the insurance company has to maintain over its liabilities. Basically, it is the amount the insurer has to stash away in order to pay the claims during emergency. IRDA requires the insurance companies to maintain a particular level of solvency margin for their smooth functioning

Below is the Table and a Chart showing Claim Settlement Ratio and Solvency Ratio of all the insurance insurance company in India. The data is taken from 2011-2012 IRDA annual Report.

Company Name Claim Settlement Ratio (2011-12) Solvency Ratio
LIC 97.4% 1.54
ICICI Prudential 96.5% 3.27
HDFC Life 96.2% 1.72
SBI life 95.5% 2.04
Kotak 92.1% 2.67
Birla Sun Life 90.9% 2.89
Bajaj Allianz 90.6% 2.86
Max NewYork 89.8% 3.65
Aviva 89.6% 5.4
ING Vyasa 88.8% 3
Bharti Axa 87.7% 2.14
Star-Union Dai-ichi 86.2% 6.7
Reliance 84.6% 1.66
Tata Aig 83.9% 2.16
India First 82.2% 6.36
Metlife 81.4% 1.69
Canara HSBC 80.6% 3.07
Sahara Life Insurance 78.0% 4.82
Future Generali 68.1% 2.21
IDBI Fedral 67.5% 6.6
Aegon Religare 66.1% 3.22
DLF Pramerica 24.5% 2.53
Edelweiss Tokio 100% (Just 1 policy) NA

Claim settlement ratio of Life  insurance companies in india

Term Insurance – Online vs Offline

With online term insurance plans coming in market, two things has happened. First, Customers have really got excited seeing very low premiums which insure them at throw away prices, however low premiums does not appear on the top wish list of customers and what everyone needs is very high claim settlement ratio and excellent customer service. This is where online term policies have disappointed customers, there has been huge disappointment from ICICI iCare and Aegon Religare iTerm Plan in terms of customer service. There have been cases where customers bought an online policy and after that, they had horrifying experiences starting from increase of premium once they bought it, No-response from the company for long duration and Long & frustrating delays in medical tests. This is what pisses off customers most and they get a feel that If situation is bad at the time of buying the policy, then what will be the response when their families for claim settlement .

Another important point which comes to a persons mind is Are private Insurance companies safe ? and what is the claim settlement ratio of the company. From last year IRDA report, we came to know that Aegon Religare did not settle even a single claim out of total 7-8 claims they got . However, this years IRDA report (2009-2010) shows that its better at 48% settlement ratio for Aegon Religare, but Life Insurance is not a maths exam where 90-91% marks will make people happy. We all need 100% or 99% at least !. Because most of the companies are very new, the trust factor is missing from public. Note that not everyone who bought term insurance policies had bad experience, there are many buyers who got very good response and good customer service, but it was a smaller section .

So if you a kind of buyer who understand Insurance very well and how things work in this area and you also have trust in online term plans then you can go for online plans. But if you are not comfortable with it, then you should try the old way of buying insurance through an agent. However it would cost more than online plan, which many are comfortable with! .

If you concentrate on the claim settlement and trust factor then the only option is LIC of India Term Insurance (Jeevan Amulya). However if you are fine with the pvt Insurance, but still want the best features, I personally see Kotak-preferred Plan as a good option. The premium for Kotak-preferred is the lowest in the offline term plans and this plan has good riders along with other good options.

Term insurance plan from LIC is obviously the best option if you do not believe in the pvt companies and insist on high claim ratio, but premium for LIC term policy is too high . So I think you can consider a mix of the LIC term insurance and any one from Pvt insurer. Soon you will also see LIC online term plan

Special Features in Some Term Insurance Policies

There are some policies with very different set of features. Lets have a look at some of the those. These features can help you further in your decision.Term Insurance policy features

Which online term plan do you have currently and incase you planning to have one, which one those the above will you buy ? Will it be LIC Term Insurance or some one else and why ? Also share, If you need any other factor before choosing the term plan ?

1,767 CommentsAdd Comment

  1. Manish

    Very well researched article.

    My 2 cents on selection of term plan:

    Kotak Preferred term is least expensive term plan available offline. Its death claim ratio is bit lower than LIC but premium is just half of LIC term plans. If you give right information at the time of taking policy – there is hardly any chance of getting claim denied. Claim settlement normally stuck when you or your agent have filled wrong information or hided things. We normally suggest that one should divide their sum assured in 2 policies from different insurers. It’s having 2 benefits – first it gives flexibility if you want to reduce your sum assured in future due to any reason & second which is bigger benefit in case one of your claims is denied your representatives can reach ombudsman & show that other insurance company has cleared the claims on same grounds. This increase chance of getting claim.

    • Thanks for your suggestions on Kotak . Why do you say that its death claim is “bit lower” than LIC. Most of the people would call it huge ! . 95% to 87% is huge ! . Is it not !

      Manish

      • @ Mainsh

        No it’s not huge – for few reasons:
        87% is superb – if we consider how agents fill these forms.
        Average claim settlement ratio of private cos is less than 85% – kotak score is better.

        Averages some time creates illusions – average age of your readers is 28 but their can be a reader of 98 & also 16.
        But still let me add few more averages 😉
        Average claim per policy:
        LIC Rs 73775
        Private Insurers Rs 172000
        Kotak Rs 298382
        We can’t directly compare LIC with Private Cos due to 2 reasons:
        1. The kind of small sum insured policies that LIC sells
        2. Establishment date of Cos – older policies will always have a better death claim settlement ratio.

        • neeraj saini

          sir,
          if you say lic sell small sum insured it will be wrong rather we can say that private companies focus only on high sum.

          • Neeraj

            No , I thinks its appropriate to say that LIC sells low SA . we are talking about pure term plans here and the average term plans SA is in range of 30-40 lacs . Its the right SA for most of the people . I would say every that is less .

            Why do you think pvt insurers focus only on high sum ? Examples ?

            Manish

            • Tarun

              @Hemant, @Manish

              The above claim settlement ratios which Manish has shown I believe are overall company-wide across various products i.e. ULIPs,endowment/term plans etc.
              Considering Kotak or for that matter even ICICI/HDFC.; if you see the number of and type of policies people buy here are mostly ULIPS. Actual number from agent I talked to says about 70-80%. Now given that these ULIPS are costly and mostly people buy around for 10-20 years; claim settlement is not a problem for the company as the cost is already covered within first 3-5 years so its easy for the company to settle the claims.

              Given this background I think actual term insurance claim settlement ratios will be far less. And I doubt most private companies add lot of verification activities which make claiming difficult.
              After all these private companies do need to make profit and the investors would like to see how many rejections have been made to maintain their balance sheet.

              LIC on the other hand even though a money making entity the basic idea is govt. promoted to help people insure their life.They dont do that exhaustive verification when claims are made i believe.

              • Anurag

                well said Tarun
                the contribution of Lic of India can not be overlooked
                Lic of India has always taken responsibility towards Indian Economy,

                we as a policy holder should not think only about the return.
                when we think about the safety of our fund
                there is Only One entity that is LIC
                as per political situation of India, Lic is secure than GOVT.

                • Jayant Bhat

                  Any comments on latest scandal of LIC housing. Basically, any government backed institution cannot rule out corruption and scandals at peak.

                  LIC is purely trading with citizens sentiments stating it is Govt backed company. If it was worried about India and Indian Citizens, could it not get into the cheapest term plan business. Is it not governments responsibility to offer life cover at most affordable prices. LIC started playing with peoples sentiments, making huge profits by selling endowments and mostly endowments for over half a decade.

                  Hence it is not doing a favour by helping govt when in crisis. Its is our own money which they have looted for years. They have always thought about their profits.

                  If LIC has guts and public responsibility, then let it launch a campaign to offer the cheapest term plan in India.

                    • gaurav

                      “Is it not governments responsibility to offer life cover at most affordable prices.” – > No. It is not. Where does this say in the constitution? It is hard to fathom that a person interested in personal finance and investing would even make a comment like this.

                  • Akshay Telang

                    completely agree !

                    cant find a better example of “mass public looter” in india than LIC..
                    its agents are very well trained to sell “absolutely useless” and “difficult-to-sell among-the-knowledgeable” low-returns policies to ignorant (mainly) rural folks by playing with their sentiments and hiding the crucial benefits of other useful policies…
                    no wonder they are sitting on huge cash reserves as many people (especially rural) fail to continue premium payments and avail maturity / death benefits.. i hav myself seen thousands of such examples !!
                    i dont knw much abt businesses of pvt insurance companies… but LIC no doubt a big public looter !!

                    Akshay Telang

                    • jignesh

                      I AM VERY MUCH AGREE…LIC IS LOOTER

                      I HAVE TO SAY ONE THING…LIC IS ESTABLISHED MANY YEARS AGO…NOW THE FIRM EARNED LOTS OF MONEY..AND IF IS GOVT COMPANY THEN THEY SHOULD GIVE CHEAP PLANS TO PEOPLE ..WHY THEY DONT DO THAT? AND MOST OF THE PEOPLE IN RURAL AREA DONT KNOW THE EXACT AMOUNT (SA) NEEDED WHEN ONE EARNING PERSON DIED …
                      THEY JUST LOOTING THEM ONLY ON THE BASE OF THEY ARE BACKED OF GOVT.
                      ( I AM NOT ANY AGENT FROM ANY COMPANY).
                      I JUST WRITE WHAT IS SEE AND UNDERSTAND.

                  • moonlightdriver

                    really what would you want to say abt satyam scandal etc which affected millions of small share holders……
                    A no of cases are pending on relience, shara group etc

                    corruption is beyond the scope of this paltform given by manish lets not beat around the bush

              • Ashutosh Gangrade

                @Tarun !

                Yes , Tarun I am agree with your article .
                Most of the agent of pvt insurance companies want to sell ULIPs
                due to higher incentive paid by company.
                Hence the contribution of ULIPs in this claim settlement table is much higher .
                But in LIC , incentive for all plans (ULIPs , term and traditional plans) are approximately same.
                Even in case of traditional and term plans an agent will get incentive for longer time than the ULIPs.

              • No, you are absolutely wrong LIC does make exhaustive verification when claims are made. Their Death claim procedures are very cumbersome and are not decided at the branch but goes through their higher offices following stringent procedures.
                It is a in the interest of the public so the employees go a step further to pay out maturity and other benefits. The checks are made ready well before due date , each and every policy holder is traced. (you would have to use channels like previous office, just dial, telephone directories, agents, etc. because all policy holders do not come to claim their maturities on time).
                So the LIC claim ratio has a great experience because of the sweat put in each and every month.

            • vijay

              Many Pvt Life insurers sell plans with high SA and with Minimum premiums rates which are always high and which is not affordable for most of the people( common man).Why they focus on High SA? they want more premiums collections and if they sell small SA plans like LIC the average premiums will be less.

            • Hi Manish

              I am of 29 years old working in BPO company and it has been one year when i purchased LIC term insurance plan for 50 Lakh and half yearly premium is Rs 8772. Earlier i was not aware of the claim settlement ratios of ICICI and Kotak but now they are seemed me more reasonable than LIC. Please suggest was my decision to buy LIC term plan right? Should i continue this plan or changed to some other plan as it has been only one and half month? Please suggest

              Thanks & Regards
              Shyam

        • Sam

          Dear Hemant,

          Really Meticulous! Eye opening! Leads to break generalisations. Where did you get these details?

          Thanks for your contribution!

        • Animesh

          Hi,

          When we talk about claims settlement we must understand its type. IRDA never bifurcates death claims and maturity claims. LIC has been working for >70 years so people have been investing since long back. That makes more numbers of maturity claims too. Most of the private firms are new in this sector so its pretty obvious that they will have lesser percentage. For them its more likely a death claim in the report as they are not there for 15/20 years to include the maturity claims and increase the counts.

      • Tarun Mittal

        Manish

        Thanks for providing such valuable information with regard to term plans. It has helped cleared many doubts in minds of layman like us. My age is 33 years old and i am planning to buy a one crore term insurance. Although i have zeroed on in Kotak Preferred Term, i am yet to take the leap.

        I still have some questions in my mind which i would like to ask you :

        1. Why does LIC charge such a heavy premium for the same product and so, why is it so uncompetitive in the term insurance market?

        2. (this is a logical corollary of 1st ques)
        Why and how does private companies like Kotak charge such low premium and how do they survive? Do they refuse claims on miniscule things and issues?

        3. What precautions should one take while providing information while filling the application and other papers before taking the policy?

        4. I am told that the company will carry out a nicotine test for detection of nicotine in blood, and other very exhaustive tests to ascertain the profile of the to-be-insured. My ques in this regard is:
        a) what tests are generally carried out?
        b) who foots the bill for the same?
        c) once the company has carried out the tests and has issued the policy obviously on the basis of those tests, how and upon what grounds in the world can the company refuse to pay claim? Isnt it in our own benefit also that the tests are carried and whatever reports come, are actually being acknowledged and accepted by the company before issuing the policy? Doesnt it provides a shield for us as well against refusal of company to pay claim?

        5. Supposingly the company goes bankrupt or runs into losses or other financial trouble in futute, is our insurance safe? is our sum assured safe? Are there any specific provisions in law for the same? In other words, how do we ensure our peace of mind with regard to companies like Kotak, when the sole purpose of buying the insurance is to guarantee financial security of the family and peace of mind as well?

        I and many readers would be really thankful to you for providing answers to the above questions.

        Regards,
        Tarun Mittal

        • Tarun

          1) Because of thier mortality tables which are very old … Thier data depends on the old information about health , so hence they are still charging higher premiums .

          2) No company is charging you less, every one is charging right premium + their profit margin , they have revised mortality rates + they have online option also which saves them admin costs + agents commission .

          3) Just make sure you give all authentic info ..

          4) companies bear the expenses for everything . This test is generlaly to make sure you are healthy and to find out if they need to increase the premium or not ,.. There are several things which cant be known by your medical test , like bad medical history , if you have some medical issue before 3 yrs or things like that .. and most of the rejections of claims are because people give wrong information while taking the policy .

          5) generally i am not sure of the guidelines .. but incase a company ius getting bankrupt or anaything like that , its taken over by other .. but anywyas you should go with compnay which you TRUST

          Manish

          • Tarun Mittal

            Manish

            Thanks for answering my questions.

            Given my age (33 years) and my requirement (one crore insurance), which according to you will be the best option for me?

            Also, as regard to riders, you have suggested to somebody that one should take 50% as base cover and 50% as a rider. But if you take example of Kotak, the riders cant exceed ten lacs. What is to be done in such a scenario where one is looking for a one crore insurance and the riders available are no more that 10-15% of the total sum assured.

            Tarun Mittal

            • Jitendra Wagh

              Hi Tarun,

              In my opinion, you should go with two different insurers if you are getting yourself such a high cover, say 50-50Lacs each. This will take care of the risk factors involved.

              Cheers
              Jitendra

            • Anurag

              HeyTarun
              Tell us what u did regarding ur policy
              did u buy that policy and from whom? Did u take a single one crore policy or wat?
              waiting and hws ur experience

          • CA RAJIV SAXENA

            MANISH, FATHER DIED IN 1989. AS PER DEATH CERTIFICATE, CAUSE OF DEATH IS “RESPIRATORY FAILURE”. SHOULD I MENTION IT IN PROPOSAL FORM FOR TERM INSURANCD. I WILL DEFINITELY MENTION IT IN PROPOSAL FORM, WHAT WILL BE THE CONSEQUENCES? WILL PREMIUM BE LOADED?

          • Murali S

            Tarun and Mainsh
            This is my answer to concern number 5
            All the insurance companies are required by law to deposit a surety sum of 100 crores to IRDA before they can start functioning precisely for this reason. Further in case if they are taken over by other companies, the protection of the policy holder would continue as per the original policy details.

          • Krishna Kishore Appala

            Dear Tarun ,

            This is answer for your 5th point.

            According to the government policy , if a new private firm want to enter into the insurance business , it has to be collaborated by another “International firm” , which is in same insurance business from past over 100 years.

            For example : You can see ICICI + Prudential (US firm , from 1875)
            Bharati + AXA (Europe , from 1816 )
            Bajaj + Alianz (Germany , from 1891)
            Birla + Sun Life (Canada , from 1865)
            Tata + AIG (China , from 1919) etc

            So , the risk of company defaulting are minimal (i say negligible).
            This is solo reason why government has passed that rule.

            So , just figure out the claim ratio , and no need to worry about company defaulting.

            Thanks and Regards
            Krishna Kishore Appala

              • NSK

                Vishal,
                SBI is not a small player like a newly entered private insurance co. Besides its govt. backed. So relatively less risky. its indias largets banking co.
                Regards,
                NSK

      • Sandy

        Term insurance is long term, 20-30 yrs. Insurance sector was opened up in 2001 when most private companies got their licenses. So the max policy term holder in private companies would 10 yrs while avg holder might be around 5-7 yrs.

        The rejection ratio is higher in case the policy is recent. The portfolio of LIC is much more balanced and hence its rejection ratio looks better.

          • Sankha

            Statistics and number can surely mislead sometimes. Just as far the numbers go, like to mention that, in the claim settlement ratio calculation, pending cases should be excluded ( as its results are not known). But here: caliam settlement= claims paid/ total claims ( utterly wrong). Excluding pending cases, claim paid ratio of LIC will be 98+. But most imp, it will move HDFC, Kotak to 95% and ICICI to near 97%.

      • Rishi

        Hi Manish,

        I am a 39 year male – smoking (abt three /four cigarettes a day) -looking for a term plan cover of Rs. 1 crore. Have looked at LIC Jeevan Amulya but its very expensive – my agent estimated the premium to be Rs. 1 lakh – however on looking at the claim settlement ratio data, am a little apprehensive of going to pvt cos – what do you suggest? I would prefer giving all info upfront so that there are no hassles –

        If pvt cos have to be considered – then am looking at HDFC Standard and Birla Sun life as their claim settlement are the highest and also they are financially sound -dont like ICICI much – any thoughts?

        Not necessarily looking for the cheapest option –

        • Rishi

          There are other options like Kotak , Aviva also . there claim settlement is also good . LIC is also coming up with its online term plan , it would be cheaper than offline option

          • Rishi

            Thanks Manish for your useful reply. Will do check Kotak. Have some more questions:

            1. Is Rs. 1 cr cover good enough? My current annual income is between 40L and 60L – am a practising CA – Have two daughters, non-working wife and dependent parents – other LIC policies sum assured is about Rs. 90L.

            2. LIC is covering upto 70 years – whereas pvt cos covering only upto 65 yrs. Is term cover necessary after 65 yrs?

            3. LIC also covering death from terrorist attacks and natural disasters in Jeevan Amulya plan – but pvt insurers not. Would u think i should give weightage to this?

            How much should be my term cover and should i look at private companies?

            Thanks.

            • Rishi

              1. The first thing you need to see is how much assets and worth you already have ? If you already have enough , then there is no need for insurance . But if you need it , you can use our calculator to find out what is the right cover for you : http://www.jagoinvestor.com/calculators/html/Insurance-Calculator.html

              2. NO , 65 is good enough age to be coverd . remember that life insurance is to be taken only till the time some one is financially dependent on you . Better you grab my book and read it

              3. those are low probability events , but you can give weightage to them ,. but most part of focus should be any other kind of deaths. Even some pvt insurance company have those coverage .

              Manish

    • heman artist

      Dear Dhawal,
      thanks for the prompt reply and i am very much releived now after your answer,as you mentioned that KOTAK people has refused for CIB(critical illness benifit) rider does that mean that if anything happens to me realted to heart issue they won’t pass the claim to the nominee, and have you heard of any other similar sort of case where they have approved the proposal.

      Heman.

      • Dilpreet Singh Bagga

        Dear Heman, i would like to take an opportunity to answer this.

        CIB Rider as the name suggests is an additional coverage one takes in case of critical illnesses like:

        • Heart Attack (MI)
        • Cancer
        • Stroke
        • Coronary artery by-pass graft surgery (CABG)
        • Kidney failure
        • Major organ transplants
        • Paralysis
        • Loss of limbs
        • Aorta surgery
        • Major burns
        • Heart valve surgery
        • Blindness

        Denial of CIB rider means no extra sum assured will be paid in case of demise of insured due to the above mentioned critical illnesses. If the insurance company chooses to insure you after knowing your medical history, they cannot reject claim to nominee. Moreover, most of the time, rejection of claim only happens when there is a non-disclosure of fact.

        As rightly mentioned by Dhawal, kindly mention all facts to the insurance company and then they can take a call.

        Regards,

        DP

        • Amol Chavan

          CIB cover is to make sure that ones family will have to expense a lot on the critical illness and even after that a person expires then it help in recovering the expense cost. But you can increase the coverage if you held bend on taking insurance from company which do not allow CIB

  2. Sud

    Hello Manish,
    Excellent comparison between different companies and their term plans+claim settlement ratio. I have just went for LIC Term Plan with 9060 yearly premium 30L risk cover few days ago , because I think even in future I need to increase my risk cover because of inflation, I would go with other private players, which might be 5-10 years down the line, giving me enough time to look at the claim settlement ratio of these companies. I decided after lot of thought, and I feel I am very much right :). Plus your comment about it at the end encouraged me! Thanks Manish :)

    • Sud

      Good to know that you already have the term plan for yourself ! . However just wanted to know if that is sufficient at this point of time ? If anything has to happen today to you , will the term plan from LIC be good enough to cover every thing for your dependents ?

      I think its better to get covered for the higher amount if the situation demands , what do you say ?

      Manish

  3. steven

    Very nice informative article as always.
    Last year I had come to know about Term Insurance from this blog.
    I think in one of your previous post or some other website there was a reference to the Annual Report by IRDA. I had seen that the claim settlement ratio of LIC was the best (95.48% in 2008-09 pg no:146 ). So i had taken the Amulya Jeevan plan in jan 2010.
    Personally i feel the most important thing is the Claim settlement ratio.
    From the list above
    – The cheapest insurance is MetLife which costs 5450.
    – LIC Amulya Jeevan costs 14600.
    The difference is 9150 which comes down to 762.5 per month.

    Now since we are taking a term insurance to protect our families from
    the liabilities which might arise in case of death. The Settlement of the claim becomes the crucial factor. Even though we pay an extra amount to 762.5 per month ( which is equal to the cost of 4 to 5 movie tickets in metros ) we can be at peace that in case of death the large sum of money would be given to our family.

