Claim Settlement Ratio for Life Insurance Companies for 2010-11

by Gopal Gidwani on February 7, 2012 · 259 comments

in Financial Planning,Insurance,Others,Uncategorized

Claim Settlement Ratio for Life Insurance Companies for 2013-14
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Introduction
Naresh Malhotra is a 30 year old marketing executive. He is on the lookout for a pure term insurance plan for a cover of Rs. 50 lakhs for a period of 20 years. He is in a quandary over which company to select for purchasing a term insurance plan. Term insurance plans are also popularly known as ‘protection plans’. These plans provide risk cover for loss of income, financial liabilities (home loan and other loans), financial responsibilities (children’s education, marriage etc.) against untimely death of the family bread earner.

Naresh has done some research on different term insurance plans available in the market. He is in a dilemma on two fronts.
1) Should I go for lower premium??? Naresh is quite surprised by the amount of variance (difference) in the premium charged for term plans (with same features) by different companies.
On one hand there is LIC’s Amulya Jeevan Term Plan that charges Rs. 12,850 for a 30 year old person for a cover of Rs. 50 lakhs for a term of 20 years.
On the other hand we have Aegon Religare’s iTerm Plan that charges Rs. 4302 for the same 30 year old person for a same cover of Rs. 50 lakhs for a same term of 20 years.
So for a term plan with same features, the premium charged by LIC is a whopping 3 times more than the premium charged by Aegon Religare!!!
2) Should I look at high claim settlement ratio (CSR)??? At the same time Naresh had a look at the Claim Settlement Ratio of life insurance companies for the year 2010-11. LIC with 97.03% CSR is way ahead of Aegon Religare’s 52.31% CSR and the entire life insurance industry.
Claim settlement ratio (CSR) refers to the number of claims settled by the insurance company out of every 100 claim requests received by the company. LIC’s claim settlement ratio for the year 2010-11 was 97.03%, which in simple terms means out of every 100 claims LIC received during the year 2010-11, it paid 97 claims. This does not mean the remaining 3% claims were rejected. Some claims might be still under consideration, some inquiry pending while some may have been rejected for various reasons.

In a term plan, claim settlement ratio is an important indicator of customer service, which needs to be given little more precedence over other aspects, while selecting a term insurance plan. The reason being – it is important to ensure that your beneficiaries do not face much problems in receiving the claim in case of your unfortunate demise.

Low premium Vs. High claim settlement ratio dilemma!!!
While selecting a term plan, Naresh is in a fix whether he should give more importance to the lower premium charged for online term plans by private insurers or give more importance to the high claim settlement ratio maintained by LIC year after year. Naresh is unable to decide. Like Naresh there are lot of other people who are caught between low premium and high claim settlement ratio and are unable to decide whom should they give preference over the other. In this article we try to present a comparison of the claim settlement ratio of insurance companies (for the years 2009-2010 and 2010-2011) along with the premium charged by these companies for their term plans. We sincerely hope that to some extent this article helps people like Naresh and others decide which term plan they should go for.

Please note: When choosing a term plan, while claim settlement ratio and premium charged are two very important aspects, they are not the only ones that matter. Some other equally important aspects that need consideration are the person’s (need) requirement, features of the plan, customer service of the company etc.

In the below table let us look at the comparison of claim settlement ratio for life insurance companies for the year 2009-10 and 2010-11 and the premiums charged by these companies for their term plans.

Insurer

Claim Settlement Ratio 2010-11

Claim Settlement Ratio 2009-10

Term Plan

Premium charged

LIC

97.03

96.54

Amulya Jeevan

12,850**

HDFC Life

95.41

91.14

Click2Protect

5,625

Birla Sunlife

94.66

89.09

Protector Plus

7,721

ICICI Prudential

94.61

90.17

iCare

6,783

ING Vysya

90.49

89.30

ING Term Life

12,265

Kotak Life

89.30

86.97

ePreferred

5,487

Bajaj Allianz

88.69

88.19

New Risk Care II

Bharti AXA

87.17

77.8

iProtect

4302

Metlife

85.43

82.54

MetProtect

5,294

Aviva

84.15

87.11

iLife

4,436**

SBI Life

82.24

83.27

Smart Shield

7956

IndiaFirst

82.01

53.85

AnyTime

6162**

TATA AIG

81.93

78.17

Reliance Life

81.36

89.07

Star Union Daichi

80.69

58.33

MaxNew YorkLife

77.96

65.51

Canara HSBC

71.02

38.71

IDBI Federal

64.92

49.52

Shriram Life

55.69

39.54

Sahara

53.23

63.06

Aegon Religare

52.31

48

iTerm Plan

4302

DLF Pramerica

51.22

40

Future Generali

50.52

38.85

Source: Claim settlement ratio has been taken from IRDA Annual Report 2009-10 and 2010-11. The claim settlement ratio mentioned is the overall claim settlement ratio for the insurance company (all insurance products) and not just for term plans. The premium calculations have been done from the respective insurance company websites.

Please note:
1) The premiums shown in the above table are for a 30 year old male for a sum assured of Rs. 50 lakhs for a term of 20 years.
2) In the above table where only the premium amount is mentioned, it means it is inclusive of service tax
3) Where ** is mentioned next to the premium amount, it means it is not sure whether the premium is inclusive or exclusive of service tax.
4) Interested buyers are requested to recheck these quotes with respective insurance companies before purchasing a term plan. These rates may not be fixed and are subject to change.
5) We are not representing any particular insurance company.

As can be seen from the above table the claim settlement ratio of most life insurance companies has improved in 2010-11 as compared to 2009-10. LIC remains a clear leader in terms of claim settlement ratio with 97.03% for 2010-11 compared to 96.54% for 2009-10. The top three private insurance companies in terms of claim settlement ratio are – HDFC Life (95.41%), Birla Sunlife (94.66%) and ICICI Prudential (94.61%).

There are also some companies for which claim settlement ratio has gone down for 2010-11 as compared to 2009-10 – companies such as Aviva Life Insurance, SBI Life and Reliance Life.

Low Premium: Apart from claim settlement ratio, the amount of premium that needs to be paid for availing insurance cover (sum assured) is also an important consideration for selection of a term insurance plan. There can be significant difference in the premium of different insurance companies for same amount of insurance cover. Apart from offline term plans, lot of insurance companies have also started offering online term insurance plans since last couple of years. Premium for an ‘online term insurance plan’, can be as low as 40-50% as compared to offline term insurance plans due to reduced office and intermediary expenses.

As can be seen from the table above, in terms of premium, LIC has the highest premium and Aegon Religare & Bharti Axa have the lowest premium. The top three term plans in terms of low premium are – iTerm by Aegon Religare, iProtect by Bharti Axa, i-Life by Aviva. All three of them are online term plans.

Our take on the above table
Apart from the above information, in this section we try to give you some pointers which may be helpful to you in making up your mind on which term insurance plan to go for.

