Term Insurance Plans in India – What is it? What is the difference in premium for term insurance plans in India? What is Online & Offline Term Plan? There is a lot of discussion happening in the media now regarding Term Insurance Plans.
Term Insurance – What is it?
It is the simplest and the most cost effective form of Life Insurance. In this policy, the insurance amount is payable to the nominee only in case of death of the policy holder within the duration of the policy.
Mr. X is aged 35 now and is taking a Term Policy for 25 years. The premium for a Rs. 1 Crore policy with LIC of India will be Rs. 39,700 under the Amulya Jeevan Policy. Aegon Religare and Bharti AXA are charging only Rs. 9,500 per year for such a cover in their Online Term Plans.
Let us see the benefits in this policy. There is only one benefit in this policy and that is death benefit. In case of unfortunate death of Mr. X within these 25 years, his nominee will get the insurance amount of Rs. 1 Crore! But fortunately, if he survives the 25-year period, there will not be any payout from this policy!
Then who will take such policy? This is the common question which comes to your mind. That is why; all agents are busy selling Endowment and ULIP policies. Such policies are offering maturity benefits too. But these are costly policies and offer 5-6% returns only.
Online Term Plan
These are Term policies, which you can buy online. In such policies, the insurance company is not paying commission to agents thereby saving a lot of other cost. Such savings in cost is passed on to the policy holders by offering lower premium rates.
Why premiums are less in Online Term policies?
One reason for the reduced premium in Online Term Plan is the savings in agency commission and other administrative expenses of the company. There is another important reason. Those who apply for online policy are the young and educated people, where mortality rates are less compared to the general public. They can afford and have access to better medical facilities also. So, it makes sense for the insurance company to offer the policy at a reduced rate.
Term Insurance Plans in India – Online and Offline Rates
The following table gives the details of popular Term Insurance Plans in India – Online and Offline. The premium quoted is the annual premium for a 35-year healthy non- smoker male for a Rs. 1 Crore policy which will cover him till age 60. The premium is exclusive of service tax. The premium is indicative in nature and for the actual premium; you may refer to the website of the respective companies.
Term Insurance Plans in India – Precautions
The Life Insurance company is offering the life cover to you based on the information given by you in the Proposal Form and also based on the Medical Test conducted at the time of taking the policy. It is expected that you read each questions in the Proposal Form carefully and answer it with the correct information. Any misrepresentation can lead to the rejection of claims in future. So, please mention all health-related issues, medication, habits like drinking/smoking while taking the policy. You may need to pay extra premium over and above the basis premium quoted in the table as per your health condition. But this will ensure that the claims will be smooth.
So, why are you waiting? Now you know the premium rates for term insurance plans in India,Go for that Term Policy and ensure a decent amount for your family, in your absence.