    Instead of saving those 762.5 rupees per month and investing or spending somewhere it would be wise to pay for a peace of mind.

    • Steven

      Yes , that makes sense . But the difference is huge in rupee terms and percentage terms compared to the cheapest one . What are your opinions on mixing the insurance . one from LIC and other from metlife ?

      Manish

      • steven

        Yes i plan to take another term insurance when my liabilities increase.
        currently i am single and no dependents. Later when i have liabilities i will take sbi shield with increasing cover or some other with high claim settlement ratio.

          • steven

            i took the policy this year because the premium is less. i took a 35 year 50L policy. Actually right now there are no liabilities so they do not need that much money now :)

            Steven

            • Steven

              I am still not sure and hence want to do a small exercise . Can you list down with steps A,B,C … if you die today how that 50 lacs will help your family , how much will make up for monthly income , how much for paying off debt , how much will help in investment for your children future ! . Can you do that .. a short one .

              Manish

    • Suresh

      I agree with you. Most of us have atleast one LIC development Officer or LIC Agent in the immediate family. On our death we can be assured that they will help us to get the claim. This assurance will not be there for pvt. players.

      • Vish

        Suresh, Your assumption is that God forbidden something happens to the person insured then the Agent will take care/help.. But what is the guarantee that the Agent will be there(alive) when this incidence happens…..
        I think this assupmtion should not be the basis of your decision..
        Open for comments..

        • basu

          actually i feel vish is very true and to the point. even if lic agent is alive, i personally believe they roam around u until they are getting something out of it, like premiums u pay and more and more policies they introduce u with.
          ultimately, no company is better than others. it basically depends on what true information u provided them and what they can show not to settle ur claim. if they will not find any flaw, they have to settle and if they are finding something- may it be lic or any insurer – they will deny ur claim. so i think we need to discuss more on
          1) what companies look for to deny claim – can any body elaborate on it?

    • Shirish

      Steven,

      Instead of spending that amount of Rs 762 on movies, you can invest it in some other financial tool; so that even if the claim is rejected in furure, your family could get this invested lump-sum amount.

  4. Rakesh

    Manish,

    Excellent article, very nicely put. Thankyou for your efforts.
    I have an old term plan from LIC, recently did not renew my Aegon religare term plan and canceled Icici iprotect plan as i was not satisfied by their service.
    The next choice that i have is Kotak.

    Rakesh

    • Rakesh

      I would suggest dont get too disheartened with the bad service. As the online model is very new in India , it might take some “extra” time , but let it go through and what a big deal if it arrives 2-3 months late in your hand .

      Even kotak will not be that great in service for its online term plan .

      Manish

  5. Jitendra

    Hi Manish.
    You have written a self explanatory and unbiased article. Kudos for it.
    I have taken LIC Jeevan Amulya policy. And I will consider to get another policy from PVT company.
    LIC has a huge trust factor. So I don’t mind at all paying little bit extra premium to LIC. No why I am calling it ”little bit” is due to the fact that we are taking term insurance for death benefit. And small amount few hundreds should not matter.
    Thanks a lot.

      • Anunay

        Hi manish
        I would suggest that we should not have 2 term plans from different insurer simply because higher the sum assured, lower the premium(Per lac). Taking 2 policies would simply not cost effective and great idea.

        As far as claim rejection is concerned, i dont think that if everything is declared correctly, insurance company will not reject the claims. Afterall they reinsure themselves with Insurance reinsurance company to reduce their risk.

        • Anunay

          There are pros and cons of getting 2 insurance policies. If you dont want to get it from different insurer , then you can take it from the same insurer, it just gives you a flexibility to reduce the cover later incase you want to .

          Re-insurance by insurance companies is nothing to do with our claims directly, its just another way for them to reduce their risk .

          Manish

        • Anurag

          Anunay
          if you declare every thing about your health and living habbitts
          the insurer will definitely load extra premium as per their policy underwriting rules
          thats why some of very normal wrong declarations are always been possible.

  6. rahul

    Excellent article Manish and great contribution from other readers as well.

    I have couple of questions
    1. Can NRI’s buy Term Life Insurance?
    2. How can they buy them and what would be the process of claim settlement if needed?
    3. In the first chart, Kotak Preferred has “X” in all the 4 categories (AR, CI, DR, WP). How is this policy better except lower premium.

    Forgive my ignorance.
    Regards,

    • Rahul

      1,2) Insurance companies requires few things for giving term plans.

      a) Person is required physically for medical exams
      b) Address proof in India
      c) some source of income in India

      If NRI’s can provide these , he can get term plans

      3) Despite of being offline , its premium is very very low , it also have all the riders and its settlement ratio is also good , not the best but seems to be good . these few things itself make it good , not much apart from this .

      Manish

      • steven

        I am an NRI. i have LIC Amulya Jeevan
        It takes just 1 day to apply and 1 day for medical test which would be done at one of their related hospitals. You could ask the agent to come along with you for the medical test.
        Unfortunately i received the policy document after 3 months to my india address. Later on you can pay all your premiums online.
        Also Dont forget to take a proof of your income outside india.

        Steven

        • Prasanna

          Steven,

          I think that if you are a NRI & you do not have a source of income in India you cannot get a term Plan in India. This is what my agent told me some 3 years ago !
          You said above “Also Dont forget to take a proof of your income outside india”

          I guess your agent has not mentioned in the application form that you are a NRI.

          Any comments Dhawal or Manish??

          • Prasanna

            Incase agent has not mentioned that a person is NRI and the person is actually residing outside India , the claim will be rejected and it should be rejected also as its a stright case of hiding of facts, either by the actual customer or agent , doesnt matter .

            Please re-check the facts

            manish

      • pprajru

        @manish, thanks for the article!
        i also plan to buy term insurance, so am digging the info on web & found the following results
        in my view,

        4) kotak’s max rider amount is 10L only whereas in sbi’s it is upto SA,

        also
        i) solvency ratio of sbi is more then kotak’s (refer statement 18 in irda report)
        ii) in sbi, additions to new policies are more then deletions whereas icici delitions are more then additions whereas kotak is having additions nearly equal to delitions (refer statement 8 in irda report).

        so my preference would be :
        #1 sbi
        #2 kotak

      • Mayur Modi

        Hi Manish / Rahul,

        Ofcourse NRI can buy LIC and other career policy.

        Just to bring your attention here, most of NRI apply for Green Card / Permanent Residence and they disqualify from LIC policy .

        Source: http://www.licindia.in/nri_centre.htm

        # NRI should not be a green card holder. He/She should not have applied for or planning to apply in the near future for acquiring citizenship of his /her present country of residence or any other country.
        # It is clarified that People of Indian Origin having foreign nationality and residing in foreign countries (PIO) are not considered as NRIs for the purpose of allowing insurance. Rules applicable to PIOs are given in the last paragraph.

        Thanks,
        Mayur Modi

    • Mayur Modi

      Hi Manish / Rahul,

      Ofcourse NRI can buy LIC and other career policy.

      But just to bring your attention here, most of NRI apply for “Green Card” / “Permanent Residence” and they disqualify from LIC policy .

      Source: http://www.licindia.in/nri_centre.htm

      # NRI should not be a green card holder. He/She should not have applied for or planning to apply in the near future for acquiring citizenship of his /her present country of residence or any other country.
      # It is clarified that People of Indian Origin having foreign nationality and residing in foreign countries (PIO) are not considered as NRIs for the purpose of allowing insurance. Rules applicable to PIOs are given in the last paragraph.

      Thanks,
      Mayur Modi

  7. jig

    Good one manish,
    should we buy term plan with riders or without riders?

    As some of them having riders and some havent, what we should do in such cases where riders are not available?

    BDW excellent gathering. its looks same like as on apnainsurance.com. don’t you think so? :)

    keep sharing..

    nJOy

    • Jig

      Should you buy riders or not is not a question ! . Its for you to answer . Do you want them ? Tell me what happens if you take term insurance, but you become disable , it will not pay anything if you dont have disability rider with that . So its something you have to answer that you want it or not !

      Manish

  8. NARESH SHARMA

    Good one Manish…we are sensing Health Insurance may be on the same lines…our needs and requirements grow faster than anythings…

    A big clap for well researched article!

  9. Senthil Nathan

    Kudos for an Excellent Article Manish.

    After reading several articles in blogs related to Term Insurance My Understanding regarding Term Insurance is that Term Insurance Premiums tend to decrease over period of time.So I guess it will make sense to take the policy for smaller periods and then purchase a new policy at the end of the coverage period rather than going for a single policy of a longer period.

    Any comments on this idea ?.

    Regards,
    Senthil

  10. bharat

    i struggled almost for one month to get this data.. I bought KOTAK term plan this month through agent and satisfied too after reading this data and your views for KOTAK.

    Post is very nicely illustrated which is easy to understand and compare. :-)

    I must appreciate your effort for every post.

  11. srg

    hi this is timely. just planning for term insurance and had shortlisted kotak and hdfc. Also debating the online and offline option

  12. nitin

    Hi Manish,

    Excellent end to 2010 with such a important article !!

    I have Birla Dream plan life cvg for 25 yr term…I am 31 yrs old..I am paying a premium of 17k per annum for a coverage of 70 Lac with no riders..I bought it 2 yrs back.
    I am not sure if it’s really a term plan..but when I bought it premium was very competitive to term plans.

    Thanks again for excellent article.

  13. S Pani

    I have taken a LIC Jeevan Anmol Policy @30 lakhs ,Premium:Rs.21,510.00.age:39yrs.Now I am 42yrs old, & intend to take a Rs.1 Crore policy but I find that the Online policies are not vailable at Rourkela,Orissa.The off line policies have quoted very high premium.
    I am in adilemma.
    S.Pani

  14. Hi Manish,

    Execellent article manish , gives in depth idea of Term Plan, I have already bought a term plan plan from Kotak around 3 years back for 25 Lakhs . Planning now to go for LIC Term Plan for the same amount. I think even though the premium is high in case of LIC , most of us would prefer LIC due to the claim settelment ratio which is quite better then the private players
    A superb article from you !!

  15. Mitr Singh

    Hi Manish,
    Thanks for wonderful article.
    I am planing to take a term plan but due to some confusion i just took it on hold. My mind is going for LIC Amulya Just because of Claim settlement ratio, trust factor and I will not mind to pay some extra for peace of mind. I agree with you for 50:50 (Lic : Pvt) but the first 50 is LIC and later will go for some other one.

    Great going Manish, May god bless you.

    Mitr Singh

  16. Prasoon

    On SBI website, premium (without any rider) for 30 yrs old male comes to 9161 for 50L for SBI Smart Shield Level Term Assurance Policy. You have mentioned 14,567. Am I missing something here?

  17. Shilpi Chaudhry

    Hi Manish,
    your research on term insurance plans in the market has been really enlightening. My husband plans to have 2 term insurances of 50 L each. we have concluded to ICICI prudential, Aegon religare & Kotak. Pls suggest if this is the right choice or we shd make changes. we r in a fix..
    thanks for ur help!
    shilpi

  18. gaurav

    Manish;

    Excellent article. Well compiled.

    In my case, I already have a term insurance policy from ICICI. Over the next couple of years I plan to sign up for another one and will at the time look at the feedback on the online policies. Who knows, maybe LIC will start an online policy by then too.

    It would be good to see the claim settlement ratios of the pvt companies split into online / offline policy settlement though I doubt they are obliged to provide it.

    • Gaurav

      Two points.

      1) You cant expect LIC to come up with online term plan ,thats not going to happen ! . LIC has huge network which reaches all over and its structure is such that coming up with online term plan is anti-LIC and its Govt owned ! :)

      2) IRDA does not publish the different data for offline and online plans , it just publishes the total claim settlement numbers !

      Manish
      Manish

      • jig

        why you need different claim ration data? i mean is there any different methods they are following for processing claim considering type of buying?

        i dont think so..

        • gaurav

          @jig;
          Just to see if the “agent hand holding” during the claims process has any real impact. I went to ICICI’s branch and spoke to the branch manager there about another policy. I asked him that with their iprotect rates so much better than the offline rates why should I go with the offline policy (through the branch). His answer was “with the offline policy, the branch will be there to help the nominee with the claims process while there is no such help with the online process. Having a agent helping you is so much better”. I just smiled and said you sound like the LIC agent who was trying to tell me why I should go with a LIC policy v/s ICICI’s.

          In anycase, knowing the offline v/s online settlement ratios is more a curiosity.

  19. Sunil

    Guys,,
    The discussion on the term is very informative here.. thanks to all.
    In my case, I have planned everything for my family like
    bought 2 plots for my 2 kid – for future education purpose
    planning to retire early by age 40 itself ( 35 now ) with 40L in hand which to be invested in POMIS with monthly income as 30k for rest of years leading a simple life as a private college lecturer in my home town( not a city )

    So the question is do I need term insurance now though I have set a permanent income to my family. Please suggest on this..

  20. Krish

    Very informative article. Obviously LIC is way ahead of others. I understand the table refers to claim settlement ratio for all types of policies in general. The ratio further comes down for the private players if the comparision is done for term insurance alone. In this context, even the 50:50 argument may not be a great suggestion.

    • Krish

      I think if we seperate it for term insurance, it would be low for LIC , because for pvt insurers term plans are big chunk as overall percentage . For LIC endowment plans make huge chunk

      Manish

  21. Arindam

    Hi Manish,
    It’s an amazing co-incidence that by the time I completed my research on Term insurance with riders (which is today morning) that I saw this blog and the recommendations are same. I feel confident that I am on the right track. And thanks a lot for making it easy to choose for millions of ordinary folks like us.

      • Arindam

        I have almost decided for Kotak Preferred along with CI benefits. I’d have gone for an online one (ICICI Pru followed by Aegon Religare in that priority), but since they don’t have riders, I am trying out Kotak preferred first. If there are any surprises etc, I’ll keep you posted. Thanks once again.

        PS – Smoking kills, and till then makes you pay more premium!!

        • Arindam

          Forgot to add one more thing – just as information for fellow visitors – that I already have good life cover from the company I work (for which I guess I don’t pay any premium). This nw insurance I am going to get is kind of additional (mostly for home loan protection along with rider). If this was my first term policy (and given the fact that I am a smoker), I’d have probably got an LIC (because of high settlement) inspite of high cost. So as you rightly suggested, fellow investors should probably split between LIC and private.

  22. Harish

    Manish

    Kudos to your effort and detailed analysis on term insurance plan. I believe it will help many of us in choosing the right product.

    I must say time to time you have produced many good and wonderful article, and I think this article you can put in ‘Hall of Fame’ :)

    Thanks & Regards
    Harish

    • Harish

      thanks , I do not consider this as the best one . As this is just a knowledge article, I consider those articles as hall of fame which is regarding psychology changing , which you generally dont read anywhere .

      This particular article can be done by anyone who can spend some time finding information on internet !

      Manish

  23. sb

    Very good article. Much effort has gone into putting the data together. Congratulations!

    Are you planning on doing something similar on health insurance sector? That would be of benefit to a lot of people I am sure.

  24. Dhawal Sharma

    MANISH – Now this is what i called RESEARCH PAPER..Excellent and Superb..I have forwarded the link to many of my clients..Just two things i want to add..
    ONE, if you have filled your form properly and provided accurate information/documentation while applying for the insurance, and later on the claim is GENUINE, then there is no way on earth that claim will not be settled (Irrespective of the claim settlement ratio)..
    SECOND, IRDA report with its claim settlement ratio part, nowhere mentions it to be DEATH CLAIM SETTLEMENT RATIO..major chunk of the LIC policies are endowment or moneyback policies which are settled very nicely by LIC (In some of the cases, final amount cheque – post dated – reaches the client even before the last date of policy) and most of these endowment and moneyback policies are running for last so many years so they get settled very smoothly. So this factor should also be kept in mind that its not DEATH CLAIM SETTLEMENT ratio but just claim settlement ratio..If somehow death claim settlement ratio be procured for every insurance company, then on an average, every company will come around to 90% to 92%..

    By the way, the IRDA report portion which you have produced above in your article shows CLAIMS REJECTED and CLAIMS PENDING by LIC are 17750 and combined total of PVT. PLAYERS for these two catagories is 6500 (Major culprits are BAJAJ, ICICI PRU, and MAX)..huge difference, isn’t it..and the ratio comes out to be 75:25 in favor of LIC for CLAIMS REJECTED and CLAIMS PENDING..means out of every 100 claims rejected or pending in the insurance sector, LIC accounts for 75 of them 😉

    • herge

      Dhawal,

      Agree with your points but this:
      “If somehow death claim settlement ratio be procured for every insurance company, then on an average, every company will come around to 90% to 92%..”

      is pure speculation. Since you work for Kotak let us know what it is for Kotak.

      • Herge

        I think the fine. As most of the companies major market is endowment or ULIP’s , term plans are smaller section , so if we just look at term plans death claim rejection ratio , it should be in range of 90% . Thats my way of concluding it . What is your counter argument on this point ?

        Manish

          • Herge

            Yes , we need data for that 10% rejection , but we can guess it very well and its “Wrong information or incomeplete information” at the time of filling up the form , you can see many people want to not disclose that they are smoker or have some illness , I dont understand why they feel they are smarter than companies .

            Manish

          • Herge

            Yes , we need data for that 10% rejection , but we can guess it very well and its “Wrong information or incomeplete information” at the time of filling up the form , you can see many people want to not disclose that they are smoker or have some illness , I dont understand why they feel they are smarter than companies .

            companies do not give segregated data to IRDA on this .

            Manish

            • jig

              Well,
              take an example that i gave wrong information. that for what purpose they do medical test?
              and once the medical test done by company means they are aware with the medical condition of the applicant. and they accept the proposer with that condition.

              now after 10 years i die, how they can reject the claim on basis of wrong information? what is that criteria, what they are gonna check?
              Manish, i think this information will be quite useful if you can publish here.

              Dhaval

              how the kotak treating such cases? can you elaborate that procedure for claim settlement?

              thanks

              • Jig

                The medical test they do are not quiet detailed , it does not catch major things . So if you are smoker or had some illness in past (but not at the moment) , the medical tests are not able to catch it . The medical test they do is to make sure they catch some things which even you might not be aware .

                Manish

                • jig

                  can dhaval say something on this?
                  i mean still i m not fully agree or satisfy with answer.

                  Whatever tests they followed , it must be the minimum requirement for accepting the proposer by applicant for getting insurance. In short they are ok with the details filled in and they have cross varified by doing medical test of applicant. also as per IRDA they have 2 year span to complete varify those details.

                  Waiting for the Dhaval’s reply on this as he is attached to one company.

                  Regards

                  • Dhawal Sharma

                    There are certain medical tests depending upon the medical grid under which the applicant is falling. For eg: anyone below age 35 will be catagory A (The Doctor will visit the client at his home and take blood/urine sample, normal height-weight-and BMI etc.) and so on according to the medical grid..Higher catagory client has to visit the medical center in the vicinity of his area affiliated to Kotak Life where different tests can be done like ECG, TMT etc..

                    Now medical tests are done to check the physical health of the applicant at that point. But there are various other medical factors as well (Family history of BP, Heart Problem, Diabetes etc) and some other personal factors such as smoking-drinking habits and history of such usage as well as work related hazards etc..

                    Because of all those details, many of the applicants skip a part or two (Stating that his/her mother died a natural death whereas it was heart attack – nonsmoker, where as applicant use to smoke heavily at one point)..And all these missed information add up to a big issue..

                    Plus always a factor of early claim..Any claim arising within first 2 years of the policy are treated as early claim and the cases are investigated thoroughly and there is every chance of some misinformation coming up (Given the way clients share information + the way agent fill the form)..

                    And above all, this is an act of UTMOST GOOD FAITH – whatever the client is disclosing is taken at face value by the insurance company and will only be treated as MIS-INFORMATION if there is a strong evidence later on to prove that certain material information was supressed knowingly/intentionally…Minor information undisclosed is not a big issue..Someone said his mother died a natural death and later on, that person (Policyholder) dies due to heart attack and later on company, in its investigation came to know of this thing, it will be a strong ground for refusal of the claim..

                    BOTTOMLINE – Accurate and proper information given, and genuine claim CANNOT be declined by any company anywhichway

                    • Basavaraj

                      Hi Dhawal,
                      Adding few more points to your answer. If insurence company come to know at any point of time that the insured person puposely hiden materiel facts then they can terminate the policy at any point of time. So, it is allways better to be fare while declaring materiel facts.

                    • Dhawal

                      Thanks for the answer , it clearly explains the things .

                      I would like to add that anyone who does not want to provide right and full information should stay away from term insurance, there can be a case where a person does not want to disclose the facts fully and also wants company to not reject the claim , its a foolish wish .

                      Manish

                  • Jig

                    The first point is that, insurance is a proposal you are putting to insurance companies . So its your responsibility to give all the facts and figures and make sure they are right . Its not companies responsibilities to make sure everything as Life Insurance is not like Mutual fund or any investment product which is proposed by Company .

                    Manish

                    • Jig

                      thats good to know.

                      Dhaval:
                      Once i filled form by myself only providing each and every minor detailed mentioned in form,provided all required documents then why again kotak require/ask to sign three different papers( like smoker/alcoholic/ working in hazardous area). all details i have put in form and signed that means whatever i declared is correct from my side.
                      Second thing, Is it correct that once i cancelled the policy with KOTAK i cant take insurance again from KOTAK? Neither online nor offline?

                      Regards

                      Jig

                    • Jig

                      Hello Manish,
                      I got the reply from company and i share here to know wether it should be like this? That was the reason i asked directly Dhaval as it is regarding KOTAK.

                      regards

                      Jig

                    • Dhawal Sharma

                      @JIG – Sorry, didn’t read your query earlier..Can you please put it one more time..

                    • Jig

                      Hello Dhaval,
                      i am doing copy paste of reply from KOTAK.. i havent any prob with this reply but it sounds strange so just needed your two words on this.