1) LIC – Amulya Jeevan: LIC leads in terms of highest claim settlement ratio. Despite charging high premiums LIC continues to have the highest market share and continues to remain the undisputed king.

  • LIC’s Amulya Jeevan comes with a minimum sum assured of Rs. 25 lakhs and maximum tenure of 35 years. For those looking for a sum assured below Rs. 25 lakhs, LIC offers Anmol Jeevan.
  • Last year in September 2011 LIC did make an announcement that they are soon coming out with a cheaper online term insurance plan. But after that there is no update on that news and the wait for a cheaper online term plan from the LIC stable continues.

Conclusion: People who give the highest weightage to claim settlement ratio over everything else can choose to go with LIC.

2) HDFC Life, Birla Sunlife, ICICI Prudential trio
Well, these 3 companies are best placed to offer you a good combination of high claim settlement ratio and low premiums.

a) HDFC Life – Click2Protect: The claim settlement ratio of HDFC Life is second best in the industry at 95.41%.

  • The premium being charged by HDFC Life for Click2Protect is Rs. 5625 which is lower than the premium charged by Birla SunLife (Protector Plus – Rs. 7,721) and ICICI Prudential (iCare – Rs 6783) for a similar plan.
  • The minimum sum assured under Click2Protect is Rs 10 lakhs and maximum is Rs. 10 crores.
  • The maximum policy tenure is 30 years and premium payment mode can be only annual / yearly (no monthly, quarterly, half yearly option offered). There are no riders being offered under this plan.

Conclusion: Somebody who is looking for low premium, high claim settlement ratio, fixed sum assured and no riders; this policy is good. Our Thumbs Up to this product!!!

b) Birla SunLife – Protector Plus: The claim settlement ratio of Birla SunLife is third best in the industry at 94.66%.

  • The premium being charged by Birla SunLife for Protector Plus is Rs. 7721 which is little higher than the premium charged by HDFC Life (Click2Protect – Rs. 5,625) and ICICI Prudential (iCare – Rs 6783) for a similar plan.
  • For people looking for a cover less than Rs 50 lakhs, Birla SunLife offers Protector Plan and for those looking for a cover higher than Rs 50 lakhs, Birla SunLife offers Protector Plus Plan.
  • The policy comes with a maximum tenure of 30 years.
  • The policy allows you to keep your cover constant (level term) throughout the policy or the option to increase sum assured by 5% or 10% every year. The choice has to be specified at the inception of the policy. If the option of increased (5% or 10%) sum assured is chosen the premium will be higher than a level term plan, but this higher premium will stay constant throughout the policy term and not increase every year.
  • The policy also offers a choice of 5 riders to choose from for nominal extra cost. These riders include accidental death and disability rider, critical illness rider, surgical care rider, hospital care rider, waiver of premium rider.

Conclusion: The choice of increasing the sum assured by 5% or 10% a year and the choice of 5 riders make up for a little higher premium being charged in this plan as compared to HDFC Life Click2Protect and ICICI Prudential iCare. Somebody who is looking for high claim settlement ratio, increased sum assured, choice of riders can definitely go for this policy, albeit at a little higher premium compared to similar plans being offered in the market. Our Thumbs Up for this Product!!!

c) ICICI Prudential – iCare: The claim settlement ratio of ICICI Prudential is fourth best in the industry at 94.61%. The premium being charged by ICICI Prudential for iCare is Rs. 6,783 which is little higher than the premium charged by HDFC Life (Click2Protect – Rs. 5,625) and lower than the premium being charged by Birla SunLife (Protector Plus – Rs 7,721) for a similar plan.

  • The policy comes with a maximum tenure of 30 years and a minimum sum assured of Rs. 10 lakhs.
  • The policy comes in 2 variants: only sum assured or sum assured plus accidental death benefit.

Conclusion: When compared with HDFC Click2Protect, the accidental death benefit is the additional feature being offered by ICICI Prudential under iCare. But this additional feature comes at the payment of additional premium. So HDFC Click2Protect will be a better choice to go for in case you are looking for a plain vanilla term plan and not looking for accidental death benefit.

Conclusion for HDFC Life, Birla Sunlife, ICICI Prudential trio
Well as mentioned above, these 3 companies are best placed to offer you a good combination of high claim settlement ratio and low premiums. For someone who is looking for a plain vanilla term plan, HDFC Click2Protect is the one to go for and someone who is looking for Increasing Sum Assured and Rider options, Birla SunLife Protector Plus is the one to go for.

3) ING Life – ING Term Life: ING Vysya has the 5th best claim settlement ratio of 90.49%. In the term plan category it is offering ING Term Life Plan with a premium of Rs. 12,265.

  • The policy comes with a maximum tenure of 30 years.
  • It also offers optional choice of riders: Accidental Death Benefit Rider and Accidental Death, Disability and Dismemberment Benefit. But the riders come for extra premium payment.

Conclusion: The premium of Rs. 12,625 of ING Vysya (CSR 90.49%) is close to LIC’s (CSR 97.03%) premium of Rs. 12,850. So it will make sense for a person to go for LIC rather than ING Vysya.

4) Kotak Life, Bharti AXA, Metlife, Aviva, SBI Life, IndiaFirst Life All these 6 companies have claim settlement ratio ranging from high eighties (Kotak Life – CSR – 89.30%) to low eighties (IndiaFirst Life – CSR – 82.01%). Let us see what they have to offer.

a) Kotak Life – ePreferred Term: Kotak Life’s claim settlement ratio is at the higher end of the eighties at 89.30%.

  • For a cover of above 25 lakhs Kotak offers ePreferred Term Plan and for a cover of below Rs. 25 lakhs Kotak offers eTerm Plan.
  • The premium being charged by Kotak Life is Rs. 5487 which is lower than that of HDFC – Click2Protect (5,625), Birla Sunlife – Protector Plus (7,721) and ICICI Prudential – iCare (6,783).
  • The maximum tenure offered is 30 years.
  • Kotak ePreferred Term offers Step-up and Step-down options. Step up option allows you to increase your insurance cover at certain important stages in life like marriage, purchase of house (maximum increase allowed in sum assured – 50%), child birth, 1st, 3rd and 5th policy anniversary (maximum increase allowed in sum assured – 25%).
  • The step down option allows you to lower your cover.

Conclusion: The low premium, step up & step down options and reasonably high claim settlement ratio are compelling reasons to go for this product. Our Thumbs Up to this product!!!

b) Bharti AXA – iProtect: The claim settlement ratio of Bharti AXA is at 87.17%.

  • The premium being charged for iProtect is Rs. 4302, one of the lowest in the industry.
  • The plan comes with a minimum cover of Rs. 25 lakhs and maximum tenure of 30 years.

