Dear Jagoinvestor Team,

I have a query regarding term insurance plan. I am 25 years old, non smoker and I am planning to buy a pure term insurance plan. I have read your various articles on term insurance plan and I appreciate your efforts in listing the points to remember before purchasing any term insurance plan. Based on your suggestions, I shortlisted 4 insurance plans based on my financial needs and future liabilities like home loan, children’s education, dependants requirements etc:

1. HDFC Click2Protect
2. ICICI icare
3. SBI shield
4. LIC Jeevan amulya 2(a new plan introduced in feb 2014)

The first 3 plans have competitive premiums while LIC plans have higher since they offer only offline plans through agents only. But LIC has highest CSR even after receiving huge number of claims(around 50 times the number of claims received by other insurance companies). Is the CSR for LIC entirely based on term insurance? If it is not then do you have any idea what is the CSR of LIC for pure term insurance plans only because they used to sell lot of useless products like endowment plan, money back plans, etc which definitely gets settled. Rest have almost same CSR with 1-2% difference and it can vary based on their current fiscal year performance. The more I do the research, the more I get confused. I also don’t have any friend/ relative who has life cover. Most of them are investing in money back or endowment plans which are useless.

My parents have high faith in LIC and I will definitely select its term insurance plan if I couldn’t find good reasons to select from the other insurance companies. I am ready to bear high premiums because the main objective should be to choose a plan which can be settled smoothly in case of untimely death and my dependants won’t have to run from pillar to post to settle the claim. I am also planning to go through the medical test even if not required as to certain that no fact is hidden while purchasing the insurance.

In my opinion, I trust LIC and SBI as both are govt bodies. Even if the the SBI insurance is a private organization backed by SBI then in case of any financial instability the govt can take care of the unsettled claims with these organizations. I know that all insurance companies are governed by IRDA norms and they should have enough money to pay the claims before selling any plan but I always have less faith in private insurance companies. I might be wrong. Could you please suggest me which one of the plans is better and why? Does anyone on this forum have HDFC or ICICI or SBI term insurance plan? How is their customer service and claim settlement process?

I hope I explained my query properly. My apologies if the query is too lengthy but I wanted to explain what I understood based on my analysis.

Thanks in advance.
Regards
Amit Gupta