Why you should take more than 50 lacs of term insurance

POSTED BY Jagoinvestor ON March 22, 2012 COMMENTS (269)

Are you planning to buy a term insurance for less than 50 lacs of sum assured? I would suggest better take it for more than 50 lacs sum assured and there are two main reasons for it- which I will share with you in a moment. A lot of people who want to split their life insurance cover into 2 policies, split it in such a way that the sum assured of both the companies are below 50 lacs.

For example– If you want to take a cover of 80 lacs, you might want to take 40 lacs from first company and another 40 lacs from some private company, or any similar combination. But did you know that the premium you would be paying can get you much more sum assured than you had imagined. It might be the case that you can take 60 lacs life cover from each company you were planning and still pay the same premium. So now lets see in detail those 2 reasons why you should be taking a sum assured of more than 50 lacs from a particular company term insurance plan.

Reason 1: Discounted Premiums For 50+ lacs Sum Assured

Have you ever noticed how the premiums for online term plan keeps on increasing till you move upto 50 lacs, but the moment you reach 50 lacs and move beyond, the premium suddenly reduces? Now you must be thinking, what logic on this earth makes premium for 60 lacs policy lesser than the premium for 40 lacs? See an example for recently launched Bharti AXA eProtect online Term insurance plan. The premium changes when you change the sum assured from 40 lacs to 60 lacs for 30 yr old make with 30 yrs tenure.

Term Insurance premium for more than 50 lacs

Why the premium reduces when the sum assured increases beyond 50 lacs? Sourav Shah of Aegon Religare helps us to understand this –

At higher insurance rates, the medical tests are compulsory for most companies. Mostly this limit is over 49.99 lakhs. So as such when a customer goes for medicals, the company is sure that they are insuring a better quality of life with a higher life expectancy. As such the risk with insured population of customers undergoing medicals and being issued a policy, is much lower than with customers who opt for lower sum assured and are not required to undergo medicals.

It’s a risk-reward mechanism. The company offers an incentive to the customers to undergo medicals by offering lower charges for higher cover. Only people who do not have enough time to go for medicals opt for life cover of lower amounts where premiums are higher. But this doesn’t mean that customers who do not undergo medicals and pay higher premiums should worry at all. Once they have declared all details correctly to the insurance company and are issued a policy, they are as secured as those customers who have undergone medicals. Also the medical costs are borne by most companies. For instance AEGON Religare bears the cost of medicals for all customers.

So from this statement what I can understand is that if you take the policy for more than 50 lacs, the company makes you go through medicals (mostly all of them) and that way they can sure at the start itself, if they want to issue a policy to you or not. In case you go for lower sum assured, then they charge higher premium because they dont make medicals compulsory! . So this reason for lower premium for more than 50 lacs should be the first reason why you should opt for more than 50 lacs cover. As you can see from the snapshot above, premiums for 40 lacs and 60 lacs are almost same, so why settle for 40 lacs ?

Reason 2: Medicals are compulsory for Term Insurance of more than 50 lacs

It’s mentioned that even those people who do not go for medicals, don’t have to worry about their claims if they are not around, because they are generally paying more premiums, for the reason they don’t have more than 50 lacs of cover. However, personally I think it’s a grey area despite all the regulations. Let’s take a case, suppose you are suffering from high BP, but you are not aware about it and then you take a term plan for 30 lacs where in there are no medicals and in the declaration you mention that you don’t have any illness, because basically you are not aware about your own illness. Now in this case, what difference does it make if you are really aware about it yourself or you are not aware about it. Later on after 5 yrs suppose if you die, then company can prove the point that you had high BP at the time of taking the policy, but how will they prove that you were aware about it or not.

You all know that ICICI iCare has no medicals in their term plan upto sum assured of Rs. 1.5 crores and that’s the reason why their premiums are higher than other companies term plans because they factor in this point that there would be many people with illnesses. Some might be aware about it and some might be not. But today if you have the option of clearing things in black and white and have your medicals done, then its better that you do it, so that tomorrow there is no chance of any confusion and repenting (oh .. you will not be around even).  Even Sourav Shah of Aegon Religare thinks alike .. here is what he says about this “no medicals” term plans.

Yes, you are right. A term plan without medicals will obviously factor in the cost and be planned accordingly. But it dosent mean that there should be problems at the time of a claim. If the customer at the time of taking the policy declares all facts correctly then there shouldn’t be a problem. But as a personal view Yes, I would definitely recommend that a customer goes for medicals and then applies for a term plan as this leaves no room for ambiguity or any doubt that the customer was absolutely healthy when he undertook the plan. But then this is strictly my personal view.

So were you planning to split your term plan and take two term insurance plans for less than 50 lacs? Better take plans for more than 50 lacs each and mostly it will not affect the premiums. What do you think about these 2 points which I have mentioned? Do you agree about these points about term insurance !

269 replies on this article “Why you should take more than 50 lacs of term insurance”

  1. Roshni says:

    hey i want information regarding health plans

  2. Charulatha says:

    i am 45 yrs, old, have a home loan of 35 lac. would like to take a policy worth 40 or 50 lac,
    which policy will be best and what would be the approx premium per year.

    1. Hi Charulatha

      I can see that you are thinking of buying a term plan. ALl you need to do is leave your details at https://www.jagoinvestor.com/solutions/buy-life-insurance-plan

      Our team will get in touch with you


  3. Arora says:

    Dear Manish,

    I have purchased two online term plans worth 50 Lacs each from ICICI Prudentials and Max life. Both insurance companies have issued term insurance policies to me without doing any medical test. Executive from Max life has called me and said that there is no medical test required in my case. When I have asked him that then how you will make sure that I don’t have any medical problem, then he has answered in 7000 rupees premium, they can’t do full body scan. ICICI Prudentials (10800 rupees premium) has not even called me for the same and issued the policy.

    As of today I don’t have any Disease/Medical Problem mentioned in policy conditions, but as you never know about future and any Medical Problem can occur to anyone. As I have taken this policy for next 35 years, I don’t want my family to be in situation if they file claim in their bad time and these companies reject it by saying that some Medical Problem was there at the time of taking this policy as we have not done Medical tests.

    Are all companies doing this these days to save medical checkup expenses? As I know couple of years back my friends have taken similar policies and blood/urine tests has been for them. Please suggest what should I do. I am still in free lookup period and don’t want my family to be in trouble after me.

    1. It does not work like that . If you are young then for small sum assured (50 lacs is small these days) medical tests are not done and your declarations are considered.

      At the time of claim they cant reject it . Anyways after 3 yrs of policy in force no company can reject any claim on any grounds


      1. Arora says:

        Thanks a lot Maneesh, for your guidance…

  4. Zubin says:

    I have my own pvt ltd company in which me and my mom are director. I had loses in the first 3 yrs. now a profit of arnd 1.5 lakhs. I used to draw a salary of 12000 in the first year, then 20000/- and now in the current year 25000/-
    Am i eligible for term insurance of 60lakhs and which companies you recomend. Also my company has now a turnover of 12 lakhs.

    1. I think only life insurance company can tell you that ! .. we cant comment

  5. dixit vijay says:

    thanks boss, but why not specific and into merit and demerits of the issue ?

  6. dixit vijay says:

    hi manish,
    thanks for the answers provided.
    incidentally i would like to know whether a non working woman i.e. housewife is eligible to purchase the term plan on the basis of income proof of husband ?

    1. No , its not possible that way ..

      A person can take term plan only on the basis of his/her own income only

      1. dixit vijay says:

        thanks !!!!!!!!incidentally i would like to inform you that my son is having rs. 1 crore term plan with bharti axa purchased in feb 14. he is drawing rs. 13 lakh p.a. and now applied for term plan for his wife, who is not working but a housewife. even bharti axa issued a policy in her name on the basis of income proof of my son. shall he proceed with the same ? medical is yet pending and it is possible to look the same differently if your opinion is negative.

        1. In that case go ahead with same company

  7. dixit vijay says:

    please inform whether a housewife is eligible to tale a term plan and if yes which is better ?

    1. Its not about housewife .. if you are earning you will get it, else it will be tough !

  8. Vikas Badhwar says:

    Hi Manish
    I am 27 years old and want to have 1 cr term insurance for 35 years. I zeroed out on Aviva i-Life(35 Yrs, 50 lacs) and Aviva Health Secure/30 YEARS and Max Life Online Term Plan(35 Yrs, 50 lacs) and Max Life Comprehensive Accident Benefit Rider . What would you suggest.
    Should I opt for Aviva and Max.
    Can i trust these companies for long run.

    1. I am more in favor of Aviva personally. TRUST part is a personal thing . I trust them does not mean you will also trust them . So thats something you have to decide. I think they can be trusted .

      1. Vikas Badhwar says:

        I have taken Aviva for 50 lac…. and I want 50 lac with some other company. Which pan would you recommend.