Conclusion: Well, if low premium is what you want, then you can go for this. But if you are looking for high claim settlement with slightly higher premiums and plain vanila term cover with no other features, then HDFC Click2Protect fits the bill. If low premium with reasonably high claim settlement ratio and step-up / step-down options is what you are looking for, then Kotak ePreferred plan fits the bill.

c) Metlife – MetProtect: The claim settlement ratio of Metlife is 85.43%.

  • The premium being charged for MetProtect is Rs 5294 which is lower than that charged by HDFC, Birla Sunlife and ICICI Pru.
  • The maximum policy tenure is 35 years and the minimum sum assured is 25 lakhs. It is a plain vanila term plan.

Conclusion: With Metlife (CSR 85.43%) charging Rs. 5294 compared to HDFC (CSR 95.41%) charging Rs. 5,625, I will prefer to go with HDFC who is offering a better CSR by paying Rs 325 extra compared to Metlife. If you are looking for step-up / step down options then by paying Rs 200 extra go for Kotak Life as compared to Metlife.

d) Aviva – iLife: The claim settlement ratio of Aviva is 84.15% for 2010-11 down from 87.11% for 2009-10.

  • The premium being charged for iLife is Rs.4436, which is one of the lowest in the industry.
  • The minimum cover is Rs. 25 lakhs and the maximum policy tenure is 35 years.

Conclusion: While the premium is one of the lowest, the claim settlement ratio (84.15%) is also lower than many other life insurance companies. I feel HDFC Click2Protect or Kotak ePreferred Term will be a better choice to go for.

e) SBI Life – Smart Shield:
The claim settlement ratio of SBI Life is 82.24% which is 11th in the overall ranking of CSR for life insurance companies.

  • SBI Smart Shield comes with a minimum sum assured of Rs. 25 lakhs and maximum tenure of 30 years.
  • It comes with 4 variants: Level cover, increasing cover, decreasing cover (for loans) and family income protection option.
  • In the event of death of the life assured, the family income protection option provides the family a monthly amount for the remaining policy tenure. This monthly amount is calculated as [(SA / Policy Term) * 12].
  • The policy also offers choice of riders: Accidental Death Benefit Rider, Accidental Total and Permanent Disability Rider and Accelerated Critical Illness cover option.

Conclusion: While the features like increasing cover, family income protection option and riders are good, the low claim settlement ratio is not comforting. In comparison Birla Sunlife – Protector Plus will be a better option as it offers similar options and also offers a much higher CSR.

f) IndiaFirst Life – AnyTime Plan: The claim settlement ratio of IndiaFirst Life is 82.01% and the premium being charged for AnyTime Plan is Rs. 6162. The minimum sum assured is Rs. 10 lakhs and maximum sum assured is Rs. 49 Lakhs and the maximum tenure is 30 years.
Conclusion: It is a plain vanila term plan. HDFC Click2Protect will be a better choice in this category as it charges little lower premium but more importantly offers high CSR of 95.41% in comparison to 82.01% CSR of IndiaFirst.

5) Aegon Religare – iTerm: Well, this company deserves a special mention as they were the first ones to introduce a low cost online term plan – iTerm in 2009. It is because of them we see other companies also offering us low cost online term plans. So credit to them for that. Well coming to the analysis part, the CSR of Aegon Religare is 52.31% which is not very comforting.

  • The premium being charged for iTerm is Rs. 4302 which is one of the lowest in the industry.
  • The iTerm Plan offers interesting features. It comes will in-built Terminal Illness Cover at no extra cost. On diagnosis of any terminal illness the company pays 25% of the base sum assured and reduces the base sum assured accordingly.
  • The plan offers a maximum tenure of 57 years, highest among all plans covered in this article. But this high tenure is subject to maximum maturity age of 75 years. So if you take the plan at the age of 25 years, then you can opt for a maximum tenure of 50 years, till the maturity age of 75 years.
  • The website mentions, the plan covers all forms of death including terrorist attacks. Death by suicide within the 1st year of the policy is excluded, which is a standard exclusion in all policies.
  • The plan offers choice of 3 riders: Accidental Death Rider, Waiver of Premium on Critical Illness Rider and Women Critical Illness Rider.

Conclusion: Well the features like inbuilt terminal illness cover, maximum tenure of 57 years, choice of 3 riders and offcourse one of the lowest premiums in the industry are very interesting, the low CSR of 52.31% is a dampener.

Overall Conclusion:
Our overall conclusion is
1) If someone is looking for high CSR, low premium, plain vanilla term plan without any distinct features, then HDFC – Click2Protect stands out in this category.
2) If someone is looking for high CSR, low premium, increased sum assured options, riders, then Birla SunLife – Protector Plus (includes riders) and Kotak Life – ePreferred Term (without riders) stand out in this category.
3) If someone’s need is for some specific feature, then a term plan can be looked for accordingly with that feature.

Important Tip: The proposer / applicant at the time of purchasing a term insurance plan or any other insurance plan from any life insurance company, should ensure they provide complete and correct information relating to all material facts. This will ensure that there are no problems at the time of claim settlement.

Finally we sincerely hope your search for a term plan and the dilemma of striking a fine balance between high claim settlement ratio and lower premium gets resolved to a certain extent with this article. We would love to hear from you on this or any other query!!!
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For any comments please comment in the section below or email us at gopal_gidwani@yahoo.com

{ 257 comments… read them below or add one }

Ram February 9, 2012 at 10:49 am

Hi,

Could you please advice me on my requirement for term plan..
I want to go for a cover of 1 crore.

Which option is better?
1) Go with one company for 1crore?
2) Go with two companies each for 50 lakhs?

Thanks,
Ram.

Reply

Gopal Gidwani February 9, 2012 at 11:33 am

Hello Mr. Ram,

You can break up your insurance requirement with 2 companies. The reason being, if company pays the claim and the second does not pay the claim for any specific reason then you can ask the second company to pay on the basis of the 1st company.

You can go with 70 lakhs with Click2Protect from HDFC Life. For the remaining 30 lakhs you can go for Protector Plus from Birla Sunlife or ePreferred Term from Kotak Life. Both offer you the option to increase your sum assured. Protector Plus offers you the option to increase the sum assured by 5% or 10% every year and ePreferred Term offers you to increase the sum assured at certain important events like buying a new house, marriage, child birth, 3rd and 5th policy anniversary etc. and at a later stage of life when your financial liabilities and financial responsibilities have reduced you can even reduce the cover.

Reply

prasad April 26, 2012 at 5:40 am

we should always hope for the best and plan for the worst..

for the suggestion you made, consider a case when the 1st company rejects your claim. 2nd company will also tend to reject the claim . So there is a risk factor in both the ways….either for single plan or splitting into 2 plans

Reply

Gopal Gidwani April 26, 2012 at 7:35 am

Hello Prasad,

If one company rejects the claim, it is not necessary the 2nd company will also reject the claim. Companies have to give a proper valid reason for rejecting a claim. And a reason for rejection by the second company cant be “because the 1st company has rejected the claim, we are also rejecting the claim”.