                      “Sir currently we would not be able to provide you the medical documents as you have cancelled the policy with us .( THIS I CAN UNDERSTAND)
                      Sir currently you would not be able to avail either the e- term plan or the normal term plan through us, due to the cancellation ( HOW IT SOUNDS LIKE?).”

                      regards

                      Jignesh

                    • Nitin Agarwal

                      Hi Manish,

                      My cousin (Age 40) is interested in Term Insurance of Rs 5 Crore. Online I found that premium (including taxes) of ICICI iProtect is Rs 1,11,955/- and Metlife MetProtect Rs 1,67,892/-. I know both policies are to be pruchased Online and there might be delay in receiving it. I’m asking him to go with ICICI iProtect as it is cheapest. If you can please advice whether it’s right decision or there is any better policy. Also his annual income (ITR filed) is around Rs 6 Lacs but he has assets worth Rs 1 Crore. So for income proof does Insurance company also consider assets?; if yes then what are the documents required for the same.

                    • Nitin

                      I think there will be issue with him getting 5 crore of insurance , companies have some internal rule of limits . If your friend income is 6 lacs , the company might restrict the limit of insurance to 20 times or 25 times (depends on them) , So 1.0 crores or 1.5 crore looks a resonable insuance for him .

                      Manish

                    • Sunil Date

                      If he already has assets why does he require insurance ? Insurance is for protecting future income for dependents. He has to be using his knowledge and skills to earn an income which will be lost in an unfortunate event; that is the income which has to be covered. The one crore assets will still remain for his Dependants.

                    • Nitin Agarwal

                      Sunil,

                      Your point is valid but he needs insurance of 5 Crore & he has assets only of 1 Crore…

                      Manish,
                      I’m surprised that assets are not considered by Insurance company while deciding Sum Assured :-(

                    • Dhawal Sharma

                      @MANISH/NITIN AGGARWAL – I can say with authority about KOTAK LIFE INSURANCE and not every insurance company but i hope this will hold true in most of the cases..

                      In KLI if someone is going for a big SUM ASSURED, The client is required to fill two seperate forms along with the proposal form..One is FINANCIAL QUESTIONNAIRE form and second one is MEDICAL ADDENDUM form..In FINANCIAL QUESTIONNAIRE form, client is requested to disclose his ASSETS and LIABILITIES to ascertain his NETWORTH..ASSET side asks for BANK BALANCE, FD/RDs, VEHICLE BY HIS NAME, PROPERTY BY HIS NAME, SHARES, MFs, INSURANCE, GOLD etc and LIABILIATY side asks for LOAN (PERSONAL, BUSINESS, PROPERTY), VEHICLE LOAN etc..So yes, valuation of ASSETS and LIABILITIES are also taken into consideration for deciding upon NETWORTH of an INDIVIDIUAL for HIGH SUM ASSURED TERM PLANs..

                      Please note, i am telling this for KLI and not sure about other insurance companies but i believe more or less, they too will be following this procedure..

                      Dhawal Sharma
                      URJA WEALTH CREATORS

                    • vassu

                      There has to be set of standard questionaries and declarations in the application forms across all the insurance companies.
                      A central government agency should monitor and settle the claims. I dont understand why government is not doing this.

                    • MPG NAMBIAR

                      asset and insurance are two different things. so argument that if asset is there why insurance required is incorrect. eligibility of higher sum assured (inclouding the need) should be checked. AML guidelines will come into picture.

                      thanks
                      nambiar

                    • Deepak

                      Thanks for the quick response..You have provided excellent information for comparison of term plans..I am also looking for such kind of information for standalone critical illness plans..The info that i am looking for is
                      a)Incase i am not taking a term/life insurance plan and i need a critical illness policy ..is it better to take a standalone critical illness plan or a Health plan with critical illness rider?
                      b) Is it better to take a standalone critical illness plan from a Life Insurance Company or General Insurance company for ex HDFC Life vs HDFC Ergo..Inputs will be appreciated.

                    • Kapil

                      Deepak,

                      Very recently Bharti AXA has launched triple benefit Critical Illness Insurance.
                      You can consider it.

                      Kapil

                    • mithun

                      Dear Manish,

                      very informative article.

                      I want to upgrade by SBI term plan by swiching over to combination of LIC and SBI or Kotak for higher sum assured. could you please advise between kotak & SBI or should i go with only LIC.

                      regards,
                      mithun

                    • Abhi

                      im 44 and im planin to buy a hdfc online term plan..iv not had any health problems as such..the application form has some serious questions related to any heart conditions etc etc…as far as i know i dont have any major health risk…but then i hav not had a medical check up so i dont know the exact conditions..so in tht case how do i answer these questions..???as far as i think i am required to write wat i know or am aware of right???
                      and suppose the company comes to know later tht i had any complication while taking the policy but it was not in my form as i did not know it,will this complicate things???
                      Wat about habits after taking the policy..do I have to tel the company??

                    • Abhi

                      IF you already know about the health issues at the moment , better put it in forms and anyways they will do that medicals if you are taking it for more than 50 lacs .. Better not leave the things like this as this can be issue

                      Manish

                    • Naveen Kumar

                      I want to buy Life Insurance Cover for my parents, my dad is 58 and my mother is 56. My mother is a diabetic patient. I want a good policy which can give a cover of atleast 50 lakhs. Can you please let me know which is the best policy.

                    • vijay

                      Dear Manish Sir
                      Your suggestion and advice is too good for everyone
                      my mother 56 years old we want to purchase the term plan of rs 50 lacs
                      she is pensioner approx 19000 per month . kindly suggest suitable term plan
                      online or offline

                    • Vijay

                      She can take it , no issues ,but I dont think she should take it , first the premiums would be really high , and she will anyways not get it over and above a limit age

                    • Tushar

                      HI Manish
                      Thanks for this. I never thought of this option. Actually you have saved my lot of money.
                      I have decided to buy Accidental policy separately now in spite of taking term insurance clubbed with rider as it is comparatively cheaper.

                      I went through your post for this and found Bajaj Allianz’s Personal Guard is best from all perspective but I am not sure whether your report showing SA=200% in case of Permanent Total Disability is sure or its typo error.

                      I have visited companies site and found that maximum SA is 125% in case of Permanent Total Disability. I may be wrong but dont want to take chance with this.
                      So can you please confirm me this?

                    • Geet

                      Hi Manish,
                      I have taken a 50 L Term Plan from ICICI Prudential, the concern is that the policy was taken online and the payment towards it was made by someone else’s card(1 st premium) as I was not aware of the clause of taking it from my card at that time.I have paid 2 premiums, the 2nd payment in cash.Kindly confirm
                      1.whether this policy is valid
                      2.If I want to take a higher SA and not continue with the 50 L policy, should the details of the 50 L policy be mentioned in the new policy.

                    • Geet

                      1. NO , its not a big worry , but ideally you should give money from your source only , How will you claim the tax deduction when you give it from some one’s card ?

                      2. If policy is ACTIVE , then you have to . If you close off the first policy and then take a new one , then you dont have to

                    • Geet

                      Thanks Manish for the quick response.

                      But kindly clarify

                      1. Is the policy valid if the 1st premium is paid by someone else’s card. Will there be a problem at the time of claim?

                      Also, If I state the details of a policy while taking another and the first policy lapses then will it have a bearing at the time of claim of the second policy.

                    • M Saha

                      Dear Manish
                      Thanks for your support to all on their quieries. I have a question. I like to have term insurance of total 2 crores, 1 crore from each companies. Following are the shortlisted companies. Please suggest with your preferance. I am a bit confused to choose.

                      1. Tata AIA (low claim ratio)
                      2. Bharti Axa (relatively low claim ratio)
                      3. Aviva (relatively low claim ratio)
                      4. SBI Life (better claim ratio, but slightly costly)
                      5 Kotak (better claim ratio, but slightly costly)

                      Regards

                    • Ram

                      Hi Manish,

                      Thank you for a great, detailed information. Recently, I had been approached by ICICI Prudential about a term plan with a quotation that is less than HDFC life/Kotak. In your response you were recommending Aviva/Kotak. Is there any specific reason you’re not recommending ICICI PruLife?

                      -Ram

                    • There is nothing like that, you can go with even ICICI .. I just took 2 names , and its obvious some company would not come in that 2 names. As far as you give right information while taking up the policy, you can go with any company

                • Maalan

                  Manish,

                  Very informative article and good discussion.

                  The discussion says that medical tests are carried to catch certain major illness that exist at a point of time. For e.g. the form / application asks for eye sight. It keeps changing over a period of time. Will there be any problem in getting the claim settled in those cases on this ground. Your views please.

  25. Hari

    Hi,

    I am having Kotak preferred Term plan for 50 Lacs (for 30 years). I am paying half yearly premium 7846 (yearly 15,692). In your article the premium looks 7,252 per year. I am currently aged 32 and started this plan on 28. Why the difference in the premiums?

    Thx
    Hari.

    • Hari

      How was your medical test ? was it normal or there was some problem , they might have increased the premium . It might be increased in you are a smoker . Also the case may be that earliar it was higher and now its reduced . you need to enquire on this . Let us know what was the case !

      Manish

      • Hari

        Hi manish,

        I am non-smoker. During medical test there was a second test for HepB which i am affected. But can i continue with this amount or switch to some other product ? anyway i will verify with them..

        Thx
        Hari.

        • Hari

          If there is some medical issue, then the premium will be higher only , infact now if you go to another one , they will charge more premium as your age is higher now compared to the time when you took the policy . You can take the quotes !

          Manish

        • Dhawal Sharma

          @Hari – As you have mentioned that you have taken up Kotak’s TERM PLAN about 4 years ago, want to share the fact that Kotak’s premium quote for term plan were slashed by almost 40% around Feb 2010..So if you will calculate premium at KOTAK site today with your date of birth you will find the difference..

          • Dhawal

            Is it not companies responsibility or professional behavior that they adjust the customer premium also when the old premium changes, What is the logic of continuing the old premium for older customers ?

            Manish

            • Dhawal Sharma

              @Manish – these changes are not with retro-effect..They are effective from certain particular date..Otherwise everybody having ICICI term policy will ask ICICI to alter their previous premium to the level of I-PROTECT..

              • Dhawal

                Yes , i understand that offline term plan permiums can be made same as iProtect . ok i got it now .

                As kotak preffered term plan is already giving an agent his commissions , the future changes cant be incorporated into the older policies .

                Is that the meaning of “retro-effect” ?

                Manish

                • Sujit

                  Dhawal/Manish
                  I have been paying a premium of 9k for Kotak Preferred Term Policy from last 4 years.
                  What should I do to change it to new one with cover of 50L with lesser premium.?

                    • Sujit

                      Thanks Manish,

                      But following the other conversations, I was just trying to judge if there are any riders for doing the same. :).

                      I would be opting for this new arrangement soon.
                      My heartfelt thanks for starting out with this thread.

                      Regards
                      Sujit

                • Pramod

                  Manish,

                  Thanks for the wonderful article. I was searching many websites for this info as am planning to take one.

                  Had you mentioned SA also know, it would have been even better.

                  Pramod.

  26. shashank kashettiwar

    Very nicely put Dhawal! What you say about the death claim settlement is very very correct. Nobody can deny a genuine death claim. The systems put in place by the regulator are quite capable of doing that and the ohter mechanisms created by the laws of the country are also there in case.
    Why people are so focussed on this claim settlement ratio bogey is quite puzzling. Splitting the covers in two so as to force one insurer through ombudsman and all that is very odd indeed even if it sounds to be sensible.
    Actually looking at the LIC’s premium figures and the claim ratio even such conclusion can be drawn that their exorbitant pricing is allowing them to pay claims generously which shouldn’t have been paid in the first place. A case of robbing a huge number of Peters ,that to with astronomically high extra premiums to pay a small number of Pauls again a paltry sum as covers. And what is so big achievement in it?
    Manish please don’t fan this claim settlement ratio bogey fire.
    The regulator and the systems are robust enough to pay up a genuine claim. And where from are we collecting all such data. From that reglator only, no? Still we behave as if the regulator is tracking all such figures for the sake of just data collection only!
    If this is the way learned and educated are behaving even after receiving so much wisdom from this blog – being influenced by the ‘trust factor’ in a single company, it is not a surprise that in our country ‘blind faith’ is such a prevalent factor influencing the uneducated and the rural populace in big way.

    shashank

    • Shashank

      I myself agree with Dhawal and your comments , and for number of times I have advocated the same, but as you said , common man does not think this way and have blind faith in LIC .

      Manish

    • Sachin

      Hi Shashank,
      I think you missed the bus completely.I have an answer to your say doubt why do even educated class is going for LIC and not pvt isurer.
      Take this case -> Why does one buy insurance or for that Term Insurance?
      In order to ease the financial burden when he/she (the insured) is not there.
      Now just imagine,what is the state of the dependants if they have to run from pillar to post of pvt insurers to get the claim settled.
      If the policy has been taken from LIC,there are 100s of agents around (friends,relatives,friend of relatives,relatives of friends…take ur pick) to help the dependant family members in getting the claim settled.
      I had taken Term policy from Reliance Life.
      When someone told me,just imagine what is ur mom or wife are going to do to settle the claim when you are not around?
      I was shocked to imagine that.
      Bottom line:Go with LIC not just for some fancy statistical thing (I know death claim ratio of LIC would be around the same as pvt insurers),but for the “ease” of procedure when you are not around.

      SAchin

      • Dhawal Sharma

        Dear Sachin,

        I can bet when you say “SOMEONE told you to imagine”, that someone is an LIC agent 😉

        How can you be so sure that while making claim to private company, you have to run from PILLAR to POST and in case of LIC, the claim amount will come to the house via speedpost?? It does not happen that way sir ji..There are certain formalities to be completed to get the claim amount, both at PVT COMPANIES as well as LIC..

        Secondly, why do you think an agent will help you or your family members when you people have not taken policy from him?? If you have taken a TERM PLAN of LIC from agent X for 20 years and policyholder dies after 12 years, that means agent X has taken commission for those 12 years..So how/why would agent Y (as you put it Friends, Relatives, friends of friends, relative of relatives etc..)would help the greiving family members of a deceased policyholder when he has not had anything for 12 years and neither will he be getting anything by RUNNING FROM PILLAR TO POST to get your claim cheque??

        Please understand, each and every insurance company is here to do business and make profits, and they can survive only through satisfied customers..So each company tries its best to keep its policyholders happy and satisfied by providing timely assistance and only in case of some genuine mistake/fraud do they stop the claim and that can happend with anybody, PVT COMPANY or LIC…

        Dhawal Sharma
        URJA WEALTH CREATORS

        • kasi

          recently we had a death in my famiy (my father). He had 2 different policies, one with LIC and other with ICICI prulife. When we claimed, we got the claims settled in a month or two. But LIC procedure was a bit stringent. My father died in an accident.

          So we submitted the death certificate and FIR from Police station. ICICI claim was processed with this information. But LIC people want both attested by the related authorities. In that sad moment, we had to send some body all the way to the police station and the gram panchayat (where the accident happened) and got the attestations done (This was not so easy…The concerned person in gram panchayat was not there for a week. My person was daily doing this exercise. Even in Police station, the SI was not available. So my person had to make so many visits). After all this, we submitted the papers to LIC, then they wanted something else from Police station (from SI). Anyway, it was not that easy with LIC.

          My father was very well known person in the town (close to MLA and we know atleast 10 LIC agents), but no body could ease the stringent procedures.

          I mean, FIR copy to be attested??? who would submit a fake FIR? If they have any doubt, THEY SHOULD GO AND CHECK IN THE Police station…Not the customer when they are in sad moments.

          So I think its a myth that people think LIC claim settlements are easy. Hard to think that it only happened with our case.

          Now I am planning to buy Term insurance. I am thinking ICICI iprotect. Any comments?

  27. Sam

    Hi Manish,

    Just one more query….how does single premium fare against yearly premium.

    On a single premium policy from LIC for 35 years, the discount is coming to almost 55%.

    I want to buy term insurance for of 1 Cr, I am looking at getting Rs 50 lacs as single premium Amulya Jeevan from LIC for 35 years (till age 70), balance Rs 50 lacs split into 25 / 25 lacs from 2 other insurer’s on a yearly premium basis for 25 & 15 years respectively.

    I estimate my insurance requirement will go down over the next 10-15 years as hopefully I will be able to get my self debt free, set up a sizeable fund for my child’s education along with my retirement fund.

    Kindly advice if this strategy makes sense, I am 35 years of age & accordingly, I will have Rs 1Cr cover till age 50, Rs 75 lacs cover till age 60 & Rs 50 lacs cover till age 70.

    Thanx

    Sam

    • Sam

      Your comment that single premium policy is in discount of 55% is very wrong ! . Its not the right way of looking at it . You have not considered the time value of money .

      Its like this, You pay me 1 lacs today and and I will pay you 3k per year for next 50 yrs ! . That way you will get 1.5 lacs just by paying 1 lac , thats 50% . Right ! . In that same way when you pay Rs 1 today its the same thing that you are paying Rs 2 in next 20 yrs in installments .

      Manish

  28. Pankaj Parashar

    the first comment is… very well researched…which i dont agree with….
    SBI Life doesnt offer shield anymore…
    it has got two new plans… Smart Shield (for Sum Assured 25 lakhs & above) & Saral Shield (upto 24 lakhs)
    The premium for the given scenario in the post for Smart Shield comes out to be
    9161 inclusive of service tax…..
    Apart from that the Accidental riders offered with Smart Shield have lower premium than most of the riders offered in the market in same category…
    This is not a critique of this article…. just wanted that proper information should be given to the blog readers…..
    I havent read any comment apart from the first line of first comment..so if anyone has pointed out this..it is good…..
    I would like to request Manish to update the chart provided…. also the special feature section….
    And I guess the premiums for other companies should also be checked from their websites where they are easily available….
    then only we could call this well researched…
    P.S. : am an admirer of the great work being done by Manish, hope my comments will help you.

    • Pankaj

      Yes I accept , Actually I took the premium data from policybazaar.com and I guess it had old data. Also I think premium data here is important but this is not poeple are looking at right now , because finally they will be calculating the premium themselves .

      There is one person who pointed out this mistake apart from you . thanks for your comment . I will be changing it soon :)

      Manish

  29. pattu

    Didnt want to comment earlier since I wanted to see how others react. Her are my 2 paisa:

    1. “If somehow death claim settlement ratio be procured for every insurance company, then on an average, every company will come around to 90% to 92%..”

    If we are going to look at facts and figures the above statment in the absence of data makes no sense and is misleading. The only fact is that death claim data is not available. Period. So this a pure guess.

    2. Did you see table 12 of the IRDA report:
    TABLE 12 INDIVIDUAL DEATH CLAIMS : LIFE INSURERS (2009-10)

    So I think I can safely assume this does not contain any maturity claims
    So the privates are about 8% lesser in claim paid.

    Claim rejection ratio is a little misleading. This should be as small as possible for a trusty company and not as high!

    96.54% for LIC in your table above is the same as that in table 12 of the report. So it related to death claims. Of course death of ulip, endoment and term policy holders.

    This statement is also for deaths:
    The percentage of repudiations for LIC was quite low
    at 1.21 per cent (1.33 per cent in 2008-09) as against
    7.60 per cent (9.97 per cent in 2008-09) for the private
    life insurers.

    3. Group insurance claims are more or less the same for everyone acc. to table 13.

    4. Being honest and truthful is mandatory while getting an insurance. But this doesn’t mean claim settlement will be peaceful. One may have to go to ombudsmen if there is delay. LIC or others delays can occur.

    5. The (young) readers of this blog must realize the author, the writer of this comment and several other contributors are relatively young people. My guess is their experience with actual term insurance claim settlement is rather limited. So if you are in doubt about which policy to buy inspite of looking at the above facts seek out someone with experience.
    Seek out some who works in the claims dept of an insurance company and get off the record insight from them. This is worth the effort since we are talking about the well being of your family when you are not around.

    6. I have said several times before that I trust LIC. Not because it is backed by the govt and other usual reasons but because it is a dinosaur. I trust it not to probe too much into my policy and about my life when I die. It is likely to delay the settlement of 60 lakhs to my wife. But I have instructed her to wait for a reasonable time and then go to the ombudsmen. I have also told her she could approach someone like PV Subramanyam, Manish or Hemanth for help (for a fee of course) to get the money.

    Wish you all a happy X-mas

    • Dhawal Sharma

      @Pattu – Merry christmas from a YOUNG contributor on this blog (as you have mentioned yourself)..

      Let me dissect every fact which you have put in..Claim repudiation has gone down from 1.33 to 1.21 by LIC and private players have improved to 7.6 from 9.97..Just a bit that LIC repudiation is more or less same where as Private players are improving a great deal 😉 I was not born when LIC was just 10 years old so cannot say what was its claim settlement ratio at that time but SENIOR CITIZENs like you or other people of the same age over this blog may be able to share some thoughts but i stick to my stand that FULL & PROPER INFORMATION PROVIDED AT THE TIME OF FILLING FORM and CLAIM BEING GENUINE, NO POWER ON EARTH CAN REJECT THE CLAIM (Be it LIC or any PVT company)

      I know many people in insurance industry (Particulary from LIC) who are since long in the business and have settled claims for their clients..And first thing they say is claim will be settled no matter what, atleast on HUMAN GROUNDs..they have approached higher authorities, branch heads – zonal heads, to help them out in this case..So ONLY EXPERIENCED PERSON will be able to help out in this case, i doubt..Even experienced person will say the same thing, fill the form properly – provide all information asked correctly, and the claim will be settled no matter what..So no rocket science in this, new or experience..

      LIC is a dinosaur, YES..Its claim settlement ratio is higher, AGREED..But again sir, LIC is not be all – end all..Most of the Private players are improving and coming up..within the next decade, you will see their claim settlement ratio will be the same as LIC..till then, advice for everybody is just stick to plain fact: FILL THE FORM PROPERLY – PROVIDE ALL INFORMATION REQUIRED/ASKED – and that would be sufficient…

      @MANISH – I will be waiting for such a reply from now I KNOW WHO :-)

      • Dhawal & Pattu

        Thanks for your comment . I conclude two things from the above discussion

        1) Giving right information while filling up the form is the ultimate thing which will decide if the claim will be rejected or not .

        2) LIC has better claim settlement ratio compared to other pvt companies may be because of its size ,experience and trust .

        PS : Lets use each other knowledge and experience to add positive knowledge on comment and avoid personal attacks .