        1. You can go with HDFC now

  9. Pankaj Kumar says:

    Hello Manish,
    Why it is mandatory to provide other insurance details while taking term insurance. What if I dont want to provide?
    I have purchased a term insurance from Aviva (iLife), they are asking if I have any insurace/investment from other providers .

    1. So that they can find out how much insurance you already have, because one cant take unlimited insurance . It has some limit like if a person has earning of 50k per month, he cant cross 2-3 crores (not exact, but just a figure)


  10. vijay says:

    Hi Manish,
    I Have Reg Finance Company I want to Insure my Customers who have taken loan from Us against Natural, Accidental & Suicide Death (Suicide death Coverage after one year).
    Term Plan, my Requirement is from 1 to 5 Lakhs & which should me assignable to our company.

    Which company will provide with above facility please let me know


    1. Vijay

      How many people you have ? If its just 20-30 , then I am not sure which company will be able to help you , have you approached anyone ?


  11. vasu says:

    Hi Manish,
    I ‘m 38 years old, i am planning to take a term insurence for 50 lakhs for 30 years , can u suggest me which is better in these
    2. KOTAK
    3. BIRLA

  12. Maheh says:

    Hi Manish, I m 33yesr old, i want to purchase Term insurance plan for my family, Can u suggest me which is better.

  13. rameshwar says:

    what type of death are covered and exempted by hdfc click 2 protect online term plan

    1. I dont think anything is exempted

  14. Ashok Singh says:

    Hi manish,
    I am 29 years old and I am looking for a good endowment insurance plan for myself.
    can you please suggest a best plan for me.My income is 5-7 lacs per annum.
    what about AEGON Relygare I Maximise Plan………
    plz suggest…………

    1. No , better do not choose any POLICIES ! , rather go with mutual funds


  15. Prashant says:

    Hi Manish,

    I am 23years old and I am looking for a good term insurance plan for myself.
    can you please suggest a plan for me?

    1. Aviva or HDFC Is good !

  16. Dr.Suneet Jindal says:

    Hello Manish, Can you tell me about BhartiAxa eProtect Plan.. is it good? You or any of the person you know had any experiences?

    1. You can go with it , while there are no live experience, there should not be much issue

  17. Saroj says:

    Hi Manish,i want to take a life cover of 1 crore.my present age is 31 yrs please suggest me the best term plan among HDFC,Aviva and Bharti Axa.

    1. While there is nothing like that .. still if you want to hear one name, I would say Aviva !

  18. Satyajeet says:

    I am thinking of buying a 1 crore term insurance from bharti axa. But the website says that the minimum salary required for this plan is 5lacs, which is slightly more than my salary.
    I am willing to pay upto 7,000 pa for a 1 crore term plan,which should cover accidental death situation also.
    Can you suggest me a suitable plan?
    Thanks in advance.

    1. viru singh says:

      my date of birth 27/11/1967 , i am intersted for term plan but i am confuse my
      income 3lakhs , samal shop extera income i am smoker, & alcoholle kabhi kabhi , letast i am going madical chacking i am ok no any issu find me , my age 45
      i have no insurence so ple, suggest me how much
      ple suggest me compny name and plan

      1. First check with some insurance company like Aviva or Kotak .. take aterm plan of 50 lacs to start with

    2. I think a lot of companies will follow that .. Better try once and check if you are able to get it with some other company like Aviva ..

  19. Shankar says:

    Hi Manish ,

    I’m 38 old and having taken term plan from Birla sunlife of 50 Lac last year June . I have read your blog and threads . I want to take another term plan in next 1 month which is 50 Lack – 1 Cr . Could you pls suggest which one I should go far it . I want premium low and good settlement ratio . Kindly help .

    Thanks ,

    1. Aviva , HDFC are good option .. make sure you update the new insurer about the old policy

  20. Sukoon says:

    Hi Manish, I’m 23 years old and have purchased Aegon Religare iTerm plan for the sum of 50 Lacs for 75 years. Do I need more insurance? If yes, which one should I go for after Aegon Religare and for how much sum?

    1. will 50 lacs be enough for your family for EVERYTHING in life if you are not there tomm ? If yes, then see what is the short fall and take for that amount !

      1. Sukoon says:

        Thanks for your reply. Could you suggest some other companies for additional cover of 50 Lacs??? I have read your blogs and in one of them you have praised Aegon Religare iTerm plan a lot. Is there any other company you would like to recommend which is too close to Aegon Religare in providing same or additional benefits???

        1. there are many now .. you can look at Aviva , HDFC , Kotak

          1. Sukoon says:

            Could you please prioritize among Aviva, Kotak, HDFC??? Like 1st..2nd..3rd.

            1. It cant be done .. because there is nothing like that .. you always can rank them based on some parameter like Claim settlement ratio, premium , profitibility, etc etc .. but only “best-ness” .. Just pick on and go ahead .. you are looking for too much of perfection and thats blocking your action . Read this https://www.jagoinvestor.com/2012/05/is-looking-for-perfection-killing-your-financial-life.html

            2. Sukoon says:

              Thank u so much to introduce me to this particular blog. This is what exactly I’m going through. Thanks once again.

  21. Prashant says:

    Hi Manish,

    I am 28 yrs old and I have planned to take 1cr term plan, so I thought of splitting it into two policies.
    One policy I have taken from Aegon-Religare for 50 lakhs with accidental and critical illness riders.
    However I am not able to decide which policy to be taken as a second. Is it better to go with LIC or any private company. Also can you kindly suggest me any good term policy on the same lines as that of Aegon-Religare.

    Prashanth Reddy.

    1. Then go for Kotak or HDFC

  22. Kumar Jyoti says:

    Hi Manish,

    Very helpful information, thanks a lot to share this.
    I am 34 yrs old and want to buy term plan with Accidental benefits for 50 to 75 Lakhs, kindly suggest better one and also have best claims ratio….


    1. Kumar

      You can look at HDFC, ICICI and Kotak as your options !

  23. Satish says:

    Hi Manish,
    See this article on rediff.
    I am surprised to see that HDFC is amongst top three in number of complaints of different types. Its also topper in Unfair business practices complaints.
    May be its more related to ULIPs.

    1. As its a big one, obviously the complaints will also be bigger 🙂

  24. Alok says:

    Hi Manish,
    1. I am 29 yr old and looking for a term insurance between 50lac to 1cr. It should cover all kind of death by earthquake, terrorist attack, illness etc. Please suggest a good policy
    2. what are additional medical tests for 1 cr compared to 99 lac insurance bcz premium increases from 99 lac to 1 cr

    3. to include permanent disability how much extra i need to pay

    1. This will all depend from policies to policies, did you try one ??

      1. Alok says:

        I am planning to take Bharti AXA e Term for 1 cr at a premium of 8090/yr. Does this also include death from terrorist attack and natural disaster?

        1. If its brochure says then its included

  25. Rakesh Samar says:

    I applied for two online term policies from different companies at the same time. But I did not mention the fact to the second company that I am also applying simultaneously for a similar sum assured. Now both the policies are issued. Will there be a problem in case of a claim?

    1. No there wont be .. did any company ask for any term plan you have applied for ?


    Hi Manish
    Iam a doctor aged 45 years with no medical illness, with anual income of 1200000. I had 3 LIC polocies, but presently Iam a defaltor, not paying premiums due to various reasons. Now I want to go for a term plan. After giong through above tables, discussions and letters Iam in cofusion in choosing the plan. kindly suggest me a plan with more than 1crore with least premium and better claims.


    Dr Balaraju Ch

    1. You can look at Aviva term plan or Kotak in that case

      1. DR BALARAJU CHENNA says:

        thank you

  27. Sumit Singh says:

    Hi Manish…. an advice needed which would be very valuable for me.

    I am 33 and was diagonosed with diabetes last year. Now my diabetes is under control and sugar levels are nearly normal. which term plan would you suggest and for what amount. My annual income is 11 lacs p.a.

    I was planning to take a plan from bharti axa for 50 – 75 lakhs. Would the premium increase dramatically due to my illness.

    Please suggest.


    1. Yes .. you premiums will increase a lot because of this, even if things are in control now , what really matters is that you have them .

  28. pragit says:

    Hi Manish,

    I am 27 Year old & planning for a term cover of 1 Crore, from 2 companies 50L each. I just gone thru various product documents & decided to go with :
    1- Aegon-Religare 50L plan with waiver of premium rider on critical illness till 75Yr age. It will cost me around Rs 4283.
    2- Bharti AXA : 50L plan for 30 Yr for a premium of 3800.
    Please suggest whether my decision is good or you see something better than this. Your suggestion would be highly appreciated.
    Also have one query, yesterday I got a call from Kotak Life for online term plan which claims to provide settlement in case of suicide, war, terrorist attack or death due to any reason, which other plans are not giving. But when I checked the documents online, there were no such terms & conditions found. Also within 1 year claims will not be provided in case of suicide. However I am not going for suicide :P, but there terms & conditions were not clear to me. So do you have any idea about this product? Bcoz if it provides cover for death in any condition, than by paying 2000 extra, 1 can have peace of mind, otherwise go for other options available.