Reply

Atul July 16, 2012 at 12:34 pm

Thanks Gopal,
Could you please provide some insight on different reasons stated by life insurance companies to reject the claims.
Regards,

Atul

satyam tripathi July 18, 2012 at 7:18 am

Hello Gopal,
Your article is really very informative.
But i want your suggestion that i was enquring about click to protect plan for coverage for 30 years and for 1 crore.
I got information regarding premium charged annualy online is very different than what they told on phone.
so what should i do?

Amar January 7, 2013 at 4:17 am

Mr. Ram requires life insurance for his father aged 59 years and not for himself.
His reason for taking insurance from more than 1 insurance cos are 1) restriction of sum assured offered by LIC under their two policies, which are taken on the life of his father and 2) personal reasons.

Now sum assured offered by any insurance co depends upon 2.Age of the person and 1 . Earning of the persons.
If he hides this fact from other insurance co that he has already taken two policies from LIC, this will go against him at he time of settlement of claim.
I can not comment on his personal reason/ s and hope they are not to for hiding any material fact from insurance co.- which will be breach of utmost good faith and may against him, even after the policy is issued.

Reply

SUJIT KUMAR PANDEY January 12, 2013 at 3:58 pm

YOU GO ONLY WITH BIRLA SUN LIFE

Reply

Hitesh February 13, 2012 at 12:04 pm

Dear Gopal,

A very informative article shared by you. This information shall make the process of selecting a term plan, simple.

Regards,

Hitesh

Reply

Gopal Gidwani February 13, 2012 at 1:15 pm

Hello Hitesh,

Good to know the article was useful to you. Please share it with friends and colleagues so that they can also benefit from it!!!

Reply

dhdh April 21, 2013 at 6:02 am

hi.. sir i want infomation about death clame of bhartiaxa term policy

Reply

Amey January 27, 2013 at 2:57 pm

Perfect Analysis. Something I was looking for to decide on a term insurance plan. Thanks so much, your work helps everyone a lot.

Regards,
Amey

Reply

Gopal Gidwani April 14, 2013 at 8:37 am

Hello Amey,

Thanks for the kind words. Please share the article with family, friends, colleagues and others so that they can also benefit from the article.

Reply

sougato pal February 17, 2012 at 6:50 am

Hi Gopal
I have a small doubt. These claim ratios are for all the various types of insurance(endowment,ULIP,moneyback) or for only pure term plans.

Reply

Gopal Gidwani February 17, 2012 at 6:58 am

Hello Sougata,
The claim settlement ratios mentioned are for all plans of a life insurance company taken together. The data has been taken from the IRDA Annual Report. IRDA does not give a break-up of claim settlement ratios for individual products of a life insurance company.

Reply

nandish February 18, 2012 at 5:09 am

This is a lot of hard work and a must read for every indian investor. The issue is that it does not give break up of policies and so it goes in favor of LIC by and large.

Reply

Gopal Gidwani February 18, 2012 at 10:15 am

Hello Nandish,
Thanks for the kind words about the article.

Yes I agree that the claim settlement ratios given are overall for all the products of a particular company and not only for term plans. But then IRDA gives overall claim settlement ratio and not the break up of the claim settlement ratio for each product. May be the insurance companies can take up the onus on themselves and start giving the break up of claim settlement ratio product wise on their website. This will help the people make their decision. I have seen Aegon Religare giving claim settlement ratio statistics on their website about their online term plan iTerm.

Reply

neeraj March 7, 2012 at 5:12 pm

well done gopal you have really done good job!!! in respect to the Aegon Religare ,company has mention regarding C.S.R. of its term plan on its website, but out of more than 26000 policies issued only 5 had came for claim so far and out of these 4 claims were approved while 1 has been rejected. now just from this much low figure how can one come to a conclusion of company’s repo of claim settlement!!! i think it is very difficult to decide even after looking at IRDA’s data because they are nonspecific and generalised.
once again hats off to you for such a nice article.

Reply

Gopal Gidwani March 10, 2012 at 11:23 am

Hello Mr. Neeraj,
It is nice to know that you like the article. Please share it with family, colleagues, friends so that they can also benefit from the article. Also I agree that these CSR Numbers given are in general for all products of a life insurance company taken together and not just for term plans.

Reply

arun February 24, 2012 at 3:43 pm

excellent details

Reply

Gopal Gidwani March 6, 2012 at 7:10 am

Hello Mr. Arun,
Its good to know that you liked the article. Please share it with family, colleagues and friends so that they can also benefit from the article.

Reply

Kothandaram February 26, 2012 at 6:50 pm

Dear Members,

I have the following question:
I want to take Term insurance in the name of my father who is 58 yrs old.
The reason being he has no insurance in his name so far.
I don’t mind the high premium, but want it to cover the following at least:
Natural Death
Accidental Death
Critical Illness
Please let me know the options available for him, in the descending order of CSR

Reply

Gopal Gidwani March 6, 2012 at 7:19 am

Hello Mr. Kothandaram,
Term insurance is required to protect a person future income and to meet unfulfilled financial liabilities and unfulfilled financial responsibilities. Normally people retire at the age of 60 years. Your father is already 58 years old and must have fulfilled all his financial liabilities and responsibilities. So why do want to go for a term insurance plan for your father at this age? Insurance companies will ask for lot of details for providing cover at this age.

Also lot of companies have maximum entry age capped between 55 years to 60 years for term plans. So you will have to look for a company that has a maximum entry age capped above 58 years.

Also lot of companies have maximum maturity age capped at 65 years to 70 years for term plans. So in case of most of the insurance companies you will not get an insurance cover for more than 7 years or so.

Reply

Sandeep July 20, 2012 at 11:03 pm

Your article is very good. And your every comment are excellent.
I like it so much.
thankyou.

Reply

AJAY KUMAR March 3, 2012 at 8:20 pm

Dear Gopal,

The Article very useful and informative. Could you please give some insight on what are the ground on a insurance company can reject the claim specially in pure term plan other than hiding of facts.

Thanx
Ajay

Reply

Gopal Gidwani March 6, 2012 at 9:39 am

Hello Mr. Ajay,
Disclosure of all facts is one of the prime requirements in a term plans.

Some other reasons that I can think of when companies reject claims are: suicide in the 1st year of insurance, death due to terrorist attack (if not covered under the policy terms), policy is inactive at the time of claim etc.

Even any fraudulent activity like not declaring correct age can result in rejection of claim by the insurance company

Reply

HJP March 9, 2012 at 5:17 am

dear gopal,

i am intersted to purchase HDFC term plan but it is also cover the accidental death & any abnormal deases death.

Reply

Gopal Gidwani March 10, 2012 at 11:30 am

Hello Mr. Prajapati,
HDFC Click2Protect does not have any riders. So if death happens due to an accident the normal base cover amount will be paid.