        Manish

  30. pattu

    The data you have given is death claim settlement ratio only please check page 122 (in the pdf file) of the report. Please correct the article accordingly

  31. Dr Firoz

    This is my first comment…i cannot express my gratitude towards manish in words…i am a orthopaedician who literally had no knowledge whatsoever about personal finance…

    a chance encounter with an insurance agent trying to sell an ULIP policy (which at that time i thought as a godsend) made me search the net and i came across this blog..and my life has changed completely since then…

    this is a very informative blog..what is better is the comments section..i have learnt so much, but still need to learn a ton…

    anyway in my humble opinion, every novice like me should at least read a few good books like Rich dad Poor dad so as to gain the correct perspective and then this kind of blogs will enrich him..

    Regarding Term insurance, after going through above and also tinkering with various premium calculators,

    i. take initial term insurance from LIC (costly but peace of mind)
    ii. after a few years evaluate pvt players and take term from them with riders
    iii. accidental death benefit should not matter much
    iv. critical illness and permanent disability are much more important. I have found that the CI charges are much more, so whether to take CI rider with term plan or another health plan?

    Kindly comment on my assumptions and show my mistakes (which i am sure are there as i am novice)

    Thanks again

    • Dr. Firoj

      Thanks for your comment :) . I feel honoured . Regarding your points

      1) that decision is yours if you want to go only with LIC , I would suggest read Dhawal comment on this comment section .
      2) Thats fine
      3) In all cases accidental death is highly probable, and you can get extra sum assured with a little extra cost . So depends on how you take it .
      4) I agree .

      There is a book coming on personal finance purely for Doctors by PV Subramanyam , Keep an eye :)

      Manish

      • Hello Manish,

        Very well researched and elaborate article Manish!

        I couldn’t agree with you more regarding Accidental Insurance.

        we suggest individuals to buy comprehensive accidental policy along with medical insurance policy. Critical Illness and Permanant Disability are equally important.

        Term plans certainly are best but it is always useful to diversify with 2-3 different companies. A mix pvt and public company is Ok. Most importantly the amount of Sum assured should be appropriate. Hyper or Hypo insurance can be harmful!

        Being a doctor is one of the most responsible and stress giving profession! The nature of their work always keeps them busy and occupied. They are hardly left with time and energy to take notice of their own Financial Health. This leads to ignorance and various hasty and unfortunate decisions.

        I hope all Doctors can get some unbiased advice before they take any decision with financial impact. We trust them with our lives, hope they can also trust someone with their money!

        shilpi

        • Shilpi

          Good points from your side . I am sure every profession demands high busy-ness at times , One can take help of an advisor if one does not have time to plan it themselves

          Manish

  32. Jana

    Manish,

    I bought LIC amulya Jeevan 3 years back for 25L, ICICI Prulife 15L & 10 L, Aegon Religare 10L & 10L & still continuing paying premium. All polices are in force & medical tests were conducted at the beginning. There is no medical issues at that time.

    My question here is, now my Blood Pressure levels are little increased & I’m taking medicine for that. Do I need to inform my medical status to insurance companies or keep silent ? How will these Insurance companies will react at the time of claim i.e no BP during medical tests & developed after 3 years of insurance status (in force).

    -Jana

    • Jana

      No , its not a major change in your health . You dont need to inform them on this . They should pay the claim without any issue as this is something which happened after taking the policy and not at the time of taking the policy

      Manish

  33. Balaji

    Hi Manish,

    Thanks a ton for the article. I am 31 yrs old working in a software firm. Got married recently and have a 5 mnths old girl. I have not taken any life insurance sofar. Now I am planning to take Term insurance. After some research, i have finalised the following.

    1. Planned to take SBI smart shield with 25 lakhs SA. Additional critical illness rider for 5 lakhs and Permanent disability rider for 25 lakhs
    2. After 3-5 yrs, i will take another Term insurance policy for 25 lakhs

    your comments please.

    Regards
    Balaji T K

      • shashank kashettiwar

        Balaji,
        You are going to commit a very common and grave mistake of life insurance planning. What is it? Buying 25 lakhs now and deciding to buy 25 lakhs 3 yrs down the line. This is akin to PLAYING GOD. Means as if you know for certain that nothing is going to happen to you within coming 3 yrs! Don’t do this. Start with 50 lakhs or more and then reduce it, if at all you don’t want to carry more insurance.

        (From your brief profile I would say even that 50 lakhs cover is also underinsurance, but let it be!)

        shashank

        • Shashank

          Good point , I didnt give much thinking why Balaji is doing this . thanks for bringing this up .

          May be he might be having additional responsibility coming his way in next 3 yrs like another child or some planned loan , so let him confirm what is it .

          Manish

  34. James

    The IRDA report clearly says Death claims so it does not include maturity payouts. Unfortunately for the privates and their agents LIC has the lowest claim rejection ratio. I think the table you have given above should clearly mention about this.

    A simple search ‘Death claim’ in the pdf file would have revealed this

    I am surprised to see that the research put in does not match your own previous standards. Blind followers of your blog will be misguided by such hasty work.
    This also allows agents like Dhawal to further spread misinformation.

    – A disappointed fan

    • James

      Yes , I accept I did not put much effort in finding this part , my apology . However the fact that If a person takes all the effort in putting right info while taking the policy , his claim can not be rejected still holds true . Also another point is that this death claim is for death arising for policy holders of all kind of policies like term plans, endowment and ulips and as LIC has the biggest market in Endowment plans and ULIPs which are small ticket sizes unlike term plans, the payout is not such a big issue .

      Manish

      • James

        Thanks for your reply. No apology reqd though.

        LIC does have a lot of ulips/endowment etc. compared to term plans. This has a lot to do with Indian buying mentality. The same mentality exists while people buy from private players. Private players also have business from non-term plans more.

        The key point is sums assured in non-term plans are low. So if private players don’t honour these claims how will they honour big amounts in terms plans. The reasons of the claims being the same: death.

        People don’t fill up information carefully. That is the same on an average for LIC and for other players.
        I would like to think the privates latch onto the misinformation more than LIC does.

        Yes if all information is correct claim cannot be denied but it can be delayed. High the sum assured I fear the chances for delay will be more. Sometime back shubramani.com had such a story.

        • Krish

          For those who advocates right fill up of the form, I would like to say that insurer claim/protection should be made mandatory as like in West. The insurance companies and agents should be made responsible that if they accept the premium from any person, the claim must be settled. There should not be any arguments.

          Unfortunately the mighty set-up of insurance organization and agent’s knowledge of dealing with the customers are used to counter the claims which is very unethical. After all, an individual buys few policies in whole life time. You can’t expect him to research every stuff.

          In our country a lot need to be done. I would like to see 100% settlement for all the premium payers. No less percentage is accepted.

          • Basavaraj

            Hi,

            Think one moment that around you few people are their who need Insurance cover at any cost with hiding the reality (materiel facts). In that case also you are thinking that claims must be settle without any questioning? Insurer’s ask more information or search more information about the hapening of the event when their is early claim or when they have doubt about the cliam afterwards also. So, if you think that they have to settle all the claims, then what is your say about the people who want to have insurance cover at any cost???

            • Krish

              Let insurance companies come out with all kinds of tests to understand the customer. Let them reject it, if they want to, prior accepting the premium. I am saying let the companies do their due diligence or complete investigations before issuing a policy. Once the premium is accepted, the company should take the responsibility and should not have the right to reject claim. In west, right to reject claim after accepting premium is not there. That’s the protection to the customer that am talking about.

              • Basavaraj

                Krish,
                Insurance business runs on law of average. If according to you they start to verify in all grounds to all aged people then their may be more mantainance cost which again they will suck from you. One more thing, their is a irrevocable clause in insurance. Under which insurer have the right to cancel the policy within 2 years of start of the policy if they find something fishy related to materiel facts. This clause protects both insurer and insured from escaping the responsibilities. When you are 100% genuine while delcaring about facts related to your health, income and family background then why you have to worry about rejection? They have to accept,no doubt on that either you have taken in India or outside India.

          • Krish

            Is it manadatory in US that if a person pays the premium , he cant be denied the claim on grounds of mis-information or any thing else ? I doubt it ! . but i will rely on your information and facts provided .

            Manish

    • Dhawal Sharma

      @James – Me spreading MISINFORMATION??

      Me saying LIC settlling its ENDOWMENT & MONEYBACK policy claims in such a nice way that they even send maturity cheques (Post dated) even before the policy matures is MISINFORMATION?? No sir, check it with most of the LIC policyholders and they will vouch for it..They receive this intimation months in advance to deposit policy documents which are about to mature…NO MISINFORMATION..

      My statement that 75 out of 100 rejected cases are from LIC is based on the table above produced by MANISH..Do your calculations and check if this 75% is aggegerated…NO MISINFORMATION..

      Now to the real table of IRDA report..It says LIC settled 96% claims and TOTAL PRIVATE SECTOR 85%..This ratio is greatly eschewed because of the presence of new players like CANARA HSBC, AEGON RELIGARE etc. whose claim settlement ratio is plumming around 70%..So if we exclude them (Because most of the readers over this blog – who buy pvt insurance players – are limited to ICICI, KOTAK, HDFC etc..then these companies average too will come around to 90 – 92%..Still stand by this statement of mine and mind you, again this is NO MISINFORMATION just a plain calculation by facts which you are not sure of because you are not from insurance sector..

      Lastly, when i was talking of “AVERAGE FOR EVERYBODY (Including LIC) coming around 92%, then IRDA report itself proves me wrong when it says INDUSTRY AVERAGE (Including LIC) is 95%..Yes, this is misinformation that i tried to put it at 92% where actually it is 95%..

      DHAWAL SHARMA – A disappointed and hurt fellow reader of the blog

      • james

        Dhawal,
        This is what I refer to as misinformation:

        Extracts from your post:

        1. “IRDA report with its claim settlement ratio part, nowhere mentions it to be DEATH CLAIM SETTLEMENT RATIO”
        –> Totally wrong. Just shows you have not read the report carefully

        2. “major chunk of the LIC policies are endowment or moneyback policies which are settled very nicely by LIC (In some of the cases, final amount cheque – post dated – reaches the client even before the last date of policy) and most of these endowment and moneyback policies are running for last so many years so they get settled very smoothly.
        So this factor should also be kept in mind that its not DEATH CLAIM SETTLEMENT ratio but just claim settlement ratio”

        –> First para is irrelevant (since the data is about death claims) and misleading, last sentence as no. 1 is plain wrong

        3. “If somehow death claim settlement ratio be procured for every insurance company, then on an average, every company will come around to 90% to 92%..”
        –> Same reasons as above –> Wrong. They are available in the report.

        4. Accept your last point. But more the number of policy more will be claims pending and rejected. That is why people use percentages.

        Why do I say misinformation, (its a strong word, I accept): You are an agent you should know better about what the report contains. So wrong statements from you will be taken on face value by many people. How many people have time to look at a 500 page PDF file?

        • Dhawal Sharma

          @James – My apologies that i didn’t checked the report regarding “INDIVIDUAL DEATH CLAIM” part :-(

          So again, wrong information on my part, but not MISINFORMATION (Intentionally or unintentionally)

          DEATH CLAIM SETTLEMENT RATIO individually for each and every insurance company is not there (Or is it???)..average ratio given(Inclusive of LIC and pvt players) i.e. claim settlement ratio accross the industry is 95% where as i have said it would be somewhere around 92%..i believe that is not way of the mark :-)

          Last point, again i want to emphasis that no need to be so fussy about claim settlement ratio..just fill your form accurately and claim will be settled..

          • james

            individual death claim details of all insurers are given on page 122 (in the pdf file) of the report. This corresponds to page 106 of the report.

            ps. The beauty of a pdf file is it is searchable. All one needs to type is
            “death claim” or “96.54” to get details.

            The dictionary defines ‘misinformation’ as information that is not correct. I would like to think this is the same as ‘wrong information’.

            I will however accept it was not intentional on your part.
            My point is people in the field have to be careful about such things.

            • Dhawal Sharma

              @James/Manish – i accept and apologize..as James rightly put it, me being an agent, i should be in know of things in much better way or i should have use the technology of SEARCH appropriately..would be more cautious from now on..Sorry once again for any unintentional MISINFORMATION on my part…

  35. Atul

    Hi Manish,

    This is really good piece of information. With my liabilities increasing I was planning to buy more term insurance. This information will be beneficial.

    Regards

    Atul

    • Basavaraj

      Shankar,

      Rider is the extra benefit which you will get along with SA. For example, if person take accident death rider and the person who taken, dies of accident then he will get the equal amount of the Rider SA which he opted. If accident death not occured during the period of the Term then nothing will be payble.

    • Shankar

      Riders are like “EXTRA” things you can take along with term plan , if you dont take them you will be just paid incase of death . But riders give some extra benefits for which you pay additional premium .

      Manish

  36. Pradeep

    Hi Manish,
    I had a query regarding validity of the term insurance plans outside India.
    Assuming that one buys one of these plans when in India satisfying all the conditions. And after few years, gets deputed to some other country for some period of time even though the premims are paid out regularly. If unfortunately something happens during this period, will the claim be still a valid claim? In short, is the term insurance valid if death occurs outside India?

      • Pankaj Parashar

        Hi ,

        Even informing the insurance company is about ur getting relocated is not required…. insurance is issued on the basis of the information given by u at the time of taking the policy… if any change occur after the issuance of the policy u r not bound to inform the insurance company…
        just keep paying ur premiums, although change in address is an important thing to inform if u want to receive premium due notices and all…. but now a days i think most of the companies provide that on email too….

  37. Sagar

    Again Great Job Manish…
    1)What is different between Amulya Jeevan – I & Anmol Jeevan-I
    2)I am over weight person so they can reject application for that
    3)Accidental Disability Rider is most important think but LIC not provided, what to do
    4)Right now I am 29, Is the advisable to take Term Insurance 35 years
    Thanks in advance

    • Basavaraj

      Hi Sar,
      1) Amulya Jeevan have SA cover of less than 25,00,000 while Anmol Jeeven starsts with min SA of 25,00,000.
      2) It depends on the underwriter of the company with whom you are opting to take the insurance. If you are overweight then they may charge some extra premium or they may reject the proposal.
      3) If you are interested to take accideent rider then go with the chart which Manish published and opt other companies. As you may see premium is also high with Term insurance product of LIC’s. So better to go with suitable companies which fullills your needs.
      4) My advice is to take the fullest available term, because if you want to buy the same product after few years, premium will be high with that they may ask few more things about your fitness. So while taking term insurance plan for the longest available period.

      What is your say Manish??

  38. Amit Gulati

    Hi Manish

    I have one concern with the term plan for Rs.20 Lacs I have bought from ICICI pru. While filling up the proposal form my agent specified “high fever” as the reason for my father’s death whereas he died due to heart attack caused by high BP. Do you think insurance company can reject or delay the death claim due to this?

    Thanks
    Amit

    • Amit

      The first point is that why did you allow this to happen ? Do you know the reason why Agent did this ? I will tell you . If he had mentioned that it was due to heart attack , there was a chance that your premium might have increased due to a bad family medical issue , this might have caused you to show dis-interest in taking the policy or you might turn the deal down and which might have directly impacted your agent commissions . So he made his path smooth at the cost of your insurance portfolio . tomm if you die of heart attach , the company can reject the claim saying that a part of this was because of medical history in family which was not told to them and its fair to reject your policy .

      If you were a insurance company, even you would do it ….

      Discontinue the policy now and take another one with 100% right facts and then you can be assured that your family will get the money fter you are gone .

      Please fill the form yourself . Not your agent .

      Manish

      • Amit Gulati

        Manish

        Many thanks for your response and so much patience while replying to several such queries. I will definitely take some suitable action on this.

        Thanks & Regards
        Amit

      • Amit Gulati

        Manish

        I just came to know about the “Incontestability clause in Life Insurance” which prevents the insurer, after two years, from denying liability under the policy for misrepresentations or con-cealments by the insured.

        Do you think this may be of any benefit to the family of the life assured in such a case?

        Thanks
        Amit

        • Amit

          Yes , this clause protect customers from getting claim rejected for very minor mistakes done in the form . Those things are well defined in IC-33 which is a handbook for IRDA course for becoming an insurance agent , but this clause does not mean that you can do any mistake and hide info and company can not reject the claim , if you hide big facts like you were smoker or you didnt had a good medical background , then this clause does not prevent you from that ! . So just make sure you understand that this clause not a loophole in the system which a person can use and give wrong information and then get out of it if 2 yrs passes .

          there is no alternative than provide right info in the document .

          Manish

          • Pankaj Parashar

            There is a term used “material fact”.
            If a “material fact” is not disclosed then the incontestability clause doesnt apply…..
            a material fact is a fact which might have affected the decision of the underwriting the policy…
            in Amit’s case the death of his father due to heart attack will become a material fact in case god forbid the same happens with him….
            so please do as Manish instructed, discontinue the policy…take a new one…and more importantly discontinue the agent …….

  39. Amit puri

    i was looking for all the data which is compilled by manish, thanks a lot..
    my query
    if we spilt the total sum assured for term plan in two and opt for two different insurance company will it not be expansive as in some case higher the amt the premium is lower, i studied this from on line ageon religare term plan calculator?
    second query
    except kotak which one would u like to advice me for 1 crore term plan?
    thanks and with regds
    amit puri

    • Amit

      Yes it wil be bit costly , but it gives you flexibility to reduce the cover later . but you have some plans which give you that option later

      You can look at SBI life and Birla as option for 1 crore .

      Manish

      • Pankaj Parashar

        there are high sum assured rebates in most of the term plans….
        for example : if u opt for 50,00,000 SA in SBI Life Smart Shield , u will get a 7% rebate on ur basic premium.
        For 1 cr & above, apart from this rebate one more rebate is there which is 0.25 Rs. per 1000 SA.
        other companies also have similar rebates, this is why for higher sum assured premium is lower

  40. kumaran

    If giving correct info mean no chance of claim being rejected why should one take two policies:

    I dont see why one should reduce sum assured at later time because more money is anyway good and one insurer with correct info is good enough. Also means less work to do for nominee.

    • Kumaran

      May be for you there is no case of reducing the cover, but what if some one has to ! for any reason . May be some one wants to reduct the cover onces his home loan is over in 5 yrs, what if some one wants to reduct the cover once her daughter is married and gone to other home , there can be some cases !

      Manish

  41. arjun

    I have had a ridiculous experience with an LIC Agent recently.We bought 2 fifty lakh LIC Amulya Jeevan policies in Sept 2010(My wife and I) and handed over separate cheques for the same.The money was debited from our bank accounts the next day itself.We were told that the policies would be sent to our home address in a month.Both our basic medical tests were also done(haemoglobin,blood count,urine tests,ECG).
    However,in Oct ,my wife was informed that she would need some certificate from a gynaecologist also.We then decided that as our long term plans had changed(wife leaving job),it would be better not to take the policy in my wife’s name and informed the agent.He dallied around for 2 months and then suddenly said that the policy(wife’s)has come through.We think that he faked the gynae report and pushed the policy through on his own despite being specifically asked for a refund!Is it not lack of ethics and a breach of trust on the part of the agent?Could something be done?
    P.S We do not have either policies in hand right now as they are apparently being sent to our permanent address.

    • Arjun

      Yes , its a clear case of unethical and vilation of code of conduct . The agent has fallen short of his duties knowingly . I am sure he does not want to loose his 25% from the 60-65k premium from both of you jointly , so its around 15k+ commission from him , honouring your wish would have meant that he looses 7.5k :) . So I would say you should complain to IRDA along with agent name and his agent-code (incase you dont have it , thats ok i guess, you might try to get this info from IRDA website) .

      Manish

      • Pankaj Parashar

        Hi Arjun,

        It is good for you that you have not yet received the Policy Documents…
        There is a clause called Free Look Cancellation….which gives u 15 days from the receipt of policy to reconsider your decision if u r unhappy with any terms and condition…..and in my opinion this will also include the behaviour of ur agent….so as soon as u get the policy check out the Free Look Cancellation clause and apply for the same…. u will get ur premium back after very minor deductions…
        However, I would like to advice you to have policy under your wife’s name too even if she is leaving the job, u may opt for lower Sum assured.

        Thanks & Regards
        Pankaj

        • Sunil Date

          @ Pankaj Parashar This article is about term plans. If the wife has left her job and may noyt have an income, why would she require insurance ? Curious to know ( I am discounting that she may again get a job later)

        • Sunil Date

          @ Pankaj Parashar This article is about term plans. If the wife has left her job and may not have an income, why would she require insurance ? Curious to know ( I am discounting that she may again get a job later)

  42. Arudra Kumar

    Hello,

    I have taken a SBI Shield term insurance policy in 2009. Before taking this policy, I have taken 2 LIC policies in the year 2005 and 2006. Both these LIC policies are In Force as on date.

    However, the details of these policies are not entered in the SBI Shield application. At that point of time I was ignorant that this information should have been declared (The application was filled by the agent). Thanks to Jago Investor for enlightening people like me.
    What should I do now? Need some advice please.

    Regards,
    Arudra

    • Arudra

      This is a clear case of hiding of previous insurance policies and can surely become a ground for rejection . Please update this information in your term policy .

      I would suggest close the current policy and re-take it again , I am saying this because the term plan rates are slashed a lot in recent times and you will get the same Sum assured for the less premium . Check it

      Manish

      • Pankaj Parashar

        Hi Arudra….
        Manish’s advice is very apt….
        SBI has revived Shield & come up with Smart Shield plan where in premiums are much lower than Shield…as u have taken Shield only last year, it is very much advisable to u that u opt for Smart shield & discontinue shield… u will get it at much lower premium than shield…

  43. Venu

    Manish,

    Once again, good job!! Very helpful information about term plans !!
    One question – I ‘m interested in a life cover with AR, CI, DR riders and assuming that cost/permium is not a factor, which one of the following you recommend? And why?
    1) Buy a term plan like SBI Smart shield with all three riders AR, CI, DR
    2) Buy a pure term plan and buy another plan from general insurance companies like National for accident, disability and critical illness cover?

    Thanks in advance.

    • Venu

      You can go with SBI Smart shield or Even Kotak preffered plan , these are offline options , assuming you dont want online one’s . I dont have any reason to say which is better or not. Just make sure you fill all info correctly in the form

      Manish

  44. Paresh

    Hi Manish,
    Excellent article as always. I already have Jeevan Amulya Term Insurance cover for 35 lakhs. Planning to go in for another Term policy to cover the liability that will arise out of a home loan (exceeding 35 lakhs). Someone told me to wait for LIC to come out with Mortality tables (the ones they are using were last updated in 1995) before I buy a new Term Plan. Also mentioned that all Private Life Insurance players use the same table. The new revised table from LIC will bring down the Insurance premiums.
    Questions:
    First of all, is the information I was provided correct?
    Secondly, does it make sense to wait for the revised tables (are they going to come in the next few months)?
    Tempted to give Kotak plans a try, after reading your article.

