POSTED BY April 13, 2012 7:12 pm COMMENTS (11)ON
I am Vivek.
Recently I had an argument with a friend of mine regarding buying Insurance Policy from Private Companies.
Unfortunately I have missed to read the Manish’s article about the same.
I have opened up this topic again, just to know what is your opinion about buying Insurance Policy from Private Companies (After reading the above article)
How many of you still feel buying Insurance policy from private sector is a risk?
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11 replies on this article “How safe it is to buy Term Insurance from private companies?”
Are you talking about settlement or sustainability of the companies themselves?
If LIC rejects 1% claim it runs into several lacs claims really. While % settlement to look at it is incorrect to compare somene having a LAAAAARGE market share versus the new entrants.
Sustainability – In a closely regulated country like ours it is highly likely someone will go kaput due to the reserves they need to maintain. Even if it happens so IRDA/Govt will intervene and we have our regular scapegoat LIC forced to take over all policies of that sick company perhaps at a higher premium. So I dont really fear on the sustainability angle.
I am talking about settlement ration. Because private sectors compared to public sectors do not have good settlement ratio.
So people still go with LIC though high premium.
The point here is, are there good private sectors whom people can opt other than LIC so people can get good life cover at a coparatively lesser permium.
Settlement Rate in case of companies that have recently entered market are not encouraging. Go with reputation of the company. LIC undoubtedly is good. HDFC is another one that has decent settlement rate.
Go with somebody who is in market since ages.
Settlement rates of term policies are different from endowment policies, while SR for online term and offline term will also be different. Till that clarity / detail is there, it is actually wrong to base your decision on such statistics.
HDFC is still better, but their online term experience is almost zero. Plus, their associated partners get changed, which is not a good thing regarding stability.
You are right. The reason to open this topic was to ” Identify a private sector company” other LIC which is safe and provides the Term Plans at a reasonable premium compared to LIC.
I have nothing against LIC, but why one should pay two or 3 times more premium for the same life cover when the other private sector company is equally good.
what makes you think its no applicable to PSU?
Risk is there with every company.
As i mentioned, question was to identify the private company that is equally or close to safe as LIC from where people can get better life cover at a better premium.
Dear Vivek, may I know which side you are standing to? Pro Pvt. insurer or against Pvt. Insurer as this thing is absent from your query.
I am neither side. I have one policy from Bharati-Axa and One from SBI-Life.
I just wanted to know what others feel when it comes to buying Term Insurance Policies from Pvt players.
Dear Vivek, first of all let me clear that SBI Life is not in the same league as LIC is. LIC has backing (read sovereign guarantee) from Govt. of India but SBI is not that much lucky or should I say policy holders of SBI Life. 🙂 🙂
Personally I’m comfortable with the pvt. insurers after declaring all the facts to my life, health, family history, job profile with utmost honesty & getting a term plan of my choice. If you are following me, you are well aware that I recently purchased a term cover from Aviva & the prem. of the same was loaded up by 3.5 times But I accepted the same happily & now I’m covered by Aviva. Interestingly the prem. of Aviva after this 3.5 times hike is still way below what I w’d have paid in LIC’s Amulya Jeevan.
This was one of the reason why I went for SBI and Bharati-Axa. Does not matter even if SBI does not have backup.
As long as the declarations are correct, I hope there should be no problem.
Thanks for the quick reply.