Reply

manoj August 25, 2012 at 11:06 am
Mandar July 27, 2012 at 9:03 pm

Dear Sir,
All term plans cover accidental death. However if you opt for accidental death benefit rider;your nominee gets additional sum assured over and above the basic sum assured.

Reply

Piyush Moorjani March 9, 2012 at 9:51 am

Dear Gopal,
Your Article was evry helpfull and answered lot my queries.
However i have a few questions Unanswered and hope you will help me with them.

Q1 – Whats the Rider Options? Some compnaies do not offer rider options so does that mean that they will not cover accidental deaths or critical illness Deaths?

Q2 – HDFC Click2Protect does not have any Rider options so whats the Impact of that to the end user taking that policy.

Reply

Gopal Gidwani March 10, 2012 at 11:45 am

Hello Piyush,
When an accidental death benefit rider is offered with a policy then if death happens due to an accident then over and above the base policy amount, the rider amount will be paid. For example if a person bought a policy with base cover amount of Rs 50 lakhs and accidental death benefit rider amount of Rs 10 lakhs, then if death happens due to any reason other than accident, then Rs 50 lakhs will be paid. But if death happens due to accident then Rs 50 Lakhs + Accidental Death Rider amount of Rs 10 Lakhs will be paid. So in total Rs 60 lakhs will be paid.

In case of HDFC Life no riders are being offered. So even if death happens due to accident or critical illness, still the base cover amount will be paid. Since no riders are being offered under this policy no additional amount over and above the base cover amount will be paid in case of death due to accident.

On your query on what will be the impact of no riders being offered under HDFC Click2Protect. The critical illness rider pays a lumpsum amount (provided the disease is covered) for treatment when a critical illness is diagnosed during the tenure of the policy. So in the absence of these riders the amount for treatment will not be payable also the additional amount for death due to accident will not be payable. People who dont need these riders or who get themselves covered for riders through a health policy or some other policy can still go for HDFC Click2Protect even though it does not offer these riders

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Nilesh July 1, 2013 at 8:39 am

dear gopal sir,
Thanks, your information has cleared my doubts.

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JITENDRA KUMAR September 6, 2012 at 9:22 am

Dear Gopal ..
Your article is realy very very informative.I first time , your article has cleared almost my all doubt.Thanks a lot

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Gopal Gidwani September 11, 2012 at 10:59 am

Hello Jitendra,
Thanks for the kind words. Request you to share the article with family, friends, relatives, colleagues etc, so that they can also buy the correct insurance plan that suits their needs

Reply

Siddharth November 25, 2012 at 6:33 am

Hi,
I want to buy a online term plan. which will be buy. and also i want to know about cliam settlament.

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Gopal Gidwani December 11, 2012 at 3:26 pm

Hello Siddharth,
I will suggest you consider ‘Click2Protect’ from HDFC Life. They have a good claim settlement ratio with reasonable premiums.

Vijay Kekan March 10, 2012 at 7:26 pm

Dear sir,
I am bussinessman with 25 Lakhs Liability & annual income is in-between 6 to 7 Lakhs my age is 33 complite, i need puarly term insurance plan which product will you suggest me? what should be minimum sum assured value? how many years tensure should i take?

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Gopal Gidwani March 10, 2012 at 7:44 pm

Hello Mr. Vijay,
Considering your liability and your income and age, I will suggest you go for atleast 1 crore cover. You can consider Click2Protect from HDFC Life. With regards to tenure for salaried people we suggest till the age of retirement i.e. age of 60. But in your case, you being a businessman it depends on at what age you plan to retire. So the tenure will be retirement age – current age. The maximum tenure available in case of HDFC Click2Protect is 30 years.

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Mandar July 27, 2012 at 9:07 pm

Dear Mr. Kekan,there are several methods to calculate the exact amount of coverage required. The proper need analysis done by a financial planner,taking into account your current assets,current and future libilities,your future goals etc.would help you understand the right amount of cover and the plan.

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shridhar March 12, 2012 at 1:42 pm

Hi Gopal, Please suggest me about Aegon Religare – iTerm plan, Can I go for it? my age is 35, I am a salaried person. looking for sum inssured covered atleast 50Lakhs with low premium. Please advice religare is the good choice or not?

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Gopal Gidwani March 13, 2012 at 7:49 am

Hello Shridhar,
The features of iTerm from Aegon Religare are very good and the premium is also very low. But their low claim settlement ratio is a dampener. I will suggest you go for Click2Protect from HDFC Life. Their premiums are very competitive and at the same time their claim settlement ratio is 2nd best in the industry.

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Dev Kumar March 13, 2012 at 5:53 am

Hi!

The information was really very useful.

Wanted to know that If a person is a non-smoker & Non-drinker at the time of purchase of policy but after few years he starts drinking & smoking then what would be the impact on the policy. What disclosure he should provide to the insurance company & what would be the impact on the premium.

Regards,
Dev.

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Gopal Gidwani March 13, 2012 at 7:55 am

Hello Dev,

For a running policy there is no impact on the premium if a person starts smoking or drinking after taking the policy. If you buy a new policy then there will be impact on the premium. But on existing policy there will be no impact.

Some insurance companies may require the policyholder to inform them about smoking / drinking if he starts these things after buying the policy, but that will not have any impact on the premium as the premium once fixed at the time of taking the policy does not change (as per the terms and conditions in the policy).

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satish reddy March 13, 2012 at 6:20 pm

I hope taking iterm plan of aegon religare may be useful as it gives upto 75 years maturity along with riders and low premium. When coming to claim settlement ratio, this may increase in future as the company may not want to spoil its reputation. I want to know whether IRDA can interfere if CSR is low continously. Please give me a good suggestion to go for term insurance plan. can i go with Aegon religare hoping that it will increase its CSR ratio as time go by.

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Gopal Gidwani March 14, 2012 at 12:13 pm

Hello Satish,
The features of the newly launched iTerm are no doubt very good. I cannot comment on how the claim settlement ratio of Aegon Religare will be in the years to come. I hope it only improves so that more people can go for their products.

With regards to IRDA interfering in CSR. There is no direct intervention by IRDA. IRDA has laid down the guidelines for claim settlement by issuing regulations. These regulations ensure that claim settlement is done in a time bound manner. If the claim is rejected for any reason, the insurance company has to give a valid justification for that. If the customer is not happy with the decision of the insurance company then he can approach various channels like the Grievance Redressal Officer of the insurance company, IRDA Grievance Call Centre (IGCC), IRDA Integrated Grievance Management System (IGMS), Insurance Ombudsman, Courts etc.

With regards to term plan, I will suggest you go for HDFC Click2Protect. They have a good claim settlement ratio and the premiums are also very competitive.