    • Paresh

      Yes , thats true , I am not sure about when it will come or if it will come at all , but their table is old and new should be there soon ! .

      I dont think you should wait, what will you do if bad thing happens in between ! . I would suggest for got Kotak or anything , atleast for 50% at the moment and rest later .

      Manish

  45. Paresh

    Hi Manish,
    Excellent article as always. I already have Jeevan Amulya Term Insurance cover for 35 lakhs. Planning to go in for another Term policy to cover the liability that will arise out of a home loan (exceeding 35 lakhs). Someone told me to wait for LIC to come out with Mortality tables (the ones they are using were last updated in 1995) before I buy a new Term Plan. Also mentioned that all Private Life Insurance players use the same table. The new revised table from LIC will bring down the Insurance premiums.
    Questions:
    First of all, is the information I was provided correct?
    Secondly, does it make sense to wait for the revised tables (are they going to come in the next few months)?
    Tempted to give Kotak plans a try..

  46. Prasad

    Thanks for an excellent article, Manish. It came at the right time for me, when I am on the look for a term plan for myself. This will be my first term plan, and I’m decided to do it the online way. I’ve decided on the iProtect from ICICI, mainly due to the additional rider that it offers. For my age (30yrs) and health condition (non smoker, non drinker, no medical illness), I’m getting a premium of Rs.9400 for SA value of 50 lakhs and a period of 30 years.
    After another 6 months, I’ll take another term plan – this time offline from LIC – for a similar amount of 50 lakhs. Please comment about my plan. Any suggestions for the same?
    Also, let me know what would be your advise about insurance coverage for my wife – right now she is a homemaker. Is a term plan advisable, or should I go for some endowment policy?

    • No term plan for her as you are not financially dependent on her at all .

      Also i would advice first go for 50 lacs cover from LIC , and then from other company , why not Kotak or SBI , why ICICI Protect ?

      Manish

      • Prasad

        I wanted to go for an online policy. That rules out SBI. The Kotak e term plan does not provide additional riders, while ICICI iProtect does. That was my only reason to choose ICICI over the rest.

  47. arjun

    Regarding posts 164/165/166 – Thanks Mr.Chauhan and Mr.Parashar for the advice.Does the IRDA really look into these cases?After all,it was a verbal instruction and the agent could just deny the whole episode.The only thing which gives me hope is that he had asked for some gynae tests which we did not go for.

    • Arjun

      I am assuming that he has some kind of written proof for what he is saying , if it was just verbal communication to agent , then it cant be proved and it does not hold any water.

      Manish

  48. shilpa

    Manish

    Good article and so is the subsequent discussion.
    Is there any drawbacks of taking an online version of the term plan , apart from the fact that the initial time taken for getting the policy could be higher ? I ask this because I have an ICICI Pure Protect plan for Rs. 50L taken two years ago which comes to an annual premium of Rs.10100
    Now for the same parameters , the iProtect version comes to a premium of Rs. 6400 for my present age. Would it not be a sensible thing to switch to iProtect ?

    Shilpa

    • Basavaraj

      Shilpa

      If the riders which you opted in ICICI Pure Protect are same with the iProtect then you may replace with existing one. Else think twice about the rider part also while taking. What is your view Manish?

    • Shilpa

      Yea .. it would make sense , considering you give a thought on what Basavaraj said below , incase you also have riders (which I think you dont have looking at premium) , just see how much badly you want those riders, if not then you can shift to ICICI i-protect

  49. Gunjan Gandhi

    Manish – Thanks for this nice Personal Finance blog.

    After reading the review of iProtect – I went for ICICI Prudential iProtect option 1. SA – 1 crore. Term – 30 years. My age 38.

    Applied for it on 4th December. Medical Tests including TMT were done by 10th Dec. Received policy on 24th December. Effective from 22nd December.

    Reason for going for ICICI – lowest premium for 1 cr amongst three online term policies + one of the best claim settlement ratio among private players.

    Have also went for 25 Lakh LIC policy – premium reciept received, yet to receive policy.

    Thanks to this blog (articles + comments) – decided to go for online, ICICI and two term policies.

    I have 3 LIC polices – investment + life type. Going to surrender it. Will get less money back than the premium I paid. But will put that money in PPF and hopefuly will recover it down the line.

  50. sk9

    I am wondering, that while purchasing a term/mediclaim insurance, would one need to declare that he has migraine? Perhaps if declared, it may be used by the company to later find a reason not to make a payment?

    • Saurabh

      Yes you should declare this , the company can not reject any claim on this as they might be charging extra premium on this . So this fact can become a reason for increasing the premium , but not rejection of claim if you have declared it

      Manish

  51. Subin C B

    Hi.,

    This is a wrong data you gathered in terms of claim settlement., as per my knowledge LIC has not done 96% claim settlement if you see Birlasunlife claim settlement is 99.89% till last july and am not sure about other companies. Please share with me if am wrong.

  52. Prasoon

    I already have a policy with A. I’ve applied for a new policy with B. I’ve declared that I’ve a policy with A. I’ve not received the ‘B’ policy yet. If I apply for a policy with C, I’ll tell them about A. But do i need to tell them about B as well, for which I’ve not received the confirmation yet?
    I hope, I am not complicating with this ABC…

  53. webhaw

    Hello Manish,
    First of all i want to wish a Great New Year…….2011. And i must say your article is wonderful and it is helping us in a big way……I have some Q’s ……
    I am 30 Years old, and planning for term insurance for 30 years term.
    What should be the correct SA ? and which is the best plan …..?
    I already have Home loan of 20 Lac and i am paying EMI for that……..

    I am also planning for Term plan for my wife (27 year old) ……What should be the correct SA ? and best plan …..for her term plan…….? as she is also working……and she is already paying separately for loan of 5 Lac…………

    In this page i found ICICI iProtect is best….and what about Kotak’s eTerm/Preferred Term plan……?

    I found Kotak is some what cheaper…….compare to ICICI……..n Why there is a big difference in premium for various companies……..are not they providing almost same things…….

    I have a doubt that ….Why people what additional riders….say Accidental ……. is it….people require more money, if the death occurs due to accident…?……If it is so……directly take the policy for 50 Lac SA………….
    25 Lac SA + 25 Lac Rider (Acci) = 50Lac SA…..(Why not)……….

    Please, answers my queries…..
    Thanks in advance……
    web

  54. Amit puri

    Hi Manish
    unable to understand why on line policy vs policy through agents cost is less.
    the reason usualy given is that agent is not involved, right.
    but then one time agent involvement at the start of poliy why it should cost so much, why it is not a one time extra charge?
    just to uderstand the costing model of insurance companies.
    amit

    • Prasad

      Agents get a commission of every premium amount you pay, and that is not limited to the first instance alone. I am not sure what margins they get, but assuming the commission for the agent is 10% of the premium, every time you pay a premium of Rs.10,000 towards your policy, the agent gets Rs.1000 and the insurance company gets the balance Rs.9000. That is why online policies are cheaper.

  55. Ankur

    Hi Manish,
    Nice article. I bought Aegon religare iTerm plan sometime back. It covered me sufficiently in terms of death amount(50 lac). But looking at claim settlement ratio for it, do u think I should quit and enroll for others. I am bit confused here. I am Married and 27 yrs old.

  56. Ankur

    One general query, lets say if one drink and/or smoke occasionaly…like 1-2 times per month….should he/she decalre same while purchasing life term insurance? Is it case of tobacoo or alcohol user? Any idea why do insurer asks such information while filling up application? I noticed it increases the premium. Please provide me link if it is already explained somewhere.

    • Sunil Date

      It is always necessary to answer all the questions honestly and provide all the information. Let the insurance co. decide whether the information is relevant or not. If you do not, then the purpose of insurance may be defeated totally. Your agent may advise you otherwise but remember, it is not the agent who is going to pay the claim amount and neither can he overrule the underwriter or the claim settler.

      If it true that you smoke occasionally or drink on rare social occasions the policy may not be loaded. I got a whole life policy, at an gae of 51, w/o any loading, with an option to increase the cover, if I wished, (of course to a certain extent) even after declaring the above facts.

      It is common knowledge that smoking ( and even passive smoking) is injurious to health, so is excessive drinking, therefore the probability of risk increases and that is why it is a relevant question. You may be aware that most of the insurance companies are offering preferred policies for non smokers.

  57. pravin

    Manish,
    Thanks for the info!

    Whats is the policy of insurance companies towards already disabled person? Do all companies increase the premium in such cases?

    Thanks in Advance!

    • Pravin

      There is a very high probability that a disabled person is not earning and no one is financially dependent on him/her .So there is no “Insurable Interest” in those cases . Hence they are not liable to take insurance .

      Manish

  58. Jig

    Hello Dhaval,
    i am doing copy paste of reply from KOTAK.. i havent any prob with this reply but it sounds strange so just needed your two words on this.

    “Sir currently we would not be able to provide you the medical documents as you have cancelled the policy with us .( THIS I CAN UNDERSTAND)
    Sir currently you would not be able to avail either the e- term plan or the normal term plan through us, due to the cancellation ( HOW IT SOUNDS LIKE?).”

    regards

    Jignesh

    • Dhawal Sharma

      @ Jigs – Same thing has happened to few of my clients as well so i would answer your questions in two parts..

      A) One of my client has got ELEVATED NICOTINE LEVEL and ELEVATED LIVER ENZYMES in his medical tests and the company applied loading to his premium, i.e. his premium was increased from 17,154 to 23,777..The client did not gave his consent as he thinks he was fully fit..He wanted to see his medical reports from company’s medical tests labs..So what we did was submittted a written request, duly signed by him and deposited at our Kotak Janakpuri Branch that client wants to see his medical reports..Reports were subsequently provided to him [although it took almost a month :-( ]..Now the process is that company waits for client’s consent for certain specific period and till that time, policy is considered alive, not cancelled..Till the policy is not cancelled, client can ask for the reports..But as in your case, you have cancelled the policy and so you are not in a position to ask for reports which are legally the property of Kotak..

      B) The thumb rule is that if certain policy is rejected by the company or cancelled by the client, he/she will not be allowed to apply for next 6 months..and after 6 months, that person can apply afresh and a new medical will be done and if at that time, condition of the applicant is fit, company can issue the policy..Reason i can understand behind this logic is company does not want to look STUPID in this case, that we have rejected the policy today for any x,y,z reason and just within a day or two, we are issuing the policy for same person without waiting for sufficient period of time to get that reason ratified..So its not like you can never apply for the policy from the same company forever..Its just that you have to wait for 6 months to get a new policy from the same company..

      Hope it will clear your doubts :-)

      • Jig

        Yep it sounds ok.

        There are some company offering plan without medical upto certain amount of SA. Now suppose i took one from one company of SA 20 lac without medical , and same can be get from other one? if they have plan of nonmedical and i have already one of the same kind , what will be there reaction while processing proposal?

        thanks dhaval for clarifying in details. Actually expecting the same kind of reply from the KOTAK NRI HELPDESK PERSON but surprised with their reply which i had mentioned in above comments.

        thanks once again.

        Regards

        Jig

      • Sunil

        Hi,
        I applied for ICICI prudential i-term plan for 1 cr in Dec, 2010. The proposal was postponed for 6 months after TMT findings (Medical). I applied afresh in August, 2011 (after 8 months) for 50 lacs but the policy was again postponed even without conducting the medical tests and on the basis of the previous medical reports.

        ICICI is not willing to reconsider the case for fresh medical tests in spite of the problem ratification. Please suggest how to take up the case now.

        • sunil Date

          @ sunil – Insurance is a matter of solicitation. Unlike under MRTP, where a co cannot refuse to sell their product to you, in case of Life insurance a co has the right to decline a case & that too w/o providing any reason. If ICICI is not interested in accepting your case, try with other companies. But remember you will have to mention that your case was deferd by ICICI. Pl do not hide this material fact and it is a question they will ask. There is a hindi quote “Tu nahi to aur sahi”

          • Sunil

            Thanks for the reply. :)

            That’s OK..“Tu nahi to aur sahi”..but is it required to mention that ICICI has deferred my case on medical grounds until asked for by the insurance companies in their questionnaire.

            Also, few companies offering on-line plans does not have sufficient lines (rows) to mention the details of the existing policies. What should be the best practice for us in these cases. Should we write the mail regarding the information we can;t mention over their portal.

            • sunil Date

              1 If they ask please reply honestly & correctly. So if they don’t, need not provide the deferment info; but if they have a general question like ” any other info which you think is important” the please mention it. It is in your intrest.
              2 if sufficient lines are not there, in the last line mention no space for addl info.

  59. Dr Firoz

    hi Manish, Thanks again for the excellent article..

    I am going to narrate a funny but clearly UNETHICAL incident that happened to me a few hours ago.

    i had gone to a reputed bank for investing in a Fixed Deposit. there the customer relation officer told me about a ‘new’ product offering 15% return. when i enquired they presented it as a new mutual fund like scheme with guarenteed NAV etc. these terms as well as the mention of 80c tax benefit set alarm bells ringing in my brain. i asked them whether it was an insurance plan. only then did they sheepishly acknowledge that it was ULIP. by that time around 15 mins had passed.

    so in those 15 mins they never ever uttered the terms ‘insurance’, ‘ULIP’ or like that.

    Jagoinvestor had made me ready for the trap, but i am sure many others will fall for it.

    so my question is Is it not unethical?
    and what can be done to prevent it?

    • Dr. Firoz

      Yes I would call this unethical as they are misleading people with wrong claims and not giving right information . However the solution for this is that one should make them selves aware about investments and related things ,

      Manish

  60. Sohil

    Manish i wanted to ask suppose i start a policy of say 20 lakh.ANd later say after 5 years i want to upgrade the same policy to 50 lakh is it possible?

    • Sohil

      Not always . very few policies allow that , have a look at the chart in the article. Also there are some policies which have increasing premium policies but that has to be decided at the time of taking the policy itself

      Manish

  61. Anuj

    Hi Manish,
    I am 41 aged. My financial planner asking me for go for Aviva’s LifeShieldPlus or LifeShieldAdvantage. What should I do? Which term plan is good for me that return my money with interest if I don’t die after plan completion.
    Thanks,
    Anuj

    • Anuj

      Dont get in the trap of “getting money back incase I dont die” . You get money back only because you pay more right now . So its the same thing that you buy pure term plan and invest some additional amount in some product .

      Manish

  62. Gaurav

    Hi Manish,

    I am a 25 year old, only son with no family liabilties as such apart from a education loan which in itself is covered by a term plan. I am planning to take a term insurance of around 1 crore(as per the formulae 10 times of your yearly income). I had shortlisted LIC Amulaya Jeevan but the premium for 30 years is coming out to be 27000 approx/- Now after reading your article i am a bit confused as to should I go for this or should i take two different 50lacs cover, one with LIC now and other of a private player(say Kotak) 3-4 years later when probably i will be planning to start a family? Please guide as i am starting my career and want to build my assets and hence is reluctant to pay so much premium annually.

    • Gaurav

      Yes , you should be reluctant at the moment as I assume there is not much people dependent on you financially ? For whom are you taking this term insurance, Who will be financial affected if a truck runs over you tomm ? If its no one , then no need to take any insurance at the moment , Once you are married , you can think at the same time .

      Splitting your cover in LIC + 1 pvt insurer like kotak or ICICI will be a good option

      Manish

      • Gaurav

        Thanks Manish,

        Currently, i plan to take insurance for my parents who arent dependent on me as such but being the only son, they are somewhat relying on me.

        So, as per your thinking, shall i hold my plans to take insurance or shall i split it into a smaller amount and buy later when i do have a dependent family?

        • Gaurav

          If you feel that they should get some money incase you die , then its a good reason to take insurance . So go ahead and take some , and add more later when you are married

          Manish

  63. Abhijit

    Hi Manish

    Want to share my experience with Kotak.

    Recently I had applied for kotak preferred term plan for a SA of Rs 50 Lacs for 30 yrs.(I m 34 yrs old)After the medical tests were carried out I received a letter from kotak informing that my premium will be increased due to ” elevated sugar level”.I immediately checked my sugar level and my doctor informed that its well within limits.Hence,I made repeated communications & complaint with kotak asking them the reason and their criteria for 75% increase in premium.But I did not get any answers regarding their criteria neither did they share the medical reports.
    I was really disappointed with this and hence decided not to go ahead with this policy.
    Now I wonder which is my best option for term plan
    What are your thoughts..Manish?

    • Abhijit

      I am not also not sure why this happens . Why your doctor says that there is no issues and companies doctors say that there is .

      May be Dhawal can shed some light on . Let me bring him to answer this

      Manish

      • Dhawal Sharma

        @ABHIJIT/MANISH – This process is known as LOADING..It means when company finds some medical complication or certain medical readings of the applicant above the requisite levels, company can make the counter offer, by increasing the premium..As in your case, as it was found out to be ELEVATED BLOOD SUGAR, company does want to take up the risk BUT at slightly higher rate which they made offer to you by putting LOADING in form of premium increase by 50% or whatever..

        Now coming back to what could have happened (This is all hypothetical, as far as i can make out)…You got your blood sugar level done on 10th DEC on fasting basis (empty stomach) or something like that..that day in the morning, you might have jogged to the medical center or had some sweets or pastries the night before and subsequently it showed ELEVATED BLOOD SUGAR..Now you got this communication on 28th of DEC and you went to your doctor on 2nd JAN and by that time your ELEVATED BLOOD SUGAR level has settled to the normal levels, and hence this discrepency..
        and yes, why is it that tests done by the company at their affiliated lab or by their undersigned doctor might be wrong and not by your own local doctor???

        Medical reports are basically the company’s property (MEDICO-LEGAL) document and its at the company’s discretion to share those documents with the applicant..Generally they dont share these reports with the applicant but if you hand over a written request through your agent to the concerned branch, this might materialize..I have done this for my client but this does take some time..

        • kumar

          Of course nothing could be wrong with the medical test done for Kotak by a third party. The mistake is with eating habits of the client! What else can be the reason!

          All speculation is bad. Speculation about medical conditions by a non-medical professional is rubbish.

          A simple internet search will tell you that sugar gets processed in the
          body in 4-5 hours.
          But lets not worry about that. The fault is only with ABHIJIT.
          Even speculation of any other possibility is impossible.

          75% increase in premium while being the insurers prerogative seems high. I know of a loading of 15% for Blood pressure by LIC
          for my friend.
          I have no issues with 75% but arm chair speculation is unacceptable.
          The fault could be been ABHIJIT’s. It could also be from the side of the lab assigned by Kotak or the lab ABHIJIT went.
          Common sense suggests that its best not to comment on things without data/info.

    • Sunil Date

      @ Abhijit / manish. Mr Dhawal Sharma has given a very detailed reply. I would like to add one more point. The insurance co medical underwriters not only look at the diagnosis ( medical test results) but also at the prognosis ( prediction). They look at the age / the nature of work / the physical attributes / family history etc and do the prognosis. It is one underwriters perception based on their companies set rules etc. It is not necessary that underwriter of some other co may arrive at the same conclusion. You believe in your family doctor and if he says nothing is wrong be happy and approach some other insurance company.
      In case of some Ins companies, if the policy is rejected or deferred or loaded and if you request them for the medical details and inform them the contact details of your doctor, they will explain their views to your doctor.
      Since they have paid for the medical test, you cannot insist on them to give you the medical report. You can go the same diagnostic center, pay the fees and get the reports for a fresh test.

  64. Sampath

    Hi Manish

    I am 24 years old, i was planning to take Aegon Religare earlier but looking at the Settlement ratio, i lost interest in it. Can i go for Kotak preferred Or ICICI or any other (30L)? Next year am planning to take LIC. Please advice….

    Also my mother has diabetes since 10 years, and last year my father passed away because of poor health (High alcohol usage). Do you think this will increases my premium? What kind of cautions i should take while filling up forms?

    Thanks

  65. Balaji

    Hi Manish,

    Great article. I ( 32 yrs ) have planned to take a term plan. I am diabetic and my family has history of Cancer. What will be the approximate premium for me for policy term of 28 yrs ? Which insurance should I go for?

    Regards
    Balaji

  66. bharat shah

    @sunil date
    i like your information , but not reasoning:Since they have paid for the medical test, you cannot insist on them to give you the medical report. You can go the same diagnostic center, pay the fees and get the reports for a fresh test.
    i argue, it is my body, and irrespective of whosoever paid, it is my right to know the tests’ results. further if i accept it with load, who is paying after all?i i had bitter experience from hdfc standard in 2002 0r so. when i took the term insurance , they raise my premium by 20-25% without informing me about the information about the tests , even after buying it with load. i requested them to furnish the results, so i could try to improve, but they did not reply.

    • Abhijit

      @Dhawal – I agree that there could be difference in the results bcoz the sugar levels are tested after a time gap. To exactly know the details I had requested the reports through my agent.And if it is the company policy not to share the reports then this was going to be the same report which the insurance company promised to give alongwith the policy document once policy is registered!
      @Kumar/Sunil – I am not speculating regarding medical tests conducted by the lab or my doctor .the As a customer I only wanted to know the reason for 75% increase in premium.

    • Sunil Date

      @Bharat Shah, I still maintain that no body has stopped you from going to the same diagnostic center and getting the same medical tests done after paying the fees.

      The prognosis process is proprietary information and the insurance company will not be ready to share it. They may share the same orally with your doctor.

      Insurance is a matter of solicitation; it is not covered under the MRTP act. It is their privilage to accept a proposal or reject it WITHOUT giving any reason. If you do not agree with the increased premium you are free to decline their counter offer.

      • Sunil Date

        @Bharat Shah : When the company gives a counter offer loading the premium they do inform the basic reason for the same.

      • bharat shah

        @sunil date
        thank you again for good information that it is not covered under the MRTP etc.! it is not that i had taken the insurance, though i did not want. i am only representing the insured’s views. the laws and rules are changing, sometimes on public opinions. i consider such blogs to air the views on insured/investor side. it is the facts about my case in yr.2002.