    1. Pragit

      A term plan covers all kind of deaths, even accidental .

      All you need to look while choosing a company is your trust with the company because you should not doubt the judgement too much everytime, your current choice looks fine to me ..

  29. kuldip says:

    one of my friend is detected diabatic recently age 44 yrs . He is asking me tosuggest which company provide term insurance to diabatic person. And what are the criteria for the insurance companies regarding term insurance

    1. He will face a lot of issue . his premium will go very very high because of this !

  30. Ashu says:

    Hi Manish,
    I am 37 years old. I don’t have any insurance currently. I read many posts on term insurance on your blog and decided that I will buy
    1. Bharti Axa eProtect for 1Cr for 20 years (unfortunately this is maximum they are providing for my age). I selected them because of low premium for me (non-smoker).
    2. I also plan to buy LIC Amula Leevan for 25 Lakhs.
    I wanted to have CI and DR for atleast 50 Lakhs. I have already purchased eProtect, went through medical and waiting for the policy. I called their customer care but they are telling that they can’t provide any rider with this policy.

    What should I do:
    1. Is there a way to buy standalone riders from some company? Seems No.
    2. Should I cancel this policy in the lookup period and buy other policy which provides me these riders.

    LIC policy I will just buy as suggested on this site to have smaller coverage from them also, I can’t buy riders for 50 Lkhs from LIC as policy itself will be for 25L and also riders will be expensive from LIC.

    Thanks for your advice,

    1. You should have checked before hand if the policy has the riders or not . I would suggest take an accidental plan from other company , What riders you want ?

      1. Ashu says:

        I want to buy Critical Illness and Disability Riders. Is it possible to buy them separately?

  31. Siddharth says:

    Hi Manish,

    I’m 27 and currently paying 16k premium for 50L term cover from LIC for 35 yrs. I’ll be paying my 2nd annual installment this October end. As compared to other online plans and the cover they provide, I find my current premium quite costly.

    Is it worth continuing with the current LIC scheme? I am considering buying a cover of 1C online.


    1. I think there is no harm in taking a policy from a pvt insurer !

  32. dhiraj says:

    Hi Manish,
    I need to buy a term plan of 1 CR, my age is 30 years. Which is the best Term plan for me.

    1. There are good options like Aviva, Kotak , LIC

  33. Baljinder Singh says:

    I want to buy a term insurance for 50 lakh, suggest me the company

    1. go for Aviva , Kotak or HDFC

      1. Baljinder Singh says:

        what about rider, Aviva’s adviser suggest me for without rider, is it good or not?

        1. Rider has to be decided by you , no one else can decide on your behalf

  34. Shivram says:

    Dear Manish,
    This one is also informative & may be gererally true with some Insurers but I do not agree .
    I work out premiums for Mr. ABC (30 years) with PPT 30 years, from Rs.30 lakhs to Rs. 1Cr. & compared the premium & observed that it is linier variation (i.e. straight line). Hence I say that your say” premium comparatively reduces after cover of Rs. 50 lakhs” is not true, at least for KIL
    Shivram, 25 August 2012

    1. For which insurance company is it not happening ,is it online term plan ?

      1. shivram says:

        It is for KLI ( Kotak Life Insurance ) preferred Term Plan , not ‘Online’ plan.
        For exemple in my earlier comments the figures are (suitably rounded) as below –
        SA Premium/ year
        3000000 4125
        4000000 5180
        5000000 6235
        6000000 7300
        7000000 8350
        8000000 9400
        9000000 10500
        10000000 11500
        The fact will be more clear from graph( which I ,unfortunately could not copy & pest here)

        1. Ok , then this is not true for offline term plans .

          1. Shivram says:

            Mr. Manish,
            Thanks for your confirmation, as a Financial Planner I had started convincing some clients in this regard. Your both reasons are quit logical. But before proceeding ahead I just calculated for hypothetical case, with ‘KOTAK Life Insurance’ preferred Term plan (as Mrs.Shivram is Kotak L.A.
            Keep writing. Thanks once again.

            1. Good to hear that Shivram .. you might want to join our facebook group jagoadvisor – https://www.facebook.com/groups/jagoadvisor/

  35. Abhijit says:

    I am interacting with the insurance advisor from policy bazaar & come to know that if you have a term plan of Rs 50 Lacs & an accidental rider of Rs 50 Lac it means that you have total cover of 1 Cr.

    It has been told to me that you have a limit to which you can get term plan i.e. 20 times of your annual gross salary.

    Hence, if you have an annual salary of say 5Lacs you are only eligible to get a cover of maximum of 1Cr only.

    I was thinking of splitting my term plan with 2 companies 50 Lacs each & one of those will have accidental rider but now as mentioned above if I take accidental rider I will exhaust all the limit of 1Cr with only one policy of 50Lac sum assured + Accidental rider of 50Lac.

    Do you thing whatever advised to me is right?

    Also, I am planning to spilt my Term plan cover in to two companies AVIVA (comparatively cheap) & HDFC Click 2 protect (reliable), do you thing I am on a right path?

    Your timely reply always found to be very valuable. I am planning to complete with it before this month end.

    1. Yes you will have a 1 crore cover, but only incase of accidental death , If you die because of any other thing, your cover will just be 50 lacs then .

  36. Abhijit says:

    Yes I do…Thanks for the information Manish.

  37. Abhijit says:

    Hi Manish,

    Thanks for the answer for my first question however can a brother put in as a nominee? is that fine?

    Pls advice.

    1. A nominee can be “anyone” .. so brother is fine, but understand what it means then !

  38. Abhijit says:

    Hello All / Manish,

    Have a small question about the family or mentioning the dependents.

    Case 1- Insured person is on picnic together with his family (nominee wife) with him now these guys met an accident & both the insured & the nominee (wife) is no more. However children, Father & Mother of the insured person are still alive.

    Now, as the nominee also no more who will get the sum insured?
    Do we have a facility to assign secondary nominee (in case first nominee is no more). Secondary nominee can be elder or smaller brother.

    Is a brother can be kept as a nominee? Is brother can be considered as a member of a family of a married man (insured person)?

    Pls advice!

    1. Abhijit

      Note that when a nominee is dead, its as good as no nominee . So the money will be handed over to legal heirs !

  39. Vishnumoorthy says:

    Dear Manish:
    I just saw premium for 75 lachs term insurance in policy bazar. It gave me result as
    aegon religare : 5647.
    LIC : 17,025.

    My doubt is, why this much big difference in these 2 companies? What factor decides these premiums?

  40. Aditya Kumar says:

    Dear Manish,
    Thank you so much for your valuable advices……
    i have policy from LIC Endowment Plan which annual premium is Rs – 12,200 and it is 8 years old policy.which pay my father.
    i have a query , currently i am planning to take a Rs- 50 lakh online term plan. but as i am a student and i am 24 years old.i dont have any earnings , expect from stock market but it is very nominal.
    a policy bazaar call center executive old me. i can give an ITR file showing income from COACHING & STOCK MARKET upto Rs – 2 lakh. company will surely issue the policy to me. and same my family Chartered Accountant told me.
    so i want your advice. what i do ?weather i do so or not.

    1. Aditya

      Dont do that , why dont you first take a job and then do insurance . Dont get into what someone is telling you

  41. Ansh says:

    thanks manish….keep up good work you n ur team is doing 🙂

  42. Ansh says:

    Thanks a lot Manish for your valuable answers ..as per my last question, can i expect a premium hike and also by how much %…

    1. I dont see any reason for premium hike in your case !

  43. Ansh says:

    Hi Manish,

    I am 30/M/Non-Smoker and planning to buy two online term plans of 50 lakhs each, one of Aviva iLife and other of LIC when it will be launched.

    Below are few of my queries :

    1) My opinion of taking two term plans is good, or shall I go ahead with only 1 term plan ?

    2) Is it good to go for Aviva, as it’s the only one available with 35 yrs policy term with lesser premium ?
    Aegon Religare, which gives policy term till 75 years, I simply don’t trust due to its low claim settlement ratio.

    3) When can we expect LIC to launch its Online Term plan, the last news I heard was they were planning to launch it in Feb’12 end..but its been few months now and no news about it.

    4) My father died due to Tongue Cancer, though I don’t use any tobacco products, can this also be a reason for premium hike ?

    5) I had bladder problems few years back and presently I am not on any medications, so is it good to disclose this information in the proposal form. By how much percent can i expect the premium to be raised in such a case ?

    Thanks in advance.


    1. Ansh

      1. Its ok , you can take 2

      2. Yes Aviva is fine

      3. No idea

      4. May be yes, but you need to mention it if asked

      5. Yes its good to put this information , anyways there will be a question asking this in the form


  44. S Ramesh Kumar says:

    Hi Manish

    I agree with you to go for medicals and for high coverage to get the benefit of lower premium. However, I have a question?