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Amol Banpatte March 14, 2012 at 10:51 am

Hi Gopal,
It is very informative article which I come across recently.Thank you for sharing the information and best part about this article is the way you have explained the thing. It simple and easy to understand.
regards,
Amol

Reply

Gopal Gidwani March 14, 2012 at 12:15 pm

Hello Mr. Amol,

Good to hear that the article was useful to you and you liked it. Please share the article with family, relatives, friends, colleagues so that they can also benefit from it.

Reply

Rajesh March 16, 2012 at 2:22 pm

Hi,

It is indeed a very insightful article.
My query is I need 1 cr term cover with permanent disability cover. After researching, I found Bajaj Allianz’s iSecure Insurance Plan suits m requirement, wherein I am getting 48 lacs comprehensive cover (ADB, partial/total disability & waiver of premium). I called up Bajaj ‘s helpline and asked their CSR for last financial year, guy told me its 94%. What is your view on this aforesaid policy.

Also, alongwith above policy I would be taking Bhart AXA’s Family Income secure, as their premium is very very less and I dont mind spending that extra premium over and above Bajaj Allianz policy.

Thanks 🙂

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Shiv Ram Sharma March 20, 2012 at 11:05 am

Very good article having very good analysis of the existing Term Plans. It helped me a lot. Thanks for writing this article

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Gopal Gidwani March 23, 2012 at 7:15 pm

Hello Shiv,
It is nice to know that article helped you. Please share the article with others also so that they can also benefit from it

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Gopinath Pattanayak March 24, 2012 at 10:59 am

Dear Gopal,
First of all i very much thankful to you for shareing such a nice informative article which I come across recently.

I am a salary employee and my income is 7 lakh per annum, Now i am 39 years old, My company giving me all medical claim for me and my spouse too. I am thinking to take a term plan. Which plan is best suit for me and for what amount i should opt.

2ndly while choosing a term plan whether we should look into disability rider and waiver of premium rider also OR it is not so essential.

lastly DEATH means all type of death covered in all plan or not.

hope your best suggestion

Gopinath

regards,
Amol

Reply

Gopal Gidwani March 24, 2012 at 11:44 am

Hello Mr. Gopinath,

Thanks a lot for the kind words about the article.

With regards to your requirement of a term plan, I will suggest you to go for Click2Protect from HDFC Life. Make sure you disclose all details correctly at the time of making the application. This plan does not come with any riders.

In case you are looking for a plan with riders then consider Protector Plus Plan from Birla Sun Life.

Regarding the amount of insurance, well it should be the present value of all your future earnings + value of your financial liabilities + value of your financial responsibilities. In case you find this too technical to arrive at an amount take a multiple of your annual salary (say 15 times or 20 times) and add your financial responsibilities (like child education, child marriage, spouse retirement) and add your financial liabilities (value of all loans outstanding) and accordingly arrive at the insurance amount.

Regarding your last query on all types of death: Well, one common exclusion in all plans is death due to suicide in the 1st year. Apart from that some plans don’t cover death due to terrorist attacks and death due to war and death due to some other specific reasons. This varies from company to company and you need to get this clarified from the company that you are planning to buy insurance from.

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Laxman April 5, 2012 at 6:04 pm

Hi Gopinath,

As per my conversation with Customer care executives.

HDFC Click2Protect doesn’t cover risk (death) in first year due to suicide and MURDER (undocumented in brochure/online) as well. They claim all other types of risks are covered. (Terrorist attack, Drunken driving, Suicide after first year are COVERED)

Kotak ePreferred term claim they don’t cover death caused due to violation of legal rules. (Examples given by customer care executive: Traffic rule violations, Drunken Driving, terrorist attack – NOT COVERED)

This is the information I’ve got based on the discussion with respective customer care executives. You can confirm once with customer care executive and also after receiving the policy document.


Laxman

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Gopal Gidwani April 5, 2012 at 6:53 pm

Thanks Laxman for sharing this info. It will be very useful for the blog readers. But to be on a safe side I would suggest the blog readers to take these terms in writing from the insurance company either in the policy document or in an email from a company email id before buying the policy

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Ankur Singhal August 19, 2012 at 3:48 am

Hi Laxman,

I read in the broucher of HDFC click 2 protect that Accidental death benefit is not there. what does this mean?

Is this mean, policy will not cover accidental death as a deah cover and nominnee will not get the assured amount.

please let me know your views on Isecure term inurance from bajaj Allianz, This policy has a riders of ADB and critical illiness as well.

Regards,
Ankur

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Gopal Gidwani August 20, 2012 at 12:26 pm

Hello Ankur,
Accidental Death Benefit rider is an additional payment made over and above the normal sum assured in case of death due to an accident. But this rider is not available in HDFC Click2Protect.

So it simply means if a person buys HDFC Click2Protect and dies due to an accident, only the normal sum assured will be paid to the beneficiary. The beneficiary will not be paid the additional amount (Accidental Death Benefit rider) over and above the normal sum assured as this rider benefit is not available under this plan.

If you are looking for Accidental Death Benefit rider then I suggest you have a look at Protector Plus plan from Birla SunLife

Ankur Singhal August 21, 2012 at 7:36 pm

Hello Gopal,

Thanks for your response on the query.

Gopal, just want to know your views about to have riders with the policy is a good idea or should we take seperate policies, for example – ADB, Critical Illiness etc.

Why i am asking is that, i have lots of policies including ULIPS, Traditinal Plans , health insurance from differenet-2 compannies and don’t want another seperate policies for ADB and CI if there is no issue in settlement when required.

I feel a need to have a term insurance plan and one critical illiness insurance. If i take term insurance plan with the riders of ADB and Critical Illiness, will it be good for me?

And how these policies works, like if i use my CI rider during my policy, let’s say in 20 years and policy is for 30 years , then the policy will be ended up as soon i use my CI rider or it may continue serving me for the next 10 years as a part of my term insurance?.

Please answer if you have any idea about this.

Thanks!

ALOK SAHOO March 27, 2012 at 10:32 am

Dear Mr. Gopal,

Thanks a lot for this informative article. Actually I was very much confused since last few days which term plan to choose. I am 34 years and salaried person. I have total loan liability of around 30 Lacs. I am already having LIC’s Anmol Jeevan Rs 10 lacs and LIC’s Amulya Jeeva Rs 30 Lacs. I am also having various other endownment and money back policies with coverage of around 8-10 Lacs. I would like to go for one online term plan amounting about Rs 50 Lacs for 20-25 years term. Please suggest whether I should I go for any rider or not. Also suggest whether I should split the amount in two companies.

Alok Sahoo

Reply

Gopal Gidwani March 27, 2012 at 7:12 pm

Hello Mr. Alok,
You already have so many policies from LIC. So splitting insurance among another 2 companies will not be a good idea. I will suggest you go with Click2Protect from HDFC. You already have the remaining amount from LIC

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Sumit Sharan April 5, 2012 at 1:05 am

Excellent Article. Helped me a lot in deciding which term insurance to choose !!