  67. Balaji

    Hi Manish,

    I ( 32 yrs old ) have planned to go for term plan ( SA – 50 lakhs ). I am diabetic and my family have history of cancer. What will be the approximate premium for policy term of 28 yrs? Which insurance should I go for ?

    Regards
    Balaji

  68. Amit

    Hi Manish,

    Thanks for the very nice article, hope people will understand the importance of the term insurance.
    Please let me know if I split the Term insurance between LIC (20%) and Private (80%). During the claim time if LIC paid the amount and private company reject for any reason. Can my family drag private company to the court on the basis of LIC payment.

    • Amit

      I dont think so . The form you have filled for two companies are different and it might happen that you gave all right info to one company , but wrong info to others because of which your premium was normal with first , but unnormal with other one . So its not the case that you can drag one company just because other company has paid (Its not about LIC vs pvt)

      its about company vs company , It might happen that pvt pays you and LIC does not pay

      Manish

  69. Raghu N

    Manish,

    Excellent read. Felt like heaven. The three types of investors mentioned in your article “3 type of Investors, which one are you?”, i fall in the first category making an effort to move to the third category. After searching for guidance for a term Policy, i’m sure i found my answer in your article. I request your views on the following thought of mine…..

    If a private insurer goes bust/bankrupt, what could be the fate of people to whom it has sold insurance?

    Regds,

    Raghu

    • Raghu

      Thanks for your comment, glad to hear that you got the final answer on my blog

      the chances for any insurance company going bust is almost nil , as our IRDA makes sure that they maintain solvency ratio which is good enough to pay off every coverholder . Also incase one goes bankrupt , it would definately be taken over by some other company ,.

      These are the thoughts well considering , but make sure that these do not stop you from taking ACTIION :)

      Manish

  70. bharat shah

    1.regarding selection of online or offline from a particular company, i think, more important point is the riders, particularly , ci and permanent disability due to accident , are not available through any online term insurance. so your choice for rider preference would be offline only.
    2. submission of same correct information to any insurance company, i was informed that the insurance compny , in my case , kotak life, would give the copy of our application alongwith the policy document on finalisation of the pocedure.

  71. Gurmeet

    Mansih

    Thanks fo this wonderful article

    However, I have question….

    I am a housewife and has no source of income and I want to take a term insurnace plan. But I guess the insurance companies looks for the source of income to calcualte the required sum insured to ensure that whether the person is over insured or not…if this is true then I can not take term plan?
    can I take term policy and my husband can pay the yeraly premium?

    What do you say?

    Gurmeet

    • Gurmeet

      there has to be a “Insurable Interest” for some one to get insured . What insurable interest does your husband have on you ? He will not be financially impacted incase you are not there tomm .. I am not sure saying that you can not get any insurance, but it might happen in worst case that company rejects to insure you !

      Also why you want to take insurance ?

      to answer your question , you can take insurance and you can pay the premium (indirectly your husband) , note that he wont get any tax exemption for this

      Manish

      • dr kishan

        dear manish
        this was avery informative article to read modifying many peoples’ concepts.
        in the above matter i wish to correct that the premium paid for insurance of spouse and children is also allowable under section 80c at present (although it may change with DTC).

        keep enlightening.
        tum andhere mein asha ki kiran ki tarah ho

        dr kishan

  72. bharat shah

    i read one mail for prefering sbi term insurance v/s kotak life for considering sbi could give rider of a/m upto sa v/s limited to 10 lacs from kotak. i like to bring to notice that ci rider is given initially for 5 yrs. in case of sbi (subsequently it could be for more period with changed premium), v/s for whole period in case of kotak life.

      • bharat shah

        @manish
        i knew from the information document from their site. it clearly indicated that the premium for ci rider would change.

        one request : can you make possible to go to bottom from top and vice versa for any page? it will save lot of time for regularly visiting members for further comments ,if any.

  73. Rohit

    Hi,

    Want to understand a situation, I am 34 years, male, 94 kgs and for the first time diagnosed with type 2 diabetes. The tests done last year were well within limits. All other test as part of executive check up are normal and well within limits including tmt test. I am a non smoker and have diabetes history from my maternal side though none of my parents are diabetic.

    What are the prospects of me getting a term policy with all 4 riders for say a SA of 50 lacs? What would be the loading that the company would be doing as compared to a similar person who is non diabetic?

    A reply would be highly appreciated.

    Rohit

    • Rohit

      I dont think it should be a big issue to get a term plan . The only thing is that your loading will be higher , may be upto 50-100% depending on the severity and the company .

      So the only way to find out is to actually apply for the company . Better go for the offline plan first and get the quote from the life insurance company

      Manish

  74. Vinu

    Private Life Insurers are there only for the past 10 years.
    Atleast 50% of the death claims they receive would definitely be “Early Claims” to the company.
    Probing into an “Early Claim” in all aspects in justified.
    Obviously when there are any hick ups in the Proposal form signed by the Client, the Life Insurer has the rights to reject the Claim

    Are we right in comparing companies based on the Claim settlement ratio??

    Do you think LIC has the same Claim settlement ratio (i.e 96.54%) to all its “Early Claims”?

    • Tarun

      @Vinu @Manish,

      What I had read somewhere is that “Early claims” are those which are made immediately after start of the policy say within/before 5 years. This obviously justifies verification irrespective of the company private/LIC.

      I think its right and worthwhile comparing based on claim settlement ratio as thats the final goal of all this exercise of getting the insurance. More so this becomes important due to the fact that new private are new into the market. Companies have to make business the more they reject the more money they make and more happy are the investors. Though IRDA does have rules and regulations there are always small ifs and else that companies can put into their policies which could help them make valid rejections. For e.g. in one of the policies I saw this ridiculous statement for accidental benefit if traveling as a fare paying passenger on plane. The flight has to be on scheduled time and route. What does it mean if flights are operating say on late schedules for some reason the claimer won’t get his claim. Thats like a good escape window to pay the claim.

      • Tarun

        Just to be clear on my point.Early claims are related to the start of the policy. By start of the policy I meant start of the individuals policy(after taking it from the company) and nothing to do with when the policy was incorporated as a product by the company for everyone.

  75. Tarun

    Hi Manish,

    Excellent forum and excellent insight from you in all the articles. Jagoinvestor is definitely helping people to increase awareness kudos to your work! I have definitely learnt a lot here in last 3-4 days.
    I am being pushed to get term plan by one of my knowns (ICICI agent) for ICICI pure Protect. I am not really motivated to take any kind of insurance as I am 32 with no liabilities/mortgage or dependents etc. However, the agent says that now you are young so u should get in now later it will be costly. Lets say if I buy after 5 years with 25years coverage vs now for 30 years I do see 17-20% difference in premium with LIC Amulya plan(which I will have to pay for rest of the term irrespective of when I start) so I am kind of convinced that I need to take now. In future liabilities are definitely going to increase and so is dependents (most probably I will get married :))

    I am also convinced that I need to split it with two companies. So right now I am looking for 50Lacs cover. I am going to take second 50L later may be after 5 years when my liabilities really increase. Also, I have narrowed down to LIC and one private(most likely ICICI). However I am in doubt which one should I take now LIC or ICICI(say iProtect) here are two line of thoughts.

    1) Take LIC now as premiums will be higher later better to get in later. Also as time passes the clam settlement numbers will be more evident for private players and perhaps we can go for it later when the need be.
    2) Since there is no liabilities/dependents now whats the point taking some high cost policy (LIC). Better just take iProtect at dirt cheap price (may be with adviser) and be happy. As the competition in market increases with time even LIC will bring down price and perhaps may be will have online term insurance later so take it then ?

    What do you think will be a good path right now?

    PS: One thing I hate about iProtect is there is no disability/critical illness fee waiver. Perhaps I should take PureProtect instead or may be Kotak which has everything but then my agent is going to be angry. Will be difficult to pacify him. :)

    Thanks again for your great insights.
    Best Wishes!!

    • Tarun

      The fact that you will pay more premium later is true but not always a bad thing , because you will NOT PAY for some initial years . So if what you save in first few years can make up for next many years . its ok .

      Imagine paying 10k for 30 yrs or waiting for 5 yrs and then paying 13k for 25 yrs , you will pay 3k extra for 25 yrs which is 75k , but you have also saved 50k in 5 yrs which makes the situation same !

      Manish

  76. Sudha

    Came across this site in my net wanderings for financial info and am so glad to have found it. Excellent articles – they have really ‘jago-ed’ me in terms of depth of info. Thanks!

    Had a query. I have a money-back guarantee term insurance plan from LIC. During the plan term, I have received some monies back as bonus. Is this money-back option better/worse/not really beneficial than the above term insurance plans? At the time I took it, LIC was the trusted one around. My plan will expire soon, so I would appreciate advice to make a choice as to renew the money-back plan or opt for something like a kotak preferred.

  77. Raj

    Hi Manish,

    I am 29 years old. I have taken one term insurance one year ago for 15 years term and 10 lacs cover from LIC. I paid this with single payment.
    Now i want to again buy one more term insurance with long duration.
    can you suggest which one i should buy.
    I want to buy companies which are 100% indian owned like LIC, SBI. I know only two. do you know any one which are 100% indian owned and less premium with good claim settlement.

    • pprajru

      i dont think that any other insurance company is 100 % Bhartiya (Indian), almost all of them are like 76 % Bhartiya, 26 % foreign including SBILife

      • Dhawal Sharma

        @Raj – Sorry to disappoint you but SBI LIFE is a joint venture between SBI and BNP PARIBAS on 76:24 basis, as like any other insurance company in the market..If you are looking for 100% Indian owned company other than LIC, you can consider RELIANCE LIFE INSURANCE..

  78. Ajay

    Hi Manish,
    nice comparison! however, one thing to keep in mind is that (based on my reading of IRDA’s report & talking to the Aegon Religare person on phone) – the claim settlement ratios are for overall policies – not broken down by type (e.g. iTerm / pure term etc); hence, difficult to judge specifically for term plans – which could be different (since premiums are low).

    Secondly, what I’m also hearing is that even if I wanted LIC term plans, apparently, LIC rejects application itself if the applicant’s medical tests show up higher cholestrol etc – in other words, instead of adjusting the risk premium a bit upwards, they simply reject it and hence can afford to show the higher settlement ratio. Am not sure how accurate this is – but I got this info from a friend who approached an LIC agent who is his friend and this is “inside info” in some sense. Have you or anybody else had such experiences with LIC (or any others like Kotak preferred)?

    • Ajay

      What you have said is exactly what I also feel and have got info from sources in last many years .. No doubt LIC claim settlement might be better than others, but its still exaggerated and “carefully prepared” and not very well understood

      Manish

    • pattu

      I got Amulya Jeevan a year back. No lipid profile was done. So they cant know whether I have cholesterol or not. I was overweight and have BP. So my premium was loaded by 15.6%

      Reject a policy is underwriters discretion. It seems like a intelligent move to me from the companies point of view. If this inside gyan is correct (I dont trust that in the first place) I surprised that LIC actually think this much ahead!

    • Basavaraj

      Ajay,

      I want to tell one general thing. If either LIC or any other private insurer rejected your proposal then they have to give valid reason for rejection. If proposer not satisfied with the reason then he may go to regulators as they can’t bias considering their profit gaining or mantaining their Claim Settlement ratio. So to me this point looks not valid. Every insurer has to work under the regulators. They cant work on their own wish.

  79. Madhukara

    Even though the comparison is good, but many of the premiums when I tried to validate are not accurate. you need to validate the premiums. Also you need to mention your age while calculating the premium.

    • Madhukara

      Yes , I used online comparision sites for the comparison and they had stale data . The data is for 30 yr old person with 25 yr of tenure . Its written in the chart downside

      Manish

  80. Pradeep

    Hi Manish,
    I wan to buy Health Insurance for my parents, both are at 60, my dad is having High Blood Pressure, Diabetes and moms health is in good condition.
    Can you please suggest best Medical insurance plan, So that they can get best possible treatment in case of emergency, covering all critical illness. Even if Premium is high, no problem. please suggest best one.

    Regards
    Pradeep

  81. ShanmugaNandan

    First of all, I would say “Thanks a ton” to the author for this article,
    i have been searching for info on term insurance, no where i could get such a comprehensive one….Thank you.

    I have a query,
    I am 30 years old applied for 1 crore term from LIC (Jeevan Amulya), premium paid & underwent medical test just yesterday and yet to get policy.
    after reading this forum, I am seriously thinking of reducing the SA to 50 or 75 lakh & go for ICICI iProtect for another 50lakh which actually charges 1/3rd the premium amount from LIC.

    what do you suggest ?

    Also anybody knows if LIC can reduce the SA and refund the difference premieum?

    also read in the forum that LIC planning to revise the premium rates, hope it will be applicable to old policy holders also.

    • ShanmugaNandan

      Thanks for your appreciation . It felt great to hear that your last search on term plans was this article .

      Regarding your policy with LIC, as you just now applied the policy and you still have to get it in your hand , you have a solution to your problem , Whenever you get the policy in your hand , from that day , you will have 15 days in your hand to return the policy and those 15 days are called “Free look up policy” . You should return the policy and only medical costs will be deducted from it and rest will be refunded to you .

      There after you can apply for ICICI or Kotak or any PVT insurer for 50 lacs and rest from LIC . Note that it might happen that you will have to apply in LIC only after 6 months of cancelling the policy .

      Overall , you will pay around 60-65% of the original premium which you would pay if you had gone only with LIC . so there will be some savings for you . Apart from that you will have flexibility of closing one term plan later incase you want to reduce your Insurance costs .

      If company revises the old rates , it does not go to old clients ,old clients have to close their policies and take new again .

      Manish

  82. Amit

    I am planning to buy 50 Lakh term insurance as ICICI prudential is less prmium but you said its settlement ratio is not as good . In ICIC premium is approx 8.5 K for my age – 33 (retrierment Age 60). I donot abt LIC premium but it will be definatly Hogh . Can you Pls tell if i atke online than there will no issue for claim settlement . so should i go ahead or not with ICICI.

      • Amit

        Dear Manish,
        Thank you very much for a very quick response.
        You mean break in to two means one in LIC 30 Lac & other in ICICI 30 Lac . Also let me know hwat do u mean all data connreclty fill . whatever its their we will fill up that column. what are the data come under that.
        Thanks & Regards,
        Amit

  83. Vats

    Manish,

    Post is Very well articulated. I would want to know one thing. What’s your view on buying Term Plan by paying a single Insurance premium than paying annually. Can you please provide some numbers related to the same? Or do you feel it will be a burden for the the person taking insurance to pay such hefty sum one shot.

    • Vats

      Not always , You can definately pay single premium if thats what you want , the only thing is why to pay so much in one go even if you have it ! . Cant you put “Single Premium” worth of money somewhere and generate “Annual-Premium” out of it ? If YES , then just pay annual premium ! . If your concern is “what if I forget paying the premium and it lapses” , then its a different thing .

      Do some maths yourself and come up with a conclusion and share with us

      Manish

      • Tarun

        Also, lets say for a 50Lacs you have to pay single premium of 5L and lets say something happens to you in 2nd/3rd year. Then essentially you got only 45Lacs back. There seem to be not much value in paying single premium. If you are worried about paying premium better put the amount one side into a savings account and setup an electronic transfer with the company. You are happy and so is the company :)

  84. ashish

    hi,
    May be a silly question to ask but do you know of someone whose claim was genuine but still was rejected, challenged before the regulator and still refuted.

  85. Arun Kumar Sharma

    Dear Manish

    Bravo !!! Well done !!!

    Thanks very much for this nice article ! Your this article has timely helped me in making my mind.

    Now, i am going for LIC Amulaya Jeevan (25 lacs) & Kotak Preffered term plan (25 lacs) with additional disability rider (10 lacs) & Critical illness (4 lacs).

    Thanks Buddy & keep posting these informative article !!!!!!!!!!!!!!!11

    I feel good that at such a young age, you advise is like a CFA.

    Thanks a lot again !!!!!!!1

      • Arun Kumar Sharma

        Yes Manish ….. I wanted to say CFP (Certified Financial Planner), not CFA …… thanks for pointing & correcting……….

        Manish, also i want to congratulate & wish you all the best in your life/career.

        Your reply to each & every query is highly appreciable. In just 2 years…. you were able to get so much of crowd.

        Keep it up buddy, i’ll be looking forward for your new articles.

  86. Sachin

    Hi Manish
    I want to take a term plan shortly and mostly I will go for LIC Amulya Jeevan through single premium option. However, what are the implications if I take up job outside years in next few years? The job overseas may be for a period of 6 to 8 years and after that I plan to return to india. Will my policy continue to be in force if I intimate LIC of the change in Job / Residence status? If the policy is to be closed, what happens to the premium paid and should I go in for single premium (in the likelihood of overseas job) or should I go for yearly premium? Any other implications?

  87. Sunil

    Following you people’s sincere advices on revealing every health information..
    http://www.jagoinvestor.com/2010/09/9-most-asked-questions-about-term-insurance.html
    I decided to reveal, my gastro related issues and my back pain problem. etc
    But when I was asked to scan my spine to diagonise my back pain problem,
    —found disc prolapse causing back pain
    –additionaly it’s found that there is a tumour in my spine which is causing nothing now, but may cause disability or unexpected thing in future.
    Should I need to reveal that too? If so, will my policy be accepted ( by LIC ) ?
    LIC having most claim settlement ratio, shall i ignore the last info? bcoz taking no term is better than this ingnoring one such info?
    plz throw some light on these…

  88. Sunil

    A small correction on my comment… 318
    LIC having most claim settlement ratio, shall i ignore the last info? bcoz ignoring one such info is better than not taking term!!
    plz throw some light on these…

  89. sunil gavaskar

    Points to consider while calculating SA .. ( Death benefit value )
    — Most of the employer has Group Term insurance – Helps much to reduce required personal Term insurance – SA
    –To include corpus as from Employee Provident Fund account while calculating the SA.. which will be one of the major contributor
    — The monthly expense will go to 40k in next 12-15yrs and corpus required for MIP should be considered carefully. ( say 60L in MIP )

  90. vijay r d

    hi manish,

    I’ll be 31 yrs in june 2011. I am married with 1 kid. My kid will be of 1yr in july 2011. Our monthly income is 43k. Planning to buy house worth 13lkhs with homeloan.

    I read all your excellent articles about investments and insurance. But, i need your guidance for planning my insurance with above information and what way i should go for it.

    Thanks&Regards,
    Vijay Doiphode

    • Vijay

      You should but the term plan . It would require some calculations , but you can always have a rough idea on how much money would be enough to take care of “everything” incase you are not around . Split it in two ..

      What specific info you need ?

      Manish

  91. nilesh

    sir,

    a good anaylisation of term plan.i have gone through your suggesstion & facts

    which has really helped me to known about private players.i think you are rather

    biased in suggesting kotak as best plan.to me how could we trust any company

    for 25 to 30 years without any track like lic,sbi which existed for past 50-60

    yrs.moreover kotak is managed by proprietorship type with no government

    intervention in case of any colaspe only irda to help it out.so according to

    a layman trust factor could be applied for long term on lic & sbi.pl kindly

    clear my misconception about it.

    thanks.

    • nilesh

      all insurance companies are governed by the same laws and rules which is insurance act and regulated by irda , i understand the trust factor with lic as its the oldeat one , but others are also doing good , the reason for suggesting kotak is that its one of the cheapest , old and in-profit companies in pvt insurance comoanies , same with sbi also

      manish

      • Dhawal Sharma

        @NILESH – Just to set the records straight, KOTAK LIFE is not even 25-30 years old as you have put it..PRIVATE PLAYERs are in the INSURANCE SECTOR since 2000 only, so all insurance companies except LIC are 11 to 12 years old at the most…

        Secondly, KOTAK LIFE has a very good track record of late..For last 3 consecutive years, its posting profits (only 3 or 4 private companies are in the profits)..Claim settlement of KOTAK LIFE is in decent range of 88% to 90%..

        KOTAK LIFE is a joint venture between KOTAK MAHINDRA GROUP and OLD MUTUAL INSURANCE which is 150 year old company (Much-much older than LIC and has proven track record over such a long period and that too in 45 countries)..

        Another point to add is that SBI LIFE is also in joint venture with BNP PARIBAS INSURANCE of FRANCE..So according to your understanding, its also a PRIVATE COMPANY and it certainly does not have a track record of 5o-60 years as you have put it…

        Just to add lastly, if your documents and information is correct in the proposal form then there is no force in the world which can deny the genuine claim, no matter from where you have taken your policy, be it LIC, KOTAK, or the newest entrent INDIA FIRST…

  92. Girish

    Hi Manish,
    Really nice write up for novice who cant read whole of irda documents.
    I m interested in buying Term plan from Kotak for 75 lacks for 30 years
    Premium comes out to 8500 something.

    My question is that my father is patient of depression
    and my mother is having high Blood pressure.

    I was having problem of nuphritus(kidney problem) when i was 5 years old and from last 12 years it is perfectly fine.

    My age is currently 23 years

    Do I need to mention all these things while filling the form.
    And is it right to take term plan at such a less age?

    Your response will be most awaited

  93. Hema

    I was looking at information on term policies and stumbled on your blog. Your blog is good with lot of information and I did like ur sense if humour in some of the comments.

    I looked at various sites of insurance companies and have sound out these facts

    1. Aegon Religare is the cheapest online insurance if you consider pure term policy with no riders for a 34 yr old, term 25yrs (maximum), annual premium is Rs.7776 for 50lakhs SA
    2. ICICI I protect option 2 is one step ahead with accident rider but a bit costlier than Aegon Religare for a 34 yr old, term 25yrs, annual premium is Rs.10423 for 50lakhs SA
    3. Kotak Preferred term plan is the next for a 34yr old, term 25 yrs annual premium is Rs.9210 with no riders.
    ICICI I protect seems to be the cheapest if you consider the additional cover on accident with a bit extra cost. Iam confused whether to take Aegon Religare or ICICI. No one has mentioned about Aegon …Iam not sure if its ok to take it or take ICICI with a bit extra cost which will give additional benefit in case of accident??