    1. Presently, I do not have any history of illness. If I apply for Rs. 50 Lakhs insurance coverage and while medicals any illness is found. What will be the response of insurance companies. Will they still give the insurance coverage? Will there be increase in premium?? What other things will be included in payment of annual premium?

    1. Yes there will be increase of premium and that is very fair and logical , dont you think there should be increase in premium ?

  45. Rakesh says:

    In addition of this please share some useful information related exclusively to differently able persons if u have. Definitely it will help a lot to this community.

    1. What kind of info ?

  46. Rakesh says:

    Dear manish
    first of all thanks for valuable informations u shared. I have some query please suggest me.
    recently i m in process of buying term plan from HDFC(ONLINE). the things i mentioned are:
    1. I am disable person (40%) disability in one lower limb, though I can drive, do all my routine works perfectly.
    2, I am suffered from diabetese from last 02 yrs.
    3. I met with accident 3 yrs back get operated.
    by mentioning all this the online customer representative told me that my premiuim could be vary by little, but he didnot able to tell me tha exact amount by which premium increase.
    Now my question is :
    1. should I continue the buying process & pay basic premium?
    2. Which plan should I take, I am 30, M, Non-smoker.
    3.What are the other precautions I need to take care?

    1. Your premium might be a little more . may be 30-50% at times .. but you should go ahead with this and take it .. Just fill the form with true information , thats all ..

  47. Hemanth says:

    Nicely organized info. I have LIC ULIP policy which is more than 3 years old , is it advisable to break that policy and take a term policy. I concluded after reading the article that term policy is always better off rather than paying more to insurance companies.

    With Regards,

    1. Yes .. you should do that from Insurance point . If you dont want to cancel it, atleast take additional life cover through term plans

  48. Anand says:

    Hi Manish,
    I need to buy a term plan of 1 CR, my age is 37 years. Which is the best Term plan for me.
    I got to know the claim rejection for LIC is minimum but the premium is alo huge.
    The top 5 companies, i got to know are :
    1. LIC
    2. HDFC
    3. ICICI
    4. Kotak
    5. Aviva

    Which of these u recomend, or ae there other best then these

    1. Anand

      I would have listed the same 5 if you had asked me which one is best . Note that there is no “best” here .. all are same . If you trust a company, just go ahead

      1. Anand says:

        Thanks Manish,
        I was about to buy term plan of KOtak worth 1 CR, but one of my freind suggested that we should split 50- 50 between 2 companies.

        Is this advisable or we should go with just one company

        1. Anand

          The advantage of going with 2 companies, is that you can close 1 of them when you want and reduce the cover, else its fine to go with 1 company

  49. sangeeta says:

    How is the Bharti AXA life e protect. Does it cover term insurance properly as the premium being charged is very low as compared to others for the same type. Please guide.

    1. Yes Bharti Axa is a good option which recently came ! , you can go for it

  50. Jateen says:


    I recently got medical done through corporate offer & informed that i have slightly higher cholestrol (been asked to diet control & exercise).
    Can this medical test be used for online term plan?
    whether this cholestrol be an issue? high premium or rejection?

    1. Jateen

      Mostly the premiums will increase which is fair .. but for term plan or medical plan , companies will do their own medicals .

  51. Sreejith says:

    Hi Manish,

    I have taken a term plan of 40L after undergoing medical checkup. The company donot provide a copy of the medical results. Is there a chance that company can deny the claim when I am not there, stating any medical reasons? Should I insist to get copy of the results?

    1. Sreejith

      Mostly they should give you a copy as you are a customer now .. but I dont think you should worry about rejection .

  52. Anshul says:

    Correction :::
    On an average every person will pay 40 premium of 10000/- INR i.e 4 lakhs . — I meant 4 lakhs for each ie 4 crores for all 100 people…

  53. Anshul says:

    Hi Manish,

    I am considering to buy two term plans of 50 lakhs each… one from private insurance company “Aegon-Religare or Aviva” and one from LIC once the Online term plan is launched. Let know if thats the right thing to do ?

    Few concerns regarding private companies “Aegon-Religare or Aviva” :

    1. Which one is better in both …Aegon or Aviva ?

    2. How trustworhthy these two companies are ? Wat if the company shut down or closes its operations in India as 30 yrs is too long to predict anything. What would happen with existing policies in that case?

    2. Suppose they sell 100 term policies for 1 crore each for people with premium term up to the age of 75 yrs (maximum term in Aegon ) and lets assume the average age of all the 100 customer is 30 yrs. Given the life expentancy in India 80% people will get death maturity for sure (most probably). On an average every person will pay 40 premium of 10000/- INR i.e 4 crores . How is this possible that they will pay such a huge amount of sum assured to that many people ?

    Please give some advice on it ?

    1. Anshul

      1. Both are ok .. i will personally go with Aviva , but that does not mean AR is bad or anything

      2. Dont worry on that , some other company takes them over .

      3. You need to be clear about the insurance model , and how it works .. the case you took says 100 people buy 1 crore worth of term plan , but in reality those kind of numbers are not there .. if 10,000 people buy term plan worth 1 crore , only 2-3% will die .. so 100 crores has to be paid , but by that time permiums collected would be much much more than that

  54. Leena says:

    Hello Manish,

    I want to know about the interest calculation.

    Is it calculated on monthly or annually ?

    You suggest that pay the ppf before 5th april of every year, if i pay after i.e 10th april , how much it will effect ?

    Thanks ..

  55. Nilufer says:

    Am waiting for the LIC Term plan too.. hopefully this finanacial year…

  56. Rakesh says:


    Thank you, many people are not aware of it. I did buy a 50L online term plan from Aviva a couple of months back, still holding on to my old offline term plan from LIC and eagerly waiting for their online term plan.

    1. OK , if you want to dump the old one, let LIC one came and then only dump the old one!

  57. Atharva says:

    Hi Manish,
    I am new to this blog and have found your blog immensely useful.
    After reading all the queries on term insurance , i have following queries , you may help me with the view.
    I am in process of buying term insurance for 1 Cr INR and the cheapest available is from AEGON Religare Life Insurance and for longest duration up to 75 years .
    But the claim ratio is pathetically low for AEGON Religare , that was the only reason I started doing this research and taking views. Or its more advisable to go with 2 split policies 1 . HDFC life and 2. AEGON Religare Life Insurance

    Is it fair to say there is no way to guarantee that the claim gets accepted in event of death (even after medical test is taken up as well as all information about health / disease is disclosed) ?
    Is there a way an appeal can be made in such event, also is it advisable to make such appeals in court?

    I know I am thinking extreme possibilities , but in event of my death , I wont be there to fight this battle for my dear-ones
    Thanks , AJ

    1. Atharva

      Dont worry about the claim settlement part to this level .. Just make sure you dont give any wrong info in the form , thats all .. go with HDFC life and AR , thats ok


  58. Abhinav Gulechha says:

    Hi Manish

    First of all thanks for providing us a new perspective through your post. Till date, I was not aware on this differential pricing and reasons for the same. I personally have split my Rs. 1 crore insurance into 2 policies of Rs. 50 lacs each, splitting was just done with an intention to diversify the risk of non-honouring the claim,

    I have some points to make:
    • First and most important thing is to identify the requirement of insurance and then arrive at the sum assured.
    • Post that, diversify the exposure into 2 companies (so that in spite of following all procedure, in case claim is not honoured, pending resolution of dispute, your family can at least tide over the difficult period)
    • Here the point will come on the amount of insurance one should go for. Here I completely agree that if the same SA is available at 2 price points (one below Rs. 50 lacs where there is no requirement for medicals and second > 50 lacs where medicals are required, it is definitely advisable to go for the second option!)

    However, on the pricing bit, two points I wish to specifically make:
    • Medicals alone will not itself serve the purpose in absence of proper disclosures on proposal form. In the proposal form, there is a space for self, spouse, and parent’s health also. While the medical is done only for the insured, if the insured’s father had died of heart attack in early in life and that fact is not disclosed in proposal form, it will make the contract voidable at option of insurance company.
    Similarly, and more pertinently where policies are splitted, non-disclosure of previous insurance covers will also make the contract voidable at option of insurance company.
    • As regards your statement on a person suffering from high BP where the disease comes to light after 5 years, Section 45 of Insurance Act, 1938 clearly comes to the rescue of policyholder: It says that no life insurance policy can be cancelled after 2 years of date of issue on ground of fraud, if the insured, while taking the policy was not aware of this fact (generally, insurers dont take harsh steps against policyholder in such scenerios in view of protection offered u/s 45, however, its not worth taking the chance since one will not be around by then:)…

    Thanks. Excellent and informative post!

    1. Thanks for your views Abhinav 🙂

  59. Tisha says:

    We explained post Manish,
    Well a term plan generally costs less.. i-life costs around 7000/- p.a for 1 cr. life cover.