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Gopal Gidwani April 5, 2012 at 6:21 pm

Hello Sumit,

Nice to know the article helped you. Request you to share it with family, relatives, friends so that they can also benefit from it.

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Laxman April 5, 2012 at 9:32 am

Thanks for the your efforts in making the people like me understand the meaning of insurance. And your articles are really information and helpful.

After reading your articles only I decided to go for a term plan. I had chosen HDFC as my first choice. After medical tests, I was informed that HbsAg (Hepatitis B – rapid test) was positive and asked to produce a HbeAg test (confirmatory) report. This time I got HbeAg as negative. Later, they raised the premium to 54% (6600 to 10157) with the reason saying HbsAg is positive.

Its good that I got to know about this. But at the same time I feel the extra premium is too much which is based on rapid test. I’m planning have a HbsAg again wit a different diagnostic center as I’m having doubt. That helps me for further treatment as well. If I get negative this time, Should I proceed with paying extra premium or should I go to Ombudsman or should I go to HDFC grievance cell?

Reply

Gopal Gidwani April 5, 2012 at 6:26 pm

Hello Laxman,
If the test report is negative then there is no case for increase in premium due to HbsAg. You can go for an independent test and accordingly inform the insurance company about the test result / report. If the report is negative you can ask them to reverse the increase in premium. If they still increase the premium for the same reason then as you have mentioned you can approach their grievance officer. If that also doesn’t help you can approach the insurance ombudsman or the IRDA Grievance Rederessal Cell

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Laxman April 5, 2012 at 10:21 am

Some more information I wanted to share to other readers of this blog. If you are going with HDFC, make sure that you follow up after the online payment. In my experience, everytime they pushed the proposal to next step only after my followup (Documents reciept acknowledgement, Medical tests, Second level test).

Initial medical tests will be bourne by HDFC. Later, if they are asking for any confirmatory tests, proposer has to pay for that but we will not be getting any copy of medical reports.

And also, there is confusion about free look period whether it starts from day of online payment or . Everytime you call a customer care executive you will get a different conflicting answer for this. And they simply double confirm that they are correct and others are wrong.

Following are the initial medical tests (28 year male non-smoker non-drinker). This may change based on person to person and the facts proposer has given.

1. Medical Examination Report
2. Midstream Urine Analysis
3. ECG
4. Complete Haemogram
5. Fasting Blood Sugar
6. Serum Cholesterol
7. BIO
8. HbsAg
9. HIV
10. HbA1c
11. Urine Cotinine

This is just for information and for the benefit of other readers of the blog only. I’m not against HDFC and as mentioned in my previous comments I’m still planning to proceed with HDFC only.

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Gopal Gidwani April 5, 2012 at 6:40 pm

Hello Laxman,
It is bad if a follow up is required to move the proposal to the next stage.

With regards to the ‘free-look’ period, as per IRDA (Protection of Policyholders’ Interests) Regulations, 2002 the free-look period of 15 days is counted from the date of receipt of policy document by the insured.

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MANOJ RAWTANI April 6, 2012 at 3:39 am

Dear Sir,

Thank for a very good article. Please advise me how to protect my housing loan of Rs. 20 Laks taken from HDFC for 18 yrs. should I go for a term plan

Reply

Gopal Gidwani April 7, 2012 at 9:20 am

Hello Manoj,
You can go for either a reducing mortgage policy. This will go on reducing as the home loan keeps getting paid. Most insurance companies offer this type of policy. Or the second option is to go for a pure term plan.

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MAN April 9, 2012 at 2:34 am

Sir,Thank you very much for the prompt reply, please advise me which is better option ,

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Gopal Gidwani April 9, 2012 at 10:47 am

Hello Manoj,

I will suggest you go for a term plan. Have a look at Protector Plus from Birla Sunlife. Recently I heard from 2-3 readers about HDFC Life not processing their applications due to various reasons

Reply

MANOJ RAWTANI April 9, 2012 at 3:24 pm

Dear Sir, Thanks once again, I have contacted HDFC people, they are ready for the same, I am 47 yrs old, and is already having birla sunlife dream plan for 18 lakh, C2P is costing Rs. 12000/- for 25 lakhs but for 15 yrs only. further I am in Govt Job i.e in KVS, pensionable service

Naven April 6, 2012 at 3:08 pm

Hi Gopal,

Very good article.
Helped me to decide which term plan to go with.
Thanks a lot. Keep up the good work.

Regards,
Naveen

Reply

Gopal Gidwani April 7, 2012 at 9:20 am

Hello Naveen,
Got to know the article was helpful to you. Please share it with others so that they can also benefit from it.

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Vikas April 8, 2012 at 3:44 am

Hi Gopal,

I have applied for HDFC Click2Protect in mid-January. Service of the company is giving me nightmares. To talk to a real person, mostly one have to wait 20-25 minutes on call. But there is more:

I got a confirmation call after two days of payment and these guys keep mailing me entire January that I am not picking up the calls. Later when I complaint hard, I got my medical test done in mid-February.

One month passed, I called again and again, then in March I got a mail(FR-further requirements) to furnish my usual doctor details. I mailed this info on 13th March and got acknowledgement on 16th March.

Now this is April, I decided to follow it up. The information which I got now is surprising. As per their records my medical is okay. FR (further requirements) is raised. On 20th March, policy is withdrawn by HDFC and premium is refunded on 23rd March (Yes, I verified that I got the money back).

Customer care says that the reason could be ‘no-reply’ of FR from my side. I talked to the higher manager who could not tell the reason of withdrawal, but asked me to wait till Monday.

I am assuming that, my financial status is okay, because I got medical done. Medical test result is fine as mentioned. What are the other things a company checks?

Please guide what options do I have. I really want to get this policy because recently I crossed my birthday and premiums are now increased for me everywhere. In future I will have to mention to each company that I have been refused to be given Life cover once.

Reply

Gopal Gidwani April 8, 2012 at 8:19 am

Hello Vikas,
Just 2 days back I heard from one more customer having a bad experience with HDFC Life. You can contact their grievance redressal officer or contact IRDA or Insurance Ombudsman for help.
You can read more about insurance grievance redressal at this link
http://www.bachatkhata.com/2012/04/grievance-rederessal-procedure-in-life-insurance.html

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Vikas April 8, 2012 at 9:17 am

Your mentioned post is very informative.

But do you believe if there is a possibility that HDFC Life may consider the same application again for which they have already processed the refund?

I am willing to pay the same amount again.

Reply

Gopal Gidwani April 9, 2012 at 10:45 am

Hello Vikas,
If you feel there is nothing wrong that has happened from your side, then you can definitely approach IRDA through their Call Centre or their IGMS system. IRDA will take up the matter with HDFC Life and accordingly give you a resolution. This can be in the form of same (cancelled) policy getting issued to you or a new policy getting issued to you or any other resolution which is acceptable to all parties involved.