    Hema

    • Hema

      Did you check Kotek e-Preffered plan which is thier online option . I am sure it might turn out to be cheapest . You can go for ICICI .. but read others review about their customer service

      Manish

  94. chandranshu pandey

    Dear all,

    I read the blog and decided to go for ICICI i protect for 50 lakhs, paid premium on 10th Jan and policy got issued on 11th Feb. As of now on net it says ‘policy in force’ and document to reach within 15 days. Very pathetic experience for last 1 month, it was beacuse of earlier commenst that it takes 30 to 45 days I held on to it. Hospitals tied up with pru-life were third grade, the person who wanted to collect document had diffrent application no. I had to go to branch to submit documents and press for issuing letter for medical check up. Over all blog did help to get policy issued. Also after reading this blog I decided to take 50 lakhs each from ICICI and LIC. Now I will try to take polict for LIC.

    Chandranshu Pandey

  95. bharat shah

    i read a post to praise lic for providing support by funding govt. efforts for uplift the country on this blog. indeed it is. however one should also recall that there was no offering of pure term insurance in india before entry of pvt. players in the field. and so needy could not afford it, and perhaps most of who were getting insured, really did not require it! premiums came out after pvt. players’ entry is other story.

  96. Prasad

    Here’s an update to my earlier comments.. On 8th Jan 2011, I applied for the ICICI iProtect II term plan that includes accidental death benefit too. Within a couple of days, I received the email requesting me to undergo a medical check up. I was also asked to submit a few documents to the collecting agent in my city. Did both within a week’s time (by 16th Jan). On 30th Jan, I made a call to the customer care enquiring the status of my application. I was told that the medical findings were already with them, but the documents hadn’t reached them. The representative was well mannered and had the courtesy to apologize for the delay – he also mentioned that they were having problems in many places with regard to tie-ups for document collection. He also suggested me to scan the necessary documents and email it to them, and the policy would be issued promptly (medicals were all fine).
    I sent the scanned docs on 3rd Feb via email. On 9th Feb, I received a message stating that the policy had been issued. On 10th Feb, I could create a user id and password to login and manage my policy online. On 11th Feb, the policy documents were sent by Blue Dart – which I am yet to receive. Hopefully, I will get them within a couple of days time. Overall, it was a pleasant and uneventful experience. I too was apprehensive after reading the reports of bad customer service, but my apprehensions were proved wrong. I would definitely recommend ICICI iProtect.

    • Tarun

      Prasad,

      Could you tell which city you did this? My guess is metro city/Bangalore? Also, as you were considering for riders, I think this one doesnt have waiver premium/critical illness/disability cover. Accidental death benefit doesnt seem to be useful eithere since when the death occurs one is anyway entitled to get the SA. So getting extra money when death occurs specifically due to accident as such provides not much value. I would have liked instead if they had disability/critical illnes/waiver premium.

      Thinking in this manner I feel spending extra 30% premium for just this is not worth taking this option.
      http://www.iciciprulife.com/public/Life-plans/iProtect/features-iProtect.htm
      Manish/others have any view on this ??

      • Tarun

        I look at this a bit different way .. accidetal rider gives you flexibility to take extra cover at minimal cost , so take 50% of what you want to take as base cover and taken 50% more addition as accidental rider , so u end up taking proper cover for yourself .. this you will get a cheap extra premium because of rider . with very high probability some one dies by what ? I think accident only !

        Views ?

        Manish

        • Prasoon

          I’ve heard that insurance providers do their best to deny claim for accidental rider on basis of silly excuses. And sometimes, they ask for such proof which are almost impossible for hapless/helpless family members. Denying death claim is obviously difficult, but denying accidental rider amount seems very easy for them. Are my concerns baseless?

          • Prasoon

            They are not baseless , but they are incomplete .. the cases which you have heard are from families where they didnt give some right informaiton or incomplete informaiton which only the main person knew ! and not family and once the main person dies , the company comes to know about the “base less fact” or “silly excuses” which was silly or baseless for family but not from company point … and hence denying the claim is very well in thuier rights , its because they have covered a high risk person but got normal premium from him all these years ..

            I hope you will get convinced a bit from my answer if not fully ..

            Imagine your self as company and you are doing business, you insure a person and have two rates , Rs 10 per year for non smoker, but Rs 20 for a smoker .. Now i have smoked for 15 yrs and then left smoking 2 yrs back .. but as i dont smoke now , i dont mention it in policy , i hide it thinking ki “chalta hai!” .. i get Rs 10 from him for next osme years ..

            Is it risky for me to cover him than a normal perosn ? NO ! . he has been a smoker and his lungs and heart are all hallow now ! .. they are infected and he has high chances of DYING than a normal person .. then he actually dies .. autopsy is done and report says lungs gone because of smoking all these years .. I reject claim because i was underpaid and I was made to beleive that the person was healthy , thats the reason i was charging him less premium .. so I DENY .. I as a company am right and in very ethical with the customer and my business ..

            But imagine what happens to family ,did this person tell his wife or children about his “hiding” of informaiton , NO , because it was too small things to discuss .. family thinks they are secured , have no issues.. and later when their main bread winner dies , and in that rona dhona they dont get the money , out of frustration everything will look like “silly excuse” or “baseless” … Insurance is not a easy thing to understand .. big regulators are watching .. everything is audited .. the main problem is we dont look into it and try to understand how it works .

            Its a pure business .. Insurance companies will always be in profit if they pay all the genuine claims … Its we customers who have to get genuine first !

            Manish

            • Prasoon

              Thanks for detailed explanation. I completely agree with the fact that if one hides something from insurance companies, the onus of rejection is on no other than him/her. After reading your posts/comments (for 1-2 months) I have got a good idea of this complex thing.

              But, my concern is here regarding Accidental rider claim. Is there any case where company pays death claim but does not pay accidental benefit? On the grounds like person died first and accident happened later or vehicle was not registered or something other…

              One of other question, if we remove rejection cases of within two years and smoker/non-smoker cases, will percentage of rejection reduce drastically?

              • Prasoon

                hmm.. I am not sure on that .. may be we need experts opinion on that .. let me bring dhawal sharma for that .. our helper in trouble :) .

                Also , Most of the rejection cases are very new one’s as there is generally a detailed check and investigations in cases less than 2 yrs old .

                Manish

                • Dhawal Sharma

                  Thanx for the Compliments Manish..I like HELPER in TROUBLE :-)

                  As for the hypothetical situation put forward by PRASOON, hypothetical answer would be that if a person dies of HEART ATTACK/HEART FAILURE while driving the car and car collides with a TRUCK/WALL, and later on its written in DEATH REPORT that death has occured due to HEART FAILURE and not due to any accident, then company will be in its legitimate rights to deny the claim..I have not come across any of such cases in my career nor have i read something like this but few seniors told me that almost always these kind of cases are complied with by the company on the humanitarian grounds (Of course, SUM ASSURED being less and not for cases where sum assured is 50 lakhs 😉 )..

                  Thirdly, again i will emphasis that ALL INFORMATION DISCLOSED in PROPOSAL FORM, GENUINE CLAIM at the time of DEATH, DEATH within the parameters of the POLICY (Death due to TERRORIST attack and policy covering these types of claims), and all documents required are provided to the company (DEATH CERTIFICATE, ORIGINAL POLICY BOND etc) – then no matter what ratio or which company, CLAIM will be paid..

                  So lets focus on getting these things right rather than what would be the claim ratio and all..

              • james

                Don’t see the need to go to such a complicated scenario person died first and accident happened later although it is possible. Much more simple and common problems are there:

                Accident claims require proof of accident. In most case it is FIR. In hit and run cases this maybe difficult. Perhaps then claim can be delayed or rejected.

                Also if company gets evidence of recklessness driving with someone without license or unregistered vehicle or vehicle with poor brakes claim can be rejected. So FIR report can be used to reject claims!
                Consider this: Suppose a manager while on site inspection gets hit by a crane and dies. The company has to agreed to file FIR only then it can be proved it was an accident. So in this case it maybe difficult to claim rider amount.

                • Prasoon

                  Thanks James for clarification. That was my point. In many cases it may be really difficult for kins of deceased to provide accidental proof to satisfy insurance provider. While getting death claim only is relatively easy.
                  However, I may be wrong completely!

        • Tarun

          Good point to consider. But the amount of clauses they have put for accidental makes me skeptical e.g. ” Flight should be on scheduled route and on time” “Accident should be clear evident from external source etc” Also to illustrate. My cost is coming about 7666 for basic insurance,while it is 10,203 with accidental for 50Lacs. While for 1Cr the cost comes out to be 12,330. So one could as well take 12,300 to assure 1Cr.

    • Prasad

      This shows that its a case to case experience if its bad or good .. some places have bad adminstration and other places dont ,. But overall I personally would rate ICICI Protect as bad service providers as 50% or more cases I have heard had horror stories in it .

      Manish

  97. Tandon Ji

    Namaste Manish Ji,

    Thanks for doing a wonderful job with your blogs on insurance in general and term insurance in particular.

    After reading a few of your blogs and many of the readers’ comments, I must say I was stunned to realize my own lack of knowledge in this subject matter. So thanks once again!

    For a term insurance buyer, the trustworthiness of a private insurer is the biggest factor. But private insurers being private insurers can never match up to LIC on this. However, if a private insurer has been selling a particular term insurance policy for quite a while, it would give the buyer some assurance that because so-and-so policy has been around for quite some time, there must be something good about it.

    I believe it’d be a good idea to compile a list of all currently available term insurance policies chronologically, the logic being: the older the policy has been in the market, the more trustworthy it is.

    Do you think it’d be useful?

    Regards,
    Tandon Ji

  98. Another view to the whole term buying experience. A few months ago I wanted to buy a term policy and approached a number of insurance companies (called up the company and asked them to send an agent etc.). Almost all the agents who came over, gave me the top level quote for a term policy (mostly avbl at the site) and then started pushing ULIP and other policies with higher commisions. Once I stressed that I wanted a term policy, almost all of them got uninterested. So I think the only option left to actually buy a term policy may be via online, even if there is delays and bad customer services (atleast it cannot be worse than what I get from the agent route)

  99. Sampath

    After lot of research, i decided to go for Kotak Preferred Plan.
    I wrote to their Customer Service, filled the Contact us form, No one cared to call me , its been 3 weeks :(

    Now am afraid about these guys… they are not even calling people (from Metro city) who wanna take policies… Dont know what will be the situation during claims..

  100. Subhashis Das

    After reading this good topic & discussion forum, I zeroed on Kotak & went to buy a SA 1 crore term policy for myself. I went to Kotak Life Insurance’s “Chinsurah” (W.B.)Branch office to find what term policies they offer & what are the details. The branch is on 2nd floor of a shabby looking building in a busy area & it appears that customers do not visit the branch personally. The staff were clueless about term policies & seemed apathetic to customers. After referring me from one table to other finally a manager looking elderly guy appeared & told “e-preferred policy is reserved for Kotak’s own employees” & thats it! I turned out saying thanks to them. No one bothered that a potential customer is leaving the door. I wonder what kind of service the staff would be able to provide if the need arise. My total sympathy is with Kotak’s policyholders.

  101. Ankur

    Hi,

    Thanks Manish for this insightful article.

    I am 28 years old, married with no kids. My wife is currently studying and will start working in an year or so. I have a home loan of 44 lacs and hence interested in a term insurance policy.

    Reading the article and all the comments above I would go for either LIC or ICICI protect. I plan to take 50 lacs of insurance cover.

    What I want to know is: why is it generally considered better to take health policy etc to cover accidental death, permanent disability, critical illness etc. instead of going for the riders in the same insurance policy.

    Also, I am confused whether I should split my policy among two different insurance players just to split my risk in the event of claim rejection?

    Thanks!

    • Ankur

      There are different cost involved in a product , sales cost , distribution cost , operational overheads , documentation etc . IN term plan , its all there already and you just have to add in the features of those add-on products , due to which the costs come down , In stand alone policies there are all the costs seperately .
      Yes you should split the policy to diversify the risk and to get flexibuility of reducing the cover later incase you need it

      Manish

  102. VJ

    Hi Manish, I must compliment you for your wonderful blog. I have made it as a habit to check your blog before deciding on any financial product. I have a query and grateful if you could help me. I have a MET Suraksha policy from Metlife for Rs. 30 lakhs with CI rider of Rs. 5 lakhs and the policy term is 20 years. I have been paying premium of approx. Rs. 30,000 p.a. regularly for the past 4 years. But Metlife service is pathetic and I do not wish to renew it. I already have applied for Kotak preferred term plan for Rs. 60 lakhs which I am yet to receive the policy document. I wish to go for another term plan using the premium of Rs. 30k p.a in addition to Kotak preferred term plan. I have shortlisted i-Term, i-Protect and SBI Smart Shiled. Could you please help me in choosing the appropriate plan? My age is 48. Thanks in advance.

    • VJ

      30k premium for 30 lacs cover is too much for your age , because you have taken it 4 yrs back the rates are the older one and very high . As you want to go with Kotak , I would suggest going for Kotak e-preferred instead of kotak preferred , as its a online term plan and will be a cheaper one . Note that you should split your insurnace in LIC + kotak-epreffered .

      See how much is the premium for 30 lacs in LIC + 30 lacs in Kotak e-preffered . I think it will not cross 30k . Also be patient with online term plan , they are more slower than ofline plans , which city are you in ?

      Manish

      • VJ

        Hi Manish, Thank you very much. I think I have not conveyed the information properly. I will try to bring in more clarity on the Kotak insurance policy. I have already paid my first premium for Kotak Preferred plan for Rs. 60 lakhs and underwent the required medical tests too. I am told by Kotak that I would be getting the policy document anytime now. I wish to take an additional policy in lieu of MET Suraksha for which I am paying Rs. 30,000 p.a currently. As you have rightly pointed out that the premium rate is very high for Metlife policy, I wish to opt for a term policy from some other insurance company other than Kotak (as I have a policy with them already). I wish to use the Rs. 30k that I am paying currently to Metlife and take this additional policy. Shortlisted ones are i-Term, i-Protect and SBI Smart Shiled. I have checked the LIC policy and the SI would be around Rs.30 lakhs only for an annual premium of Rs.30,000. Will LIC be better than ICICI, Religare Aegon or SBI? I have no concerns about going with private insurers. I live in Bangalore. Regards, VJ

        • VJ

          You have taken the offline version of term plan from Kotak . Now you can go with an online version of term plan . So better go with ICICI Protect or Metlife . I would have suggested LIC , but its premium is very high and you are ready to go with pvt insurers anyways :)

          Check if your total cover can be near 1 crore only , Is that enough for your dependents considering EVERYTHING

          Manish

  103. ShanmugaNandan

    I had applied for LIC’s Amulya Jeevan for 1 Crore term plan….initial estimate was Rs. 31800/- after medical checkup and one month ,now they are quoting
    Rs. 49,166/- !!!!!! .
    I am seriously disappointed.
    I am non-smoker, non-drinker, normal bp and no history of diabetics in family. Age 29 married…only problem is with my weight which is 95kgs…however i wont look like one as my bone weight is always high.
    I am seriously thinking of cancelling it…and going for others…wht do you suggest… ???
    ICICI iprotect initial quote is 11k + additions may get to 20k max….but 49k is faaar higher….

    • Shanmuganandan

      You dont need to be disappointed , its a pure business act . LIC rates are higher than others as their mortality rates are older , they are not revised .

      There are two suggestions I can give to you .

      1) Why dont you forget about term plan for a while and seriously work on reducing your weight , you might be thinking about it from long and beleive me it will never happen if there is no motivation , you need to be more committed , not just interested in reducing weight . Make a project , take 6-9 months, reduce it to decent levels . And then apply for the term plan . YOu will be happy for two reasons :) [RECOMMENDED]

      2) TAKE 25 lacs from LIC and rest from ICICI .

      Manish

      • ShanmugaNandan

        Thanks Manish,
        I would also like to discuss one important thing.
        LIC officer told me the that premium for term policy has two components
        1) estimate (what you see in premium calculator online)
        2) loading (on the basis of medical tests).
        Loading is categorized to type I, II, III, IV based on medical conditions. Type-I is least and Type-IV is highest.
        Type-I is 55% of the estimate premium and I have been charged the least loading he says…

        I am wondering if that is the actual way..its Cheating !!!
        when you have no problem at all why should they add 55% extra premium as loading ??? why cant they say it in estimate only?

        Is this how it works with other insurance agency only?

        • Sunil Date

          @ShanmugaNandan You have admitted that you are overweight. What is your body mass index (BMI) ( Weight in Kg/Height in meter Squared) ? If it is > 30 then it is a case for concern. As Manish has suggested consult your co doctor on this issue.

          Each Insurance company has its underwriting norms. They not only study your current health status / your working & personal life style / Family history etc (i.e diagnosis) but also do a prognosis. If in their opinion it is a sub standard case they load the premium ( i.e consider the proposer to be of a higher age) so that it is not unfair to the other standard policy holders. It is not necessary that each medical underwriter would arrive at the same conclusion ( prognosis based ).

          You must have accepted the addl premium demand before the policy was issued. We cab fairly assume that it is not in all cases that addl demand is made.

        • Shanmuganandan

          The procedure looks right , its very right way . Imagine you are insurance providor , how will you decide the premium before hand ? Unless you do proper checkup , what if the person have heart blockages and he does not know him self , so after the medical exam only you have to see how severe the person is and how much loading can be applied,

          In you case you are saying that you are healthy and nothing is there, then ask them what is the reason for loading?

          Manish

  104. Dev

    Manish,

    I have gone through this post of term insurance and first would like to thank you for such a wonderful post. This has been an eye opener as I was not knowing any details, necessities and benefits of term insurance. Thanks to many knowledgeable fellow posters also who have asked good questions and also provided answers.

    I an in the process of identifying two term insurance policies from 2 players for 50 Lakh each. After hearing from you, Dhawal Sharma and others I have decided to go with private insurers and stay away from LIC due to their high premiums :-). At least it appears that no claim can be rejected if all the facts are provided correctly and genuinely I don’t have any intention of cheating insurer as well. Also, hope policy portability moves by IRDA will become easier and easier as time passes..

    By looking in to comments from fellow posters, I have all most finalized on Kotak e Preferred and ICICI i protect plans for 30 years. But AVIVA and Metlife are providing policy till the age of 70 which would come to 34 years in my case. It seems there is not much discussion on this point of having policy more than 30 years in this post.

    Given the fact that customer service seems to be average or below average in most cases/companies, I feel that its better to go with company which can provide cover for a longer period. I have calculated the premiums and its not significantly higher for policy of 34 years. I am fine paying a little higher premium for longer coverage. I will always have the option to stop paying the premium at a later date if I want to.

    Whats your thoughts on this ? Do you suggest to go with AVIVA/Metlife for 34 years or KOTAK/ICICI for 30 years.

    I will post my experiences once I complete the exercise of buying. I am in the process of contacting the insurers and this post has already helped me a lot to look for right information and ask right questions to agents.

    Thanks !!

    • Dev

      Thanks for your comment , You can get your self insured upto 34 yrs from AVIVA or Metlife , thats fine .

      Just make sure you trust the company you are going with and also you are right tht you will be able to stop the premiums whenever you want :)

      Keep posting your experience :)

      Manish

  105. Hema

    Hi Manish,
    We finally bought kotak e-preffered term plan SA 50 lakhs for my husband age 34 non smoker, non drinker and general health good. It was very easy to buy we filled the application and made payment on 4th Feb, was called for medicals on 9th. 19th the insurance was issued and on 23rd feb recieved the insurance document. It was fast and easy.
    We need to take one more term policy ..will keep checking to see what others experience is and then decide on one..
    Regards,
    Hema

  106. vijay

    Feeling bad after reading article. Purchased Aegon religare 50 lakh for 25yrs on recommendations from apna insurance. Medical checkup over, still to receive policy. i understand that claim ratio of aegon religare is very bad, what should i do?

    • Vijay

      Dont get too disappointed , If the data you have given is all correct . You should not worry much

      However incase you want to discontinue , you can surrender the policy as soon as you get it in your hands , make sure you do it within 15 days

      manish

      • Sunil Date

        @ Vijay. LIC has a 50+ years history. Compared to the policies sold the rejected claims will come down for the new entrants. Other companies are relatively new so the claims rejected ratio may look adverse. The rejected claims % will not increase in proportion to the increase in number of policies sold.

        If i see only the absolute number of claims rejected, the no for LIC is huge. But in statistics many a times, one can twist the logic to suit ones expected answer. As Manish has mentioned, if one has provided all the data correctly and honestly to the insurance co, then there is no way a claim can be rejected.

  107. harsh yadav

    I think i would go with a mix of LIC and SBI life, trust of government support, and a decent record and premium of both the companies.
    Your views Manish ??

    • Harsh

      Note that only LIC and Reliance are pure Indian companies , Rest all the companies have some joint venture with foriegn partners , but i dont think it should be huge concerns .

      Go for LIC + SBI , looks good

      manish

  108. Sahil Bhatia (v-2sahb)

    Hello Manish,

    I am a regular visitor to your blog and find your articles very very informative.
    Although I am working on your advice (from your blog) slowly and gradually, but I would like to tell you that you have totally convinced me about taking Term insurance and investing in MF through SIP’s. I would also like to thank the readers of this blog for their valuable comments.
    Regarding the term insurance, I went through this article and I have contacted Kotak to get a term plan for Rs. 30 Lakh + Critical Illness Rider (5 Lakh) + Permanent Disability Rider (9 Lakh) coming out to be around Rs. 6100 for my age 24. But I am expecting the amt to go higher since High Blood Pressure + Heart disease + Diabetics, run in my family. I will definitely fill the form myself and give the correct information so the claim cannot be rejected.

    Let’s see how this goes !

    JagoInvester Admirer
    Sahil Bhatia (v-2sahb)

  109. Amit Kumar Saini

    Hi Manish,

    Please let me know if come across this from ICICI. I tried to buy iProtect from the ICICI web site, My name is Amit Kumar Saini on all legal documents, while filling my details they have First Name and Last Name, so I can only enter Amit Saini. Please let me know if it be a problem in future, or it can be changed on the policy.

    Thanks
    Amit

  110. Prasad

    HI Manish,

    Thanks for such a beautiful article. I have been “Sols” Jeevan Anand policy by an agent. After Paying one premuim (5000) I realised it’s not worth it hence and did not want to continue. When I approached LIC, they said I have to pay for 3 years to surrender. However, I decided to not pay any more premuim, taking 5K as sunk cost and let the policy lapse.