    1. Tisha

      I think you mean “online term plan” . You can also see Bharti AXA life insurance, It might be even less than 7k


  60. Kavita k says:

    hi Manish,

    thanks manish for the informative article. i would like to take a term plan for my son who is 18 years of age. can u suggest of what amount should i take it ?

    i am also reading ur JAGOINVESTOR book as i get time, As i am a housewife, i loved the articles and the knowledge u have shared with us. Thanks for the same.


    1. Kavita

      I am not sure why you want to take a term plan for someone who migght not be earning at the moment , better your son takes it when he starts earning or when someone is financially dependent !

  61. Krish says:

    Last year I had taken ULIP under friends obligation. I have no compaliants against how it is structured or commission part. This is from the private insurer and quite reputed.

    My second premium is due this month and have received prompt renewal request notice. All my details are available online so that at any point I could see my fund value. When the premium notice was recd, I have asked very simple question i.e. whether the premium would be deducted as auto debit or should I have to pay through net banking. I don’t receive any reply even after 3 mails. Generated complaint and the response came after 2-3 days.

    After payment of premium neither the receipt was generated nor was mailed for next 10 days. Once again mails to the customer service gets ignored. Again generated a complaint and receipt was generated.

    If this is the response to the customer who is paying very high premium and that too for ULIP, face hurdles like these for payment of premium, I don’t get confidence that these companies would ever settle insurance claims. I stop thinking what would be the scenario for term insurance claims. No stats are available for term insurance claims and I see it as big risk for customers. Until I see the true picture, I would not be advocating to anyone to get the term insurance. Worse, I don’t have even one case study of term insurance settlement. I am afraid that con job is going on and customers are taken for ride.

    1. Krish

      May be you can share which company is it , also seems like their customer service is not that good because they are taking so much time to reply even a simple questions !

  62. KNMP says:

    I have some experiences to share…

    1. I have taken a term policiy from LIC for 35 Lacs, and I did go for medicals.. So I am not sure if medicals are required only when SA is > 50 L (same is the case for SBI Life).

    2. I tried SBI Life before LIC ,but they found something wrong with my ECG and increased the premium by 250%. So I changed my plan. However later I confirmed with my doctor that I do have a problem with my ECG.

    3. With above knowledge I took LIC term plan, but their test didn’t show anything wrong with my ECG and I got the policy (without disclosing the issues found by SBI life to LIC) .

    4. I am not planning to take another term plan with full disclosure, if that works out, I will cancel the LIC plan, hope that works out well.

    5. Recently I was involved in a death claim settlement with LIC. I came to know that there is something called – Early Claim (deaths happens before 3 yrs of commencement of the insurance). Under these scenarios the settlement process becomes long and tedious. You will be asked to fill more than 7 forms (for non-early only 1 or 2). Also from my personal experiences when someone very close passes away under circumstances that you can’t control, you may not have the required documents and may be you will not care for them at that time. This becomes a real problem while settling the claim. Mine was the case of SA = 1 Lac with LIC and we are still struggling, so imagine the complication with for bigger claims.

    6. I was also involved in settlement of two non-early claims both were with LIC. The SA amount for both the policies were 1L. For these cases all I needed to submit was death certificate and two filled form. We got our settlement checks in 10 days. I am not sure what was the reason for this easy settlement – LIC or Low SA or Old policies (policy started in 1997).

    I am no intending to conclude anything from my experiences, I just thought others may benefit from these.. It open for your interpretation..

    1. Rajesh says:

      Thanks KNMP for sharing your experiences.

      Manish, by now Jagoinvestor is already known for its no-nonsense advice on personal finance. In my opinion, experiences communicated in an unbiased manner (and not like complaint registering) such as the one above by KNMP are read with interest and are a good value addition. It would be of great for the readers if you could present such experiences in an organized manner (like a dedicated page or something).

      1. Rajesh

        Its a good idea , let me ponder over what can be done in this !

    2. Thanks for sharing your experiences .. its really helpful !

  63. sreeram says:

    Hi Manish ji,

    Nice article..

    I have a small query..

    I am presently having 2 Term insurance plans from sbi life.. i plan to drop one as the premium being paid is high and is now enough to get me a Rs 60 lac cover under teh bharati axa eprotect plan..

    If i just discontinue paying the premiums on sbi life policy, will that suffice.. or i should formally write a letter to the sbi life regarding my intention to discontinue the policy..


    1. Sreeram

      Just discountinuing the policy should work , but it think it would be safe and good practice to formally close the deal and let insurer know that its your intention to close hte policy and its not that you have accidentelly done it !

      1. sreeram says:

        Thank you, will do that 🙂

    2. Prasoon says:

      I had written a letter to SBI Life about discontinuing the policy some one year back. In that letter I had mentioned that I knew that it was a term plan and I would not get any money by cancelling it. I had attached my policy as well with that letter. After two weeks they returned my policy saying that ‘it’s a term policy and it can not be surrendered’.
      I thought of taking no action after that. It still shows as ‘Lapsed’ state on their website. Also, I get letters with some offer for reviving that policy.
      Really don’t know how to stop.

      1. Prasoon

        When you say SURRENDER , the company just thinks that you are assuming that you will get money back by surrendering the policy, hence they must have mentioned that there is nothing like SURRENDER in term plans, they just lapse and nothing else. Dont worry .


  64. Murugesh says:

    Hi Manish,

    Thanks for the info, i am 35 yr old, i have taken Kotak eTerm plan of 15L cover paying Rs 4100/- and thoght of buying another one with different company. now i rethinking to discontinue that and will buy atleat 50L cover policy to be in safer side to protect my family. also my birth day comes on 26-Apr after that i will fall in 40 yr catogory were i need to pay more premium.

    what you suggest for me?


    1. Murugesh

      Yes you should be taking more than 50 lacs cover for sure , 4100 is too much as of now for 15 lacs, you will get 50 lacs for around 5-6k easily . Dont have this myth that you will have to pay more premium if you cross your birthday , they take NEAREST birthday as your birth date to calculate the age, so if its below 2 month from birthday or after 2 month , its SAME !

  65. K.M.Manohar Kumar says:

    Very good points Manish. Thank you. I am sure this will act as an eye opener to many who may not have been aware of the points. I never thought about it myself. Then again I never believed in Life Insurance as it only benefits someone else when the life assured has kicked the bucket and detached from this life. No doubt it is a security for people who have dependents. I can’t even get a medical cover.
    Coming back to the points, definitely it is better to undergo medical examination and get higher cover for the same premium and also avoid the possibility of confusion / difficulties for your dependents at the time of making claim and receiving money.

    1. Yes KM Manohar

      thanks for your views .. why did you say you cant get the medicals ?

      1. K.M.Manohar Kumar says:

        What I meant is that I am not able to obtain health insurance. You had referred me to medimanage (I am not sure if the name is correct). There has been no further communication from them. Hence I assume that they are unable to help me obtain a medical insurance.


        1. What was the last communication from their side ?

  66. Jerry Jose says:

    Manish this is a new information to me. Now I also will advice my visitors to go for high sum assured in term insurance plan. Thanks

    1. Good to hear that Jerry !

  67. Sandeep says:

    Hi Manish

    A informative article .Here I want the readers , who already have term plan , to know two more facts

    1. One should review the SA from time to time depending upon the current need .Once the person’s net worth start increasing (Assets – Liabilities) , SA can also be reduced to save premium amount .This can be done by discontinuing the old policy & buying the new one with reduced SA

    2. Term Plans premiums have reduced lately .Hence one should keep the watch on the premium current being paid v/s market premium . Accordingly the decision to switching over to new policy can be taken

    1. Sandeep

      Thanks for your suggestions Sandeep . Both the points are really something which one should think about. It will be a smart choice !

  68. Samir says:

    Manish, hi…have been reading your blog for some time now. I have just taken 100L term policy from LIC of india. My earning is 11L per year so have taken S.A. atleast 10 times my annual earnings. Policy name is amulya jeevan.


    1. Samir

      Good to know that . I am sure you must be properly covered, but it would be a good idea to see your insurance requirement once using this calculator : https://www.jagoinvestor.com/calculators/html/Insurance-Calculator.html

      1. Samir says:

        Thanks Manish. The calculator is useful. I did a quick calc and it returned 85L as S.A. so I am on target it seems.
        The term plan is from LIC with premium of 48K p.a. This may be costly than other insurance providers, but I am considering the highest claim settlement ratio of LIC as compared to others. Am I wrong ?

        1. Samir

          thats totally your trust , nothing else. High settlement is of no use if you mess up any information while filling up a form, your claim will not be paid by LIC , in the same way the claim will be paid by other companies incase its a genuine one . I truely feel, you can take atleast a part of cover from other companies as well.


          1. Samir says:

            Hi Manish,

            I think you are right. Its too late for this year since the premium is already paid, about 48K. At the end of this year, maybe I will reconsider of whether to continue with this current scheme or not. May be I may consider to split 25L x 4 insurance companies each. This will mean no repeated medical tests due to low S.A. (25L) each company (a guess), and not all eggs in same basket. Thanks.

