Recommend term plan.

POSTED BY Nitin Dhawan ON August 16, 2012 6:41 pm COMMENTS (10)

Hi,

I have been looking for child plan for my 1 year old kid and while searching I found the article on JagoInverstor about Term Plan+PPF vs child plan. It was an eye opener and the same moment I decided to make my LIC policies paid up and go by this article.

I have 6 such policies.. that gives me a cover of 13 Lac on a premium of 72K in total yearly. There are policies of 2Lac and 1 Lac that are 2.5 years old, one half yearly premium is remaining and rest of the policies are more than 3 years. What I am thinking is, make all the policies as paid up which are more than 3 years immediately. I am not planning to surrender them and wait till maturity to get whatever I get in return.

(1) What is your thought? The two polices which are 2.5 years have one half yearly premium remaining which is 8200 in October. I am thinking of paying that premium and make it paid up. Just let it go and then wait till maturity as all of other policies.

(2)Suggestion? As per the article, Term Plan+PPF vs child plan, which I liked and going that way, I am in talks with PolicyBazaar and EasyPolicy about the term plan. While policybazaar is recommending Aviva and easypolicy is Aegon’s iTerm. I am a bit confused in this. I am looking for 50L plan (may be divided in 25+25 for two plans of different companies) with Accidental rider and Critical illness. IndiaFirst’s Anytime plan also seems good.

(3) Which one/two do you suggest based on claim settlement etc?

(4) Is taking term plan with help of policybazaar/easypoilcy representative is fine or I should just take from the company’s site itself?

Thanks,
Nitin

10 replies on this article “Recommend term plan.”

  1. Nitin Dhawan says:

    Dear Ashal,

    ok, I got your point but I am sorry I don’t know this detail. What I am missing?
    You mean these term insurers are somewhere linked in the background for the purpose of claim settlement?

    thanks,
    Nitin

    1. Dear Nitin, Let me clarify. Most of the time, people are under impression that online plans ‘ll not honor claim at the time of need. Also LIC being the oldest one, ‘ll honor claim. Although it’s a myth but still the comfort of the policy holder is important. Hence I asked you to purchase normal full amount cover with any pvt. insurer of your choice & go for 5L small cover with LIC. In case the claim happens, as per myth, LIC ‘ll honor that small claim & on the basis of that claim settlement, other insurer ‘ll also provide the claim.

      Personally I do not have any term plan from LIC. I have done proper declaration for my health, job profile…. to my insurer (Aviva) & the prem. was increased & now I’m happy that insurer has covered my life knowingly that I carry a higher risk. So in case of claim, no flimsy grounds can be used by insurer to deny the claim.

      Thanks

      Ashal

      1. Informed Investor says:

        I totally agree with Anshal.
        Term plans from private insurers are as safe as LIC the only thing to keep in is be honest while you apply for a policy online or offline.

      2. Nitin Dhawan says:

        Hi Ashal, LIC Amulya Jeevan seems to have minimum SA as 25L.

        I am going for AR 40L till 75years and HDFC 30L 30years. Is that right?

        1. Dear Nitin, in case of LIC the smaller cover is named Anmol Jeevan. Please check the same. Regarding this split of 40+30L, I w’d like to have a single policy of 70L Rs. with any of the insurer mentioned by you. The relative prem. ‘ll be cheaper than what you ‘ll pay in the split.

          Thanks

          Ashal

  2. Nitin Dhawan says:

    Dear Ashal,

    Do you mean 50L policy from LIC?

    thanks,
    Nitin

    1. Dear Nitin, please purchase the large cover from AR or any other insurer of your choice of say 75L or 1C. For that claim settlement thing, I’m asking to purchase a very small cover of 5L Rs. only from LIC.

      Thanks

      Ashal

  3. Nitin Dhawan says:

    ok, so I need suggestion on online vs offline term plan. Any pros cons?
    LIC is not an option now, unfortunately…

    I am closing on AR-iTerm as one policy. I need sugegstion on another one-
    1. HDFC Life click to protect
    2. India First Anytime plan
    3. Max Aviva

    What I am finding is, HDFC Life is better as second option.

    I am planning to finish that on 23rd. Quick suggestion might help me to take right decision.

    thanks,
    Nitin

    1. Dear Nitin, my personal take ‘ll be to go for a 15 multiple of your yly income as the sum assured of your term plan. If it’s 50L Rs. so be it. If it’s 75L Rs. again it’s ok & if more than 1C, then go for that.

      My take ‘ll be to go for a single plan from AR’s I-Term of 50-75-100L as the case may be. If you are in doubt for the claim settlement later on, please purchase 5L Rs. Anmol Jeevan from LIC for this claim settlement thing.

      Thanks

      Ashal

  4. BanyanFA says:

    Hi Nitin,
    Child plans are the same evil as tradional endowment plans which you are in the process of cancelling. While going with a term insurance, the fix is to choose between an online term plan vs offline. I am some how not able to convince myself to choose an online term plan as it provides less opportunity to give disclosures and chances of the claim being rejected in future gets enhanced. As a result, I have an inclination to go towards offline providers. LIC tends to be the market leader and tends to be most expensive. Another one which I find quite attractive is SBI Life which is a good blend of pricing and a reputable brand.

    I would be really interested to hear from other boarders on their views.

    Regards
    BanyanFA

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