Closing of Existing LIC policy (7 years old) and taking a 2 new term insurance

POSTED BY vinodmroy ON January 28, 2014 2:26 pm COMMENTS (4)

Need a suggestion on the Term Insurance Plan

I am having Jeevan Anand Policy for which i am paying around 33K per year and don’t know nothing more than this … Recently came to know about the term insurance from friends and lot of information from jagoinvestor. Now thinking cancelling/handing over the existing 7 year old LIC policy and buying 2 term insurance plans of worth 1Cr each .

Why I am thinking like this

Low Premium with max amount and also for better security(financially) to my family in case of my absence .

can u suggest me whether its good option if so can you please help me in finding best term insurance plans in market as i am married and having a kid and wife was home maker .. 

Thanks,

Vinod Roy

4 replies on this article “Closing of Existing LIC policy (7 years old) and taking a 2 new term insurance”

  1. ashalanshu says:

    Dear Vinod, name me the life insurance company which has 100% claim settlement ratio.

    Thanks

    Ashal

  2. akgc2 says:

    Dear Vinod
    I had the same doubt about Aegon when I purchased the policy for myself. This CSR is for overall insurance policies a company has in offer. for Term insurance policy there settlement ratio is more than 90% (33/36).

    Customer service is good, medical is done at home (Depending on you city) and policy documents got delivered in just 5 days.

    However if you want some kind of other riders (Apart from Accidental Death Rider) like critical illness benefits (Where you get certain % of SA in case you are diagnosed with certain critical disease. ) you may look for Bajaj Allianze or any other policy.

  3. akgc2 says:

    Dear Vinod
    First of all congrats that you have decided to buy Term Insurance. Frankly speaking there is no such insurance product in market which can give more than 7% guaranteed annual returns. Still lot of people buy these traditional insurance policies because no Agent tell people about term insurance. The reason they don’t get a good commission of low premium Term Insurance plans.

    “One should never combine the Investment and Insurance. Always keeps these 2 separate.”

    A traditional insurance policy gives life cover upto approx. 25 times of annual premium whereas in Term Insurance you can life cover of up to 1000 times (yes 1000 times) of your annual premium. Only thing you don’t get any maturity benefit here i.e. no returns at maturity but that does not matter since the money saved from the premium of traditional policies can be invested into any better investment instruments which can give higher returns like PPF (Guaranteed 8.5%) and Mutual Funds (10-15% or more depending on market in a long term but not guaranteed)

    All the traditional Insurance Plus Investment policy gives 7% or less returns. ULIPs which are market linked insurance plans does not give a guaranteed return. You may or may not get a good returns at the maturity so don’t ever got for ULIP plans. These plans also charge an high % of administrative charges.

    Now coming back to your question, what is the payment term for your Jeevan Anand Policy. If it is more than 20 Years you have still not paid much and yes you can surrender the policy and the surrender money which you get can be invest in any other product which can give you more than 7% returns.

    About Term Plan you can buy Aegon Religare where you get 1 Cr SA for approx 10K for Age of 34 Yrs and Term of 20 Yrs. This insurance has the least premium in the market.

    Another 1 Cr policy you can buy from other company.

    Do remember that total life cover cannot be more than 20 times of your annual income including all the insurance you have. Hence for 2 Cr life cover your annual income must be more than 10 Lac.

    1. vinodmroy says:

      Thanks AKgc … Religare was a good option but found out that it had paid only 282( 66.82%) paid out of the total 422 and had a rejection ratio of 33.18% and its very new to market thats what i heard from customer care … I heard from Manish that AVIVA was good …. what should i look for before going for the term policies is the % claims accepted or rider options .. Edelweiss Tokio Life had the best rider and the amount was around 10K for 50L SA and it has paid 10 out of the total 22 claims which comes around 45.45% .

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