            1. I think 4 of them will be too much .. why dont you just go for 2 .. why are you running from medicals ?


    Manish….Once again a very good article. Thank You So very much!!

  70. Abhijeet says:

    Hi Manish, Even I agree that one should go for medical test and have maximum clarity with the insurance provider. Basic reason person takes term plan so that in his or her ABSENCE dependents/family members won’t suffer for any settlements and any financial planning won’t get affected. So one should always have clarity and be logical

    Also another thing which came into limelight in jago investor that in general LIC have high premium because mortality chart logic they use is old one and won’t consider today’s better medical facilities and longevity (unlike many private companies) but being a government body trust on LIC is very high.
    1) So does on line term insurance plan from LIC can give little bit benefit and any data if available?

    2) Also any trusted private company any one can suggest from his/her personal experience?? I understand any suggestion would be completely personal and no offence to any particular company


    1. Abhijit

      1) Online term plan from LIC will come soon, no clarity on that as of now .

      2) No personal preference , but some companies like Kotak , HDFC can be placed higher as they are little more known names and trust would be next to LIC

  71. Alok says:

    Just checked on Aviva-i-Life….Premium increases till 45lacs SA & then it takes a dip of approx. 30-35% for 50lacs …wow!!

  72. S.Banrtjee says:

    Manish, thank you for the wonderful eye-opener. I failed to realize how on earth the insurer will test for presence of pre-existing decease by testing? The general practice as I have seen is the deceased family moves to insurers few days after the cremation/burial. Only the medical record (if any) available at that time of death and may be by questioning the relative/friend of the deceased the insurer may come to some conclusion which may be right or wrong. Because if the questioned person is a foe he may misled negatively and a friend may do the same in opposite direction. So the onus is on the insurer to do a TPA and check whatever they think right. What’s your opinion?

    1. S Banarjee

      Yes , but the main thing is how do you prove that a person was aware of the disease himself and didnt declare it !

      1. S. Banerjee says:


        That is what i precisely want to say that it is ok and may be better if one declare pre-existing illness. But the insurer should generally have little legal option to prove it if they does not do any TPA earlier to insure. Probably this is the reason of higher charges? The insurer has less to worry except hassles on his family’s part but the insurance company has much to worry about. Also probably(not sure) as per IRDA rule after two complete year pre-existing condition should not come into question at the time of settlement. What’s your opinion?

        1. S Banarjee .

          Yes if a person has preexisting illness, at any cost those should be communicated to the company , and why do you think after 2 yrs those things should not be questions , I beleive you are reffering to a clause which says after 2 yrs ,company can not questions the mistakes done by the customer, but thats only for IMMATERIAL info (which does not affect underwriting) – However this point will very well be taken into notice


          1. Rajesh says:

            I understand from above that concealing any MATERIAL info (like any past illness) will haunt beyond 2 yr period also. Pl tell if I have understood it correct.
            Also, beyond 2 years period (say 4 yr), practically do the insurance companies carry out any investigation? or do they limit the investigation only to the within 2 yr claims only. Legally speaking, the insurer can investigate every claim (to find out if any Material info was held back by the insured). But does it happen in practice for claims beyond 2 yrs?

            1. Rajesh

              the basic investigation has to happen for sure . What if some one is dead and the “head” of the person is missing due to bad accident, the investigation has to happen to make sure that the person is the really the same person who was insured ?

  73. Abhijit says:

    Hi, I am a bit confused. I saw this term insurance from HDFC – Click to protect. Found it good. Researched a bit more and now planning to get term insurance with riders like dissability, accidental, etc. But not sure which insurance provider is good enough to trust? Plz. help……..

    1. Abhijit

      That has to be decided by you only and no one else, I trust all companies, but it does not mean you will also , Do you trust LIC , do you trust SBI etc etc

      1. Abhijit says:

        Where can I check the claim ratio and records of various insurance providers for more research?

          1. shweta says:

            hi manish

            this link is not opening…

          2. Abhijit says:

            Hi Manish. Thanx for the link. I have already seen it a long time back. But it was posted in 2010. Can get to know the latest info. abt the same?.

            And also abt the reply u gave abt the trust factor. I did some research. Problem is the Insurere I want to join with do not offer riders or if they do, then its becomes very much expensive to buy the product(Term insurance).
            An some has all the rider option available, but there is not much info. available abt their credibility. Could u plz. help?

            1. Abhijit

              If they dont have riders , you can just move on , what else you can do , the pricing part will definately go up .

  74. vimal vinod singh bhadauria says:

    hi this is the best time to see to this article because i am just going to take term plan .very nice article you posted.
    It will be more better if you provide some comparission between term plans by companey’s because some changes have been made in differnt plans .important thing plz also provide ridders details.
    Thanks keep writing good & valuble articles.

    1. Vimal

      There are few plans to be compared which you can compare on your own as of now .

    2. Vivek K says:


      You can always go to any policy issuing website like policybazar etc and do an online comparison.

  75. pattu says:

    Sorry it should read:

    if two less than 50L normal premium policies are cheaper than a single loaded more than 50L policy (it can be depending on the disease involved) then I can use this method to decide which is best for me. This is a breach of the insurance agreement. Medical tests should be made compulsory for all SA. Otherwise it could be misused this way.

  76. pattu says:

    Some part of the comment got cut. I meant to say:

    If two 50L policy
    (it can be depending on the disease involved) then I can use this method to decide which is best for me. This is a breach of the insurance agreement. Medical tests should be made compulsory for all SA. Otherwise it could be misused this way.

  77. Rajesh s. says:

    Good article on insurance premium..But i have one query..Is it possible to do medical test after purchase of policy???.I have taken policy from icici i care online insurance…So that i will be on safe side…

    1. Rajesh

      Have you taken the policy or still thinking about it ? Because medicals are not done before the plan buying and in case of ICICI icare, there are no medicals !

  78. pattu says:

    Manish, I dont agree with reason 2 in the way you have stated.
    It quite hard for a company to prove that the illness existed at the time of taking the policy without any public acess documentation that existed at that time.
    So if the client doesn’t know, and assuming there is no accessible paperwork even if he did know, then it cannot be proved.

    Consider this:
    I go to company A with the intention of taking 50L+ plan. Medicals reveal illness unknown to me. The loading is unaffordably high. If I want a < 50 L policy from A, they would still load it. If they dont they are dumb!

    So I 'forget' about all this and go to company B and get a <50L policy without tests. Unless I mention about my experience with 'A' it is unlikely that 'B' will ever know about it.

    If two 50L policy
    (it can be depending on the disease involved)
    I can use this method to decide which is best for me. This is a breach of the insurance agreement. Medical tests should be made compulsory for all SA. Otherwise it could be misused this way.

    I think online term plans are based on the ridiculous premise that individuals who go online have a healthier lifestyle than those who buy offline. The present day 20-35 year olds who spend hours before the comp (hence assumed to be predominantly online) for a living are easily the unhealthiest that ever lived in India!

    1. Pattu

      In that case you are agreeing with me, because in point 2 , I also said that one should go for medicals so that there is no confusion. I am not sure how you said that there is breach of rules if you already know about the illness and dont mention , because how do companies prove that I was never aware about my illness. At this point suppose i do medicals of my own by spending my money and come to know I have some serious illness, Now i go to company XYZ and take a less than 50 lacs policy and dont mention about my illness, even if I know .

      now this is exactly what I will do even if I am not aware of my illness, now if they are not taking the medicals , it means they will rely on my info and my info can be right or wrong (depending on what i know) , but they can never go inside my head and prove that i knew thigns or not .

      So thats the reason the premiums are actually higher for less than 50 lacs plans , because then they factor in this issue that people might have some medical issue and then the premium evens out ! . so a person not having any medical illness (whether he knows it or not) pay more than what actual premium should have been and the person having illness pays less than what he should be .

      I am not sure why the medicals are not made compulsory, but the way this whole business is structured I think doing medicals for person who pays premium for 10-20 lacs cover is not going to make them any money in long term.

      Are you now clear on that point , are we on same page now ?


      1. pattu says:

        Manish, I agree with all points in your reply. In my earlier comment I meant I did not agree with this statement “company can prove the point that you had high BP at the time of taking the policy”. In your response you have agreed that in the absence of accessible documentation it is not possible to prove anything.

        Yes Medical should be made compulsory. Then premiums will scale linearly with sum assured.

        Did you see this news:


        I wonder if they would do what AR did, offer a higher cover for the same premium for existing policy holders!

        1. Pattu

          I am not sure if LIC will really do it , but being “LIC” they should 🙂


      2. Rajesh says:

        ‘but they can never go inside my head and prove that i knew thigns or not .’

        Manish, insurance companies can find out in following ways-

        1. From the records of the person’s city hospital where one might have been treated/diagnosed with something in past. The insurer may take no time to develop a rapport with your doctor /hospital if need be 🙂

        2. From the person’s family physician.

        3. If the person had health insurance (independently or through his employer), he might have files reimbursement claims for past illnesses / diagnostic expenses. Usually, the reimbursement claims will have diagnostic reports enclose to it. Getting the same from the employer’s HR deptt or the concerned health-insurance company would be no big deal.