    Now, I want to purchase a term plan. Given, the high claim ratio of LIC, I want to go for it. But do you think my earlier policy to be a deterrant in case of any claim settlement in future as a breach of trust etc.?

    If yes, can you suggest me a pure term policy that can be good.

    Regards,
    Prasad

  111. Guru

    Hi Manish ,

    Could you please let know the details of ” a) SBI insurance agent b) Kotak insurance agent Contact details if you know some good agent in BANGALORE ?

    Thanks
    Guru

  112. vinod pal

    Manish & all,

    I need your openion!

    I am having Amulya Jeeven of 25lac for 35 years and took it in 2008. I submitted wrong ducument (illegal) is that i am a graduate person, which i am not.
    in future,
    1. Will it be a rejected at time of death claim? or
    2. Should i close this policy and take a new one from other providers?
    3. Should i stick with the same?
    3. i want to take more cover 50L, high premium not a problem i can pay it for my 100% trust on LIC. coz i want 100% safety for my family.

    your comment and suggestion are greatly appriciated.

    Thanks in advance

    • Vinod

      while there is no example i have seen that giving wrong educational qualification is an issue, the question is why did you did it in the first hand ?

      This can become the basis of rejection as there is an element of breach of trust here .

      Manish

      • vinod kumar

        Thanks for your reply,

        i given that because i thought my 12th.. will not be good enough for taking of sum assured 25 lac for Amulaya jeeven.

        now should i stick with that or i take a new policy?

        plz suggest wht should i do.

  113. RAJIV SAXENA

    hi manish,

    i am abount to take a term plan from kotak. how should i disclose the following in proposal form.
    1. details about mother. she died in 1984 suddendly while cooking. cause is death is unknown.
    2. details about father. he died in 1989 due to ulcer disease.
    if i mention “NATURAL DEATH” for parents, will it be sufficent? or it will be wrong information submitted in proposal form?

    • Rajiv Saxena

      Is there any option given in the form or is it blank where you can fill in anything ? If its blank , then just fill in what happened . For mother , you can fiill in natural and for father ulcer disease .

      Manish

  114. Rahul

    Hello I am 28 yr old, Single, leaving with my parents.
    Father will be retired in next 2-3 Years.
    Parents having their own home in aurangabad and I am working in Pune and planning to take flat in next year with home Loan of 20-25Lac(at this time Home loan will get covered by another insurance?)
    My annual income is 4.5L and I am going to marry next year.
    Now Question is:
    I would like to take Term Plan.
    I search term plan in market and from your site I decided to take Kotak Preferred Term Plan for Premium of 30L for 30 yr with accident death benefit rider 7, 50,000 and Permanent disability 7, 50,000.
    From my overall planning Can this Plan is ok? Or shall I need to take more cover?
    Is LIC is better option than Kotak for me?

    Please Guide..
    Regards,
    Rahul

    • Rahul

      30 lacs looks ok for now , Considering your parents are partially dependent . Once you are married , you might want to reconsider additional term plan ., Incase you dont have any financial dependents right now , you can ignore insurance at the moment .

      Manish

  115. Krishanu De

    Manish,

    I have a typical scenario. I am willing to take up a term insurance with cover of 50 Lacs currently but I might have to move outside India in couple of years and eventually apply for citizenship there. Will I be still covered?

    Regards,
    Krishanu.

    • Krishanu

      once your citizenship is with other country, it would become a little differnet , you can then inform the company . Anyways its a yearly contract , you will atleast be covered till you move to different country permanently !

      manish

  116. Mani

    Hi,

    Thanks for an excellent article.
    I have decided to take LIC’s Amulya Jeevan plan for 25L and just wondering will it make any difference in claim settlement between the policy taken in a metropolitan city or in a small town.
    Please Advise
    Thanks,
    Mani

  117. dr kishan

    DEAR MR DHAWAL SHARMA / MANISH
    i wanted to clarify some things.
    1) whom should we make nominees in term plans? what is your suggestion? is it spouse or is it minor children with equal percentage share and spouse as appointee. will making the spouse as appointee lead to any problem during claim settlement if the children are still minor at the time of death of life assured, or will the money be handed over to the appointee easily.
    2) imagine a case where the spouse is made the nominee and not the children. now the spouse dies first and then the life assured dies, then will the money be handed over to the children automatically, if the life assured person does not update the insurance company about nominee change.
    3) can we change nominees after the policy is issued. if yes what is the procedure?
    4) if the whole family dies in an accident then who gets the money? how does the company decide who gets the money?

    you may feel that my questions are paranoid. sorry for that
    but i wanted to clarify all scenarios possible which i could think of.
    i have already taken two policies of 50 lacs each from LIC and AEGON religare, thanks to you manish. i am in the process of taking my third 50 lac policy which is from KOTAK (preferred term plan)

    awaiting your answers

    dr kishan

  118. Ilesh

    I have taken term plan from Birla Sun Life one year back of Rs. 50,00,000 for 30 year term. At that time I have not revealed that my father’s death was due to cancer. He died at the age of 60 years and 4 months. I have undergone ECG and Urine and Blood Examinations.
    What is the consequence of hiding such information in future in case of my death?
    Can you give advice regarding same

  119. Rahul

    I (Male, 33 Years) am seeking quotes of 1,00,00,000 for 25 year term My mother died of cancer when she was in her late 60s. I have no medical problem. Every time I fill up the form I have been asking about anyone in immediate family member died of cancer before 60. What should I do? I should reveal the information? What will happen? and what will happen if i hide such information.
    Thanking you

    • Rahul

      If you dont disclose it , your claim can be rejected . If you tell this information , then a small loading can happen (increase in premium) , but that would be better for good

      Manish

  120. raju

    Hi Manish,

    I am considering to take online term policy either from ICICI
    Pru iProtect or Kotak e Preferred Term Plan.
    Which is better Insurance house in terms of customer care and claims settlement ratio and any other factors?

    Regards,
    Raju

  121. sravi

    hi Manish,
    Great job done with this very useful blog . Keep it up:)
    Please suggest me which is the best among the below term policies as my husband , age 28 is planning to take 50L coverage term insurance.
    1) ICICI Pru iProtect for 25 yrs.
    2) Kotak e prefeered term
    From your blog i have seen that many customers faced issues with ICICI custome service. Please suggest me the good one.
    Please note that my husband took one ULIP policy from Kotak 2 years back and it was terminated due to policy is not revived within revival period.
    My question is :
    1. Incase, he takes the term insurance from kotak , Will it be the problem at the time of claim settlement.
    do you suggest us to go with Kotak term plan as other ulip policy is terminated by them.
    Thanks in advance.
    cheers,
    sravi

    • Dhawal Sharma

      @SRAVI – Respected Maam, first thing i would like to add is which term plan is better depends upon an individual’s perception..There is no one single TERM PLAN which is THE BEST, suitable to everybody on every single criteria (Low Premium – High claim settlement ratio – trust – professionalis and customer care – after sales service etc)..If there would have been one single TERM PLAN which fulfills all the above criteria, then everybody would have purchased that plan and this discussion would not have been going on and on..So just check out on your own from KOTAK E-PREFFERED and ICICI IPROTECT whatever criteria are you looking for and whichever suits your needs best, just go for that..

      Second Scenario which you have mentioned is that your husband’s ULIP policy has not been revived within the revival period..If someone dont pay his/her premium at due time, company consider those policies as LAPSED and give them 2 to 3 years to re-activate or REVIVE those policies by paying the outstanding amount with some charges..In your case, you did’nt revive your policy so its your mistake and not that KOTAK has terminated your policy..

      by the way, there will be no effect on your purchase of new plan from kotak regarding lapsation of your last plan..If at all there would be any repercussion, it would be that KOTAK wont issue you new policy at all…So there would be no point of your claim being rejected in the future..

      Dhawal Sharma
      URJA WEALTH CREATORS

      • sravi

        Thanks Dhawal for the reply. I have a small question regarding claim settlement.
        1. Suppose, husband is the policy holder and wife is the nominee for that, in case anything happens to both of them, is there any chance to get the claim settlement for the children.
        If not, Do you suggest to select nominee as children or wife, which is good.

        2. If Children is chosen as nominee as she is minor selected another appointee. Incase anything happens to appointee is children need to wait till they are 18 major to get claim settlement.

        Thanks,
        sravi

        • Dhawal Sharma

          @SRAVI – Respected Maam, first part of your question is from very unfortunate case where husband and wife (Policyholder and the nominee) both died in a same accident, claim can be made by their CHILDREN or children’s LEGEL REPRESENTATIVE by forwarding their case as legal hairs of the deceased..Yes, there is full chance of claim settlement in favor of the kids but it would not be as smooth and include many legal formalities as well as an honest relative/person who could look after the interests of the kids..But i still would suggest WIFE as nominee because even if child is the nominee, WIFE would automatically be in the picture as APPOINTEE..

          2. Second part is not that difficult..If appointee is no more there, policyholder can assign somebody else as appointee of the kids and this appointee can be changed.Policyholder, in case of death of the appointee (Who may be his wife), can make children’s GRANDFATHER/GRANDMOTHER/CHACHA/MAMA as the new appointee of the kids in the policy..

          Dhawal Sharma
          URJA WEALTH CREATORS

  122. Rahul

    I want to buy online metlife term insurance. They only give term insurance to person who retire by the age 60. I m state govt employee and for us retirement age is 62. Is there anything related to retirement age in metlife or any other company

  123. Guru

    Dear Dhaval / Manish,

    I have taken Kotak prefered term plan . Agent 1 ( manager is the designation in business card ) came to me and did all processing and i got my policy. While verifying the policy doc i am surprised to see that ” some other agaent name is mentioned in final policy document” .

    When i asked Agent 1 why his name is not there in polic doc ? then he replied that the other agent is his team member and just to encourage the team members he has given his business part to his team member and i dont have worry about it. But i have not met this new agent.

    Is it a problem tomorrow ?

    In final policy document , last pages Kotak puts the xerox of applicaiton from filled in during submission. There i can see that ” Checked by “Agent 1 whom i met and did every thing for me and under Broker/agent coulmn i see this new person name”.

    Please let me know if it is a problem or nothing to worry.

    Thanks
    Guru

    • Dhawal Sharma

      @GURU – Great that you have finalized on TERM PLAN, the REAL INSURANCE..

      Now let me tell you how the INSURANCE COMPANY in the AGENCY MODE works..(I am explaining this with authority because I myself had worked in two insurance companies before taking up the AGENT role full-time)..The SALES MANAGER of any INSURANCE COMPANY is not entitled to sell insurance because only an AUTHORIZED AGENT (The one who has qualified by passing the IRDA exam) can sell insurance products..In the AGENCY MODEL, a sales manager is required to build his team of AGENTs/ADVISORs and even if he himself picks the case, be it from friend-relative-client, that case has to be logged in through some agent code who can be a member of his AGENT/ADVISOR team..So if that SALES MANAGER says that he has picked the case from you and given it to somebody from his team, that is fine BUT..

      ..Yes, the problem part is that because this sales manager is on the pay-roll of the company and he is not an AGENT of that particular company, he will be shifting his job from KOTAK to ICICI or HDFC or SBI for sure within the next 6 to 7 months..For every service part related to your policy like change of address, change of nominee, or GOD forbids, at the time of claim, it will be only AGENT who will be standing by you and not the sales manager..

      So first step on your end should be to meet this AGENT 2 immediately, check out his credentials (Is he a full-time or just part time, time passing guy, how many clients he is handling etc-etc)..On first meeting, you will come to know about the AGENTs sincerity/knowledge/commitment level..If this AGENT appears genuine and professional, then nothing to worry about in your case..

      But if this AGENT2 is a part-timer guy, with knowledge limited to only commission part 😉 and on top of that, he is new to industry; then there should be some apprehensions on your part..(But no need to worry because even if the SALES MANAGER/AGENT are not serving you, you can directly approach the company’s branch and get all the things done, nothing to worry)..

      But in any case, you should give a strong reply to that SALES MANAGER that this is as good as cheating or what we call DHOKA..

      My humble advice to everybody on this blog is PLEASE CHECK THE PHOTOCOPY OF THE LICENSE OF THE AGENT WHO IS VISITING YOU, BE IT FROM LIC/KOTAK/ICICI/SBI or WHATEVER..Beacuse only AGENTs are authorised to sell insurance products and nobody else..

      Dhawal Sharma
      URJA WEALTH CREATORS

  124. Vivek

    Dear Manish,

    While researching online about term ins., i stumbled upon your article and found almost everything i was looking for and many new info also.

    thanks and many congratulations

    as a query, even though many people in this blog are forming a positive opinion about kotak, i had zeroed in upon kotak insurance even before reading this article for my term plan, as i could set aside Rs. 7200 as annual term prem. in my budget, and i wanted a 25lac+ policy with 25+ year exposure + illness riders and kotak fit the bill out of lic, icici pru, sbi life, reliance, hdfc standard, and kotak, which i selected overall as first choice.

    my concern is about loading charges. i am a 35 year, healthy, no prev. illness, nonsmoker guy, married and with 1 daughter. Will the actual premium be different than what is shown online. I am about to go for it. Any other important pointers?

    feedback would be very much appreciated.

    thanks in anticipation.

    vivek

    • Vivek

      Note that the actual premium will not be different than online shown if you are a healthy person , but if in medical you have any issue , then they can load the premium .

      Manish

  125. Subhashish Das

    Hi, Manish

    Your articles are always an eye opener for me and written in such a way that even a layman can comprehend easily complex matters such as finance/insurance peretaining to his needs.

    Today I came across an info regarding Aviva Life Shield Term Assurance where I questioned why compared to others the premium was a bit high. It was reasoned that if you survive expiry of the term the premiums paid for the whole tenure will be refunded (but without interest); so to factor this the consequent high premium (not sure how).
    This I believe might be a ploy to play with the general psychology of getting back your investment in case nothing happens.

    Best Regards
    Subhashish

    • Subhashish

      Yes , those are called “Return of premium term plans” where they take extra premium from you , invest it in some thing secure which can generate amount equal to your total premium and they pay you back that whole amount . Nothing special about it

      Manish

  126. ABHIJEET

    DEAR MANISH/DHAVAL

    Gr8 Job,Hell lot of information,
    Now only thing I w’d like to know that,I heard that somewhere(from some agents) that the LIC either accepts & pays ur amout or rejects it straight a way.
    But private insurers sometimes do some bargaining on case to case basis for payment.
    HOW MUCH TRUTH IS THERE IN THIS?
    & If that is the case this ratio stated above will be completely false,
    can we have the claim settlement data in terms of amount(i.e. TOTAL AMOUNT CLAIMED vs. TOTAL AMOUNT DISBURSED) instead of no. of claims

  127. kavita k

    hi manish,

    i have 1 query regarding term insurance. my husband is 49 years old and we have not taken a term insurance as nobody had suggested it earlier. but we have our LIC policies., so can he take a term insurance policy at this age because it will be till 60 years and the premium will be too high? pl suggest what to do as the agent is now telling us to take the same.

    • Kavita

      You can take the term insurance , but as you said the premium will be very high now . But still now its your choice to take the risk of now having the safety net or having it and paying the high premium

      Manish

  128. kavita k

    hi Manish,

    i have 1 query regarding Term Insurance. My husband is 49 years old and we do not have a term insurance, as no one suggested it before. Now the agent is pesterering us to take the term insurance. What do u suggest?

    kavita

  129. ABHIJEET

    Dear Manish/Dhaval
    Gr8 post & hell lot of information, Anyway I want to know that the claim settlement ratio specified in chart is on the basis of no. of claims.
    But I came to know thro’ somebody (INSURANCE AGENT) that LIC is either accepting a claims & pays completely to the nominee of the insured person or rejecting completely. But the private insurers use to reject the claim & then negotiate & pay the amount which is much lesser than the sum assured (may be something like 10 lacs against 25 lacs sum assured)
    SO I wanna know how much of truth in this?
    Did u heard of such practices before?
    & Is there any authorised information available anywhere which depicts the claim settlement in terms of amount(i.e. The total amount disbursed against the amount claimed for insurance)by all the insurance cos.(PSU’s & Private cos.)

    • Abhijit

      Where did you see that info that pvt insurance pays much lesser after negotiation , It might be a case with court and it might be something related to “settlement” . Can you give some source data

      Manish

      • Abhijeet

        Dear Manish
        I do not have any data regarding,But just a say by an agent,
        That why asked u about the truth but as u r saying
        “It might be a case with court and it might be something related to “settlement” One can say that it might be in apractice to some extent.
        That is why I am interested to know that if anybody on this forum had the data for claim settlement in terms of amount payed against claim

  130. ravi

    I had a good time reading your article on Term insurance. Post analysis and reading this article I had zeroed in two plans Kotal eternal term plan and SBI smart sheld. My analysiss led me to the opinion that kotal eternal term plan for 25 yrs would suit me the best. This is because i am covered even after the premium payment period is over till i am 99 yrs old.

    I also found SBI smart shield to be a promising plan but was not able to decide because i am not sure if the insurance cover is valid even after the premium payment period is over.

    Considering my age of 31 i am planning for SA 1 crore term insurance.

    So please advise which plan do i opt?

    I also had a thought if i take 50 lacs in kotal eternal premium plan and 50 lacs in sbi smart sheild but will this be a good option. I am also considering to include riders for critical illness and accidental benefit.

  131. Ravikrishna

    Hi Manish,
    Looking for your inputs/suggestion for my below comments. Please do guide.

    I had a good time reading your article on Term insurance. Post analysis and reading this article I had zeroed in two plans Kotal eternal term plan and SBI smart sheld. My analysiss led me to the opinion that kotal eternal term plan for 25 yrs would suit me the best. This is because i am covered even after the premium payment period is over till i am 99 yrs old.

    I also found SBI smart shield to be a promising plan but was not able to decide because i am not sure if the insurance cover is valid even after the premium payment period is over.

    Considering my age of 31 i am planning for SA 1 crore term insurance.

    So please advise which plan do i opt?

    I also had a thought if i take 50 lacs in kotal eternal premium plan and 50 lacs in sbi smart sheild but will this be a good option. I am also considering to include riders for critical illness and accidental benefit.

  132. Deepak

    Hi,

    I am looking for a Term Plan from Kotak. I have the following queries i.e
    a) Can i add the different riders to Kotak Preferred Term Plan/Kotak ePreferred Term Plan much later after initially buying a policy. For ex I buy a Term plan without riders and five years down the line, i want to add riders to the same policy.

    b) Incase it is possible to add the riders later on, who will bear the cost of the Medical Checkup.

    c)What is the claim settlement ratio for Pure Term Plans for Kotak Life.

    d) Till what age is the riders applicable. Is it till 65 only.

    Regards
    Deepak

    • Deepak

      a) Its tough , I had a policy with SBI, but i was not able to add the riders later . So I assume it wont be possible with Kotak also .

      c) This kind of seperate data is not published . You will be able to find only total claim ratio . I know this is weird !

      d) depends from company to company .

  133. Sandeep

    Hello,

    Requirement: Buy term plan for myself and wife. Both are 26 years old, non-smoker and wish to have sum assured of 50-60 lakhs. Please suggest a suitable plan
    a) I will give more preference to claim settlement ratio if compared to cost
    b) Prefer to have Accidental Rider as I stay in metro city
    c) Prefer policy term for 30 years

    I have checked term plan’s on net, gone throw you article cum read many comments and wana choose:
    a) Male – ICICI i-Protect with Accident rider for 30 lakhs/30 yrs costing rs 5190 and LIC Amulya Jevan for 25 lakhs/30 yrs costing rs 6825. Total 12K per year.
    b) Female – ICICI i-Protect with Accident rider for 30 lakhs/30 yrs costing rs 5250 and LIC Amulya Jevan for 25 lakhs/30 yrs costing rs 7150. Total 12K per year.

    Please provide your valuable feebback.
    Many thanks in advance for your time and sharing your knowlege.
    Regards

      • Sandeep Kumar

        Many thanks Manish for your reply.
        Did you mean
        Kotak e-Preferred plan ->  Male- 30 lakh/30 yrs – rs 4000 and Female- 30 lakh/30 yrs – rs 3404?
        If yes, can you please advise why you have suggested same (Are you scaling on claim settlement? or any thing else?)?

        I undertand,
        -> Kotak don’t have any rider but have a good feature that will increase your insurance amount (As mentioned in your article)
        -> ICICI i-protect without rider cost less (3600 as compared to kotak e-Preferred)!!

        • Sandeep

          Some of the ocmpanies like ICICI , AR and kotak are offering thier plans online , Kotak has all 4 riders and people have experienced a little better service than ICICI

          Kotak has all the iriders, its LIC which does not have it
          Yes without riders it costs less

          • Sandeep Kumar

            Hi Manish,

            Thanks for your comment and while I was to buy policy I got one more question/suggestion, which is related to term of plan:
            As I am buying policy on line then I may go with “Met Life’s Met Protect” as it has 35 years of term (In your article’s on JAGOINVESTOR, you have not talked much about metlife. Any specific reason for it? How you rate this in term of claim settlement? FYI – If you wana buy metlife met protect then you can buy only online i.e. there is no customer support as compared to ICICI iprotect, Ageon e-term, Kotak e-prefred).
            As my current age is 26 and if buying policy with 30 years term then I may go policy less at age of 55. In this case I may have 2 choices:
            a) But new plan at 55 which will should be too costly at that time
            b) Again buy new/fresh plan at age of 30-35

            Can I request you again to share your knowledge?

              • Sandeep

                Hi Manish

                I want to share my BAD EXPERIENCE WITH KOTAK, which I got while I was trying to get information about kotak e-preferred plan.

                For kotak e-preferred plan – step-up option, I had following queires:
                a) On 1st, 3rd, 5th policy anniversary, how premium will be calculated i.e. will factors like smoking, health condition, re-medical check-ups, economy inflation etc be considered? Or only 3% of basic premium be increased on 1st, 3rd ,5th year and birth of child?
                b) Is there any expiry of step-up option. By expiry means that will after 45 yrs of age will sum assured will be increased premium due to step-up option or original premium of 25 lakhs?

                Same information I had contacted with kotak customer care via mail and phone, but did not get replied since 2 weeks. Most horrible experience was with customer contact number 1800-209-8800, where I had waited for almost 1.30 hrs, but even after that also I was not connected to customer care!!

                If this is before product sale condition, then what should be after product sale?