        1. Rajesh

          Dont agree with your point 1 .

          1. What if I am in PUne , but I go to Jamshedpur and get my checkups done on wrong name for myself ! .. So now I am aware of my illness, but then when i fill up the form , I dont mention anything and I say – “I am not aware!” .

          2. How will you find out from family physician ? What if my family physician didnt knew that I know !

          3. Yea in this case its possible , but its just a case !


  79. alpesh pancholi says:

    hi manish very informative article once again!!!
    i was in process of taking term insurance of approx 60 lacs divided in two co.
    i have already term insurance of 15lacs from sbi life-saral shield.
    thanx for the wonderful information once again.
    now i will be looking for more than 50lacs from 1 particular co.

    1. Good to hear that Alpesh !

  80. Purvesh says:

    Hello Manish,

    This answers my one of the query that i posted on other blog. However i talked to HDFC life about “in which condition they will force me to go for medical test”, They say it will be decided by a team after you fill the form, pay and buy the policy. So i am not sure whether they will force me to do medical test after buying term plan. Do you think if i buy policy of say 80Lacs they will tell me go for medical test before giving policy clearance? If you have asked any HDFC officials about it let us know.


    1. Purvesh

      There is no predefined condition that you will be asked for medicals, but as I said ,most of the policies ask you for medicals if sum assured is high (50+) , I think you are over thinking on this issue now , its just delaying your decision , go for it !

  81. Rajesh says:

    Manish could you please make a page in Jagoinvestor inviting people to share their death cliam settlement experince (actually it should be….inviting the insured’s family to share their …experince).

    This will greatly help others to anticipated problems /procedures and precautions to be taken like-
    Providing correct info while taking the policy. What is the implication of leaving any grey areas whiling filling form etc. You can ask the people to share their experince on follwoing points such as-
    i)Documents asked by the isurance company. Did non-availibity of any document casued problem?
    ii) Did insurance Co. raise any dispute about info declared by the insured at the time of buying policy?
    iii) General attitude of Co.- whether co-operative of fault-finding?
    iv) Time taken for settlement.
    vi) In case of early claims, was the company’s attitude unfreindly? What investigations were done?
    v) Any suggestions for others.
    The name of Isurance co. may also be shared (if you feel appropriate).

    First I thought of placing a question in the forum, but I think a seperate page will get the required attention and get a useful number of responses.

    1. These is a good idea, I will try to write an aritcle on this soon !


  82. SKanzariya says:

    Good article.
    I just started reading your book “Jago Investor” and it really justifies the title. I just waken up for Term insurance and will buy appropriate. Now, reading Get-Set-Goal and will take action for it. Thanks Manish.
    Keep sharing such valuables. Now, I am reading each blog of jago investor.

    1. Good to hear that SKanzariya 🙂

      Thanks for acknowledging the useful ness of the book , Would really love to see your full feedback on flipkart 🙂

      1. SKanzariya says:

        Certainly will do once complete it.

  83. Suresh K Narula says:

    hi manish

    Good stuff, Is discount of premium above 50 lacs applicable to all insurance companies or you have talked about specific company.

    1. Suresh

      Its almost with all the ONLINE term plans ,if you go to the premium calculators of those websites, you can see the premium amount going down after 50 lacs . This will not be true for most of the OFFline term plan .

      1. Ram says:

        For LIC (offline) … term insurance prem goes down after 25lacs. 24lac’s prem >32lac’s.

        1. Ram

          Ohh is it, I thought it will not be in case of LIC term plan offline, this is really good news !

  84. Virendra says:

    Hi Manish,

    Which online term plan is the best ? The premium is almost same but the concern is of settlement. Which company is good at settlement? Any update about LIC’s online term plan launch?

    1. Virendra

      Wrong question. Best plan is the one you trust , one plan can not work for all , LIC term plan is ready , but mostly will come only after tax season !

  85. Vivek K says:

    Thanks Manish and Sourav for this wonderful article. The article is really helpful.

    It makes complete sense to go for a medical test to reduce any chance of claim getting rejected. And by taking insurance of more than 50 lakhs you can transfer the burden of medical exam fee to the insurance company itself.

    1. Yea Vivek .. Which one are you going for ?

      1. Vivek K says:

        I am looking at HDFC and Kotak but haven’t got any response from them when I emailed them asking some questions on their online term plans. The start has been disappointing so waiting for LIC’s online term plan launch.

        1. Vivek

          Ok , where did you ask them those questions ? Leaving it on website wont work beautifully , just enquire on justdial about some agent from that company and you will get hell lots of calls 🙂 , try customer care !

          1. Vivek K says:

            Thanks Manish for the advise. I called their customer care number and got the response but I wanted to have them in writing to keep it as an evidence for future.
            I emailed them on their customer care email ids provided on their website. Kotak didn’t bother to reply and HDFC guy replied back saying “sorry we are unable to provide you the details”. I was quite surprised with such response from HDFC.

            1. Dominic says:

              It is very difficult to get certain things in writing. Things also changes constantly. Get a policy and go through the policy document and then if you are not accepting any terms then return it within 15 days.

            2. Vivek K says:

              Hmmm I think that’s the only way to go about it. Would you know if premium is returned 100% or something is deducted if policy is returned within 15 days.

            3. Rajesh says:

              Approx. 30% (may vary from company to company) is non-refundable upon surrendering the policy in look-out period.

            4. Rajesh

              I am hearing that for the first time, which company has that rule ?

            5. Rajesh says:

              Once my colleague uttered this about I-Protect when he took the policy but later developed lack of trust on this ‘No medical’policy. However, I just looked into my own iprotect policy carefully. They say its only the stamp duty which is non-refundable, and it definitely be much less than 30%, may be not even 1%.

              So here I stand corrected 🙂

            6. Dominic says:

              They will return full amount. This information you can get it writing from the agent. Rarely they deduct medical charges or documentation charges. I never heard of 30%.

            7. Hi Vivek,
              If the policy is returned within 15 days (free look period) then the insurance company can deduct the following as per IRDA rules:
              a) Medical examination expenses
              b) Cost of covering the risk for the short period during which cover was provided (This is basically the insurance charge for those few days during which the policy was active) and
              c) Stamp duty

              While insurance companies are legally allowed to deduct the above charges, the insurance company may as a goodwill gesture refund the entire premium amount even though it is not binding on them to do so.

              Best Regards
              Gopal Gidwani

            8. Vivek K says:

              Thanks Gopal for clarifying the points in detail, appreciate your response.

            9. kc says:

              i got money back , just rs 50 deducted out of 10000/- ,but there was no medic check-up.

            10. KC

              It must have been cut because of the small time you were insured!

            11. Vivek

              What exactly did you ask ? Because they cant provide all the info on mail unless you are their customer, did you get the answer to same thing from LIC ?

            12. Vivek K says:

              I think I asked very generic questions. Here they are: –

              1. Is there ANY kind of death that is exempted under this scheme: deaths under riots, terrorist attacks are covered?

              2. In case a person is travelling overseas and dies in a plane crash or dies on foreign soil after landing? Are these kinds of death covered?

              3. What are the documents that need to be submitted with the application form? And where to submit the documents?

              4. Is there any medical check-up required?

              5. What happens if a person dies between the time of submitting the application and issue of policy?

              6. What is the process of claiming the insurance? What are the documents required? Any difference in the claim process if policy is bought online or offline?

              7. Please mail me the fine print of policy wordings. I have already seen the brochure online but it gives very high level information.

              I didn’t check with LIC as I am interested and waiting for their online term plan. I know terms and conditions wouldn’t differ but I thought when they launch a new product they would be keen to provide information to get customers.

            13. Vivek

              1. SOme companies do not cover terrorists attacks , but they do mention that , rest all type of deaths are covered . Also note that deaths happening because of any illegal activity might not be covered.

              2. Yes , that will be covered. Death out side India is covered

              3. Nothing like that is required, agent will be there with you,so you dont need to go anywhere

              4. For policies of more than 50 lacs , most probably its there

              5. Obviously its not covered, when the policy is not issued at all , then how can that be covered, what if was due for rejection, but some policies (online) start covering you from the time of premium payment, but its not a big deal

              6. No difference in online and offline , the claim process is standard and outside the scope of this discussion

              7. How can we sent it to you , it can be given to you by company only


            14. Vivek K says:

              Thanks Manish for answering my questions.

              Regarding point #7, I wasn’t expecting you to send the policy wordings. These are the questions I sent to Kotak and HDFC inquiring about their online term plans, just pasted them here.

  86. Saumya says:

    Will someone from insurance company reply:

    For an individual, female aged 24, non smoker, no alcohol, 6 lakhs
    1. What are the tests (please mention all the test) that one has to undergo for taking an insurance term plan of over 50 lakhs.
    2. Family history


    1. Saumya

      1) THe medical tests will be basic and will range from blood tests and anything which can detect if your overall health is fine or not .

      2) Your family history has to be disclosed by you yourself, things like what health issues your parents have , incase they are not around , how did they die , due to which disease !


  87. TS Ashok says:

    I have taken a term policy with 50L. I took medical tests. My brother took a term for 25L in bajaj. For that too, he took medical tests..I thought if SA > 20L, we should take medical tests. Am I wrong??

    1. TS Ashok

      Some companies might have medicals even below 50 lacs , It all depends on their underwriting team !

  88. Rajesh says:

    Manish please advise me on this-
    Currently I am adequately covered with two term policies( One LIC and one pvt. insurer).
    However, the LIC policy has comparatively high premium and hence I plan to replace it with LIC on-line termplan.

    I have been reading foreever that LIC On-line plan will come soon.

    I prefer a combo of 1 LIC policy and 1 pvt. insurer but lately have been thinking if the LIC online plan will ever come or not.

    Do you think will it ever come or be shelved ?(given the pre-dominantly agent based nature of business LIC has).

    1. Rajesh

      LIC term plan product is ready . Just that its not launching , not sure why ! . But you can expect it after this tax season 🙂 , because otherwise it will effect the business ! . SO wait for it !

      1. Kshitij says:

        I was told it will be launched sometime “after” Sep 2012. I too am waiting for that plan.

        1. Kshitij

          WHo told you that ?

  89. Avinash says:

    What if at one point of time if a customer buys insurance with medicals done well and later he involves with things like smoking and drinking ( business compulsions sometimes ), then how do you look at this, and what is to be done.
    OR if for particular period you are involved and later you quit completely with your regular medical reports as OK,
    In case of a person dies do the blood report shows sign of alcohol and smoking habits ?
    please comment

    1. Avinash

      Dont worry on that .. medical tests also tell till when the guys has started smoking, so if that started after taking the plan, there should not be any issue !

      1. Sachin says:

        Yes Avinash, what Manish says is correct.

        There is test called ‘cotinin’ test which is done on urine sample. I do not know its interpretation or number of cigarettes smoked for a positive test. But better not to take the risk.
        If you start smoking and drinking (occasional/habitual), start a new policy with inclusion of these facts, then discontinue the old policy.

        By the way, never smoke or drink for business or any other compulsions. If you are going to do it anyway, you might as well enjoy it (oops! was that politically incorrect?)


  90. Gnana Reuben says:

    Great information.

    Thanks & Warm Regards


  91. Hari Prasad says:

    Helpful article. As mahesh said it would be great if you can republish term plan comparision article with latest numbers. Thank you.

    1. Hari

      Would do that some time soon !

  92. Rajesh says:

    Appreciate your choosing this topic and providing useful info.

    One point here- Though it makes sense to opt for a cover of more than 60L (paying a lower premium than that for a cover of 40L), one should be prepared to see his premium loaded based on medical test results. If so happens, it is better to accept a higher (loaded) premium than leave a scope for dispute at the time of claim.

    1. Rajesh

      Good point , but I think that scenario is better than not having medicals at all ..

  93. Sachin says:

    hi manish

    i second mahesh’s request
    Will it be possible to re-post your blog “term-insurance-plans-comparisions-india”, last posted in 2010/12, with latest figures and comparison?


    1. Sachin

      Will do that soon

  94. Saurav Sinha says:

    Hi Manish,
    Gud article to start the day with. I would rather take 1 TI as I prefer undergoing tests & fill proposal form myself, leaving no loopholes for insurance companies to exploit wen I won’t be around.

  95. Aparna says:

    Hi Manish,

    Before buying a term plan, should we not find out how much of insurance cover would Ineed. I agree with this article if the term insurance cover for an individual is above 50 lakhs.


    1. Aparna

      Definately you should , but the only thing is how many people you know out of 100 who really need just 10 or 20 lacs of cover ? NOt much , they surely need more than 50 lacs in most of the cases .


      1. Anjan says:

        I certainly don’t agree with this view. Yes, more is always better but we have to draw the line somewhere.

        Even if a person is the single breadwinner in the family, he can’t be expected to carry such a heavy burden where he has to earn enough to support everyone in the family during his lifetime and also ensure that after his death his family will be able to sustain themselves without working for the rest of their lives.

        This is like a tug of war game where you have 5 person on one side pulling against one person on the other side. This is too much.

        I am of the view that adequate term cover should be taken so as to enable the survivors to acquire whatever skill they need within the next 2-3 years to earn their own living in the big bad world out there.

        1. Yes Anjan

          Ideally that only should be done . But what is assume there is wife, who cant work , and you have little children aged yr 1 and 2 . In that case what do you do ?

          1. Anjan says:

            There is no excuse for “wife who cant work”. We are not living in a fantasy world but the real world and its indeed a harsh place to live in. Nobody has a born right to a living without ever having to work a day in his or her life. We all have to earn our living because as the saying goes, there is no free lunch in this world. So if necessary, even the housewife has to learn to acquire necessary skills to work and survive.

            While the husband is alive and is able to provide for the family, its acceptable if the wife doesn’t work, provided its ok with the husband. But I don’t believe a man should be expected to ensure a lifetime of income for his dependents even after his death. Isn’t he already breaking his back trying to single handedly provide for so many dependents? Is it right to expect more from such a person?

            1. I am not saying that Anjan, What I am saying is that what if wife dont have potential to earn so much which the family requires. Let me give you example

              Lets say a person in Pune is married to a lady who is not qualified enough to earn a salary like 60-70k per month which her husband is earning .Lets say that they have 2 kids and old parents. Incase the main breadwinner dies, the only person who has potential to do some work is Wife (parents are old enough and kids are small) , Now in this situation, what is better ?

              To spend 10k a year and take a sufficient cover for family which will help them support themselves for next X number of years ? Where X can be 10 / 20 / 30 .

              Or the person should not take the term plan and assume that after him, someone will take care of family.

              Also, I am not saying there is expectation from man to do this. Taking a term plan for your family is breadwinner choice. No family expects it from the breadwinner. Its a question if breadwinner wants to do this for his family or not.

              Its a very personal choice which only breadwinner has to decide . I am not sure why are you saying “is it right to expect” ? Who is expecting ?


            2. Anjan says:

              I agree, its purely the breadwinner’s choice. The only reason why I said “is it right to expect?” is because on many occasions I have seen you/others reply to people with something along the lines of “Do you think X lacs of cover is enough for your dependents?” A person proclaiming that he has 50 lacs of cover (most probably in some other article) also got a similar reply.

              It very much seems like an expectation is being placed on us to get a huge term cover. I just don’t think its fair. We should leave it upto the individual to decide how much he considers it as enough.

              As for your example of man earning 60-70k per month, I would say its all about adapting to situation. After the man dies, his dependents should learn to lower their expenditure and curb their lavish lifestyle as much as possible. Nobody needs 60-70k per month just to survive. Its possible to live on 10-15k a month for a family even today. I come from a very modest family with meager earnings, so I know what I’m talking about.

              If the man’s dependents want to get back to living the way they did while he was alive, the onus is on them to acquire the necessary skills and work for it. All I saying is that a breadwinner’s job ends with ensuring his dependents won’t have to hit the streets or beg for money after his death. He shouldn’t be expected to ensure that lifestyle can be maintained at the same level while he was alive, even after his death. Hopefully you can understand 🙂

            3. Yes Anjan

              Agree to your main point . But when you say that ” a breadwinner’s job ends with ensuring his dependents won’t have to hit the streets or beg for money after his death” , Its only your version on how it should be, its only how you think. Not many thing like this. I have seen enough people here who feel that their family should not be compromising on their life style and they want them to live comfortably later too with higher resources. So its obviously a person choice. Whatever one thinks is correct should be their cover. And at the end, this is just a blog where we discuss things . One cant create expectation here 🙂 . When I ask “Do you think X lacs of cover is enough for your dependents ?” ,its a question at the end, and the answer can come from other end that “Yes- its good enough to lead a normal life” or “No, I think it should be a bit higher” .

              I got your point on a higher note but, so your are correct in that sense . It was a good discussion I would say ..

  96. mahesh says:

    Hi Manish,
    Thanks for one more informative and helpful article.
    I am thinking of planning to buy term insurance in next few days. Will it be possible to re-post your blog “term-insurance-plans-comparisions-india”, last posted in 2010/12, with latest figures and comparison?


    1. sanoj sonkar says:

      Hi Manish,
      I am agree with Mahesh Could you pls post a new updated article for best offline term insurance plan. i dont want to go for online term plan.

    2. Mahesh

      Will try to do that soon .. wait for it

      1. mahesh says:

        gr8….thank you very much …… 🙂

        1. Sachin says:

          Hi Manish,

          I also want to know comparison for current term insurance plan with figures like settlement ratio, premium term and your opinion on that.

          I am also waiting for LICs online term insurance.

          Thanks in Advance.

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