I will suggest you use the IRDA IGMS system. In this system your complaint will flow to HDFC Life through the IRDA system. IRDA constantly monitors the status of these complaints and ensures they are resolved in a time bound manner

Reply

Vikas April 10, 2012 at 11:36 am

Hi Gopal,

After threatening them for legal action I got a reply. It was their mistake, but there is no written acceptance. Instead they wrote:

“We wish to inform you that your policy is in withdrawn status and money is refunded back to your account. We shall re- start the case again, please visit to our nearest HDFC Life Branch and submit a fresh cheque of the same amount.”

I have now made the payment. Lets see how it goes further!!

Musthafa August 10, 2012 at 7:05 pm

Dear Gopal your article is very helpful.

buying a online term plan is a good idea..?
because if you buy a policy through a insurance agent he will help your family on the event of the claims and renewals or policy service. i have seen some service problems in online policies.
what do you say about service/help factor comparing online vs agent.

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Gopal Gidwani August 14, 2012 at 11:29 am

Hello Musthafa,
A person can go for an online plan. At the time of claim, the required details can be submitted at the branch of the insurance company. The insurance company does not differentiate in the claim process based on whether the claim has come directly or through an agent.

With regards to renewals in online policies, the insurance company reminds you by sending a letter, email and through SMS. So you don’t need to depend on the agent for renewal. Also the renewal process is fairly simple and the regular annual premium can be paid online.

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Mani December 10, 2012 at 5:55 pm

Dear Sir, I too had a very bad experience with HDFC click 2 protect. After e payment, the link broke and the payment was debited from my account. And rest is anyone’s guess. From 19th January till April, I had to call their executives/email , umpteen times to get the refund. Initially, I said that either u issue me the policy OR give me the refund. None happened. Very poor service. I hate them.

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Gopal Gidwani December 11, 2012 at 3:11 pm

Hello Mani,
It is very unfortunate what happened with you. So did you get your refund or you have still not got it?

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Sandeep Nangrani April 12, 2012 at 9:21 am

Hi All,

Just wanted to share Claim Settlement Ratio for iTERM as per the following website – https://buyonline.aegonreligare.com/iTerm-plan.asp#brochure
i TERM Claims –
Received: 07
Honoured: 06
Rejected: 01 (Rejection reason could be read on the captioned link).

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Gopal Gidwani April 12, 2012 at 11:56 am

Hello Sandeep,
I was aware of this. But since the company keeps getting new claims from time to time, so I did not put this statistic here as it will keep changing.

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lakhvinder April 14, 2012 at 6:03 pm

sir
i am 31 yrs old suffering with non obstructive cardio myopathy due to which my proposal of term plan was rejected by aegon and kotak
what should i do now for securing future of my family

Reply

Gopal Gidwani April 16, 2012 at 7:37 am

Hello Lakhvinder,
Two companies have already rejected your application. You can check with LIC. But in the application make sure you declare that your application was already rejected by two companies. Please dont hide any thing in the application

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tanjit April 15, 2012 at 6:52 pm

sir I realty hopeful that u may give me proper solution.
sir, I have been served as government servant since five year; want term plan and I m 27 yr old.my monthly salary is Rs.13500.today I watch on utube”apna money episode of cnbc awaz”.in this epi. expert says “u should take sum assured as 10times of your monthly income” here please explain why they suggest like this?? my salary increased every year and I want 50lack sum assured today.Because after 10 year I may be eligible for it but I will be 37old and premium will be high that I have to pay and social responsibility and expenses also increase. may I take or not if no then why? how much should I take if insurance company give 25to30times of monthly salary! may be chance to refuse the claim on higher sum assured on death

Reply

Gopal Gidwani April 16, 2012 at 7:41 am

Hello Tanjit,
As per your requirement you can apply for a cover of Rs 50 lakhs. The insurance company will assess your premium paying capacity based on your income. In case they feel you will not be able to pay the premium then they will come back to you with a reduced cover offer.

But I don’t think that you will be denied a cover of 50 Lakhs. So go ahead with your application of Rs 50 Lakhs.

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madan May 6, 2012 at 7:38 pm

I doubt if he will get a 50 lakh cover on 13500/pm salary. Aviva offered my wife 40 lakh cover against applied cover of 50 lakh on much higher salary. For Aegon minimum salary 25000/- for iTerm Plan of any amount.

More about Aviva

We have paid premium (12916/-) online on 21/01/2012 for 50 lakh cover. medical was done on 23/01/2012 as scheduled and it was OK. They wanted scan of PAN card and ITR. These were sent through mail on 21/01/2012 since could not be uploaded. They wanted identity, age & income proof vide mail dated 27/01/2012 & 28/01/2012. scan of PAN card and ITR were again sent on 28/01/2012 and they confirmed receipt.
Then started the problems which are still continuing;
On 31/01/2012, they wanted CA certified Computation of Income, Salary slip. My CA was out of station for next 15 days so it was not possible to send CA certified Computation of Income. It was informed to them. They just do not listen. They communicate only through e-mail. They never talk over phone.

They were informed on 01/02/2012 that ITR indicating taxable income of Rs.2,71,154/- already given i.e. monthly income of Rs.22,596/pm, which was much more than salary income of Rs.16000/pm. This include Rs.1,92,000 income from salary, Rs.57,815/- trading income and Rs.21,339/- as other income which includes bank interest. I offered to submit Form-16 and sent TI-TTI portion of ITR-4 on 01/02/2012 on but they continued insisting on salary slip and CA certified computation and advised again on 01/02/2012. On 03/02/2012 over e-mail they offered reduced cover of Rs.40 lakh but through sms they continued asking additional information.On 04/02/2012 they sent consent letter for reduced sum assured. Nobody talked or explained anything whether they would again ask for salary slip and CA certified computation for cover of 40 lakh. This agitated me I informed them on 06/02/2012 to discontinue with proposal. On 07/02/2012 they informed initiating cancellation process.

I am yet to get refund. Meanwhile when I could get CA certified computation I offered to submit but they informed your application has already been cancelled.
For refund, Every mail they respond and same line is repeated that they have paid back. I have sent them statement, showing there is no credit but nobody talk or listen.

What to expect after issuance of policy if such is state of affair while issuing it?

Reply

Gopal Gidwani May 11, 2012 at 9:51 am

Hello Madan,

Thanks a lot for your feedback on Aviva. It is very unfortunate to read what happened with you.

With regards to financial underwriting insurance companies ask for income documents to arrive at the amount of insurance that can be offered to the applicant.

Reply

tanjit April 15, 2012 at 7:25 pm

____sorry sir but some correction ______
sir I realty hopeful that u may give me proper solution.
sir, I have been served as government servant since five year; want term plan and I m 27 yr old.my annual income is Rs.160000.today I watch on utube”apna money episode of cnbc awaz”.in this epi. expert says “u should take sum assured as 10times of your annual income” here please explain why they suggest like this?? my salary increased every year and I want 50lack sum assured today.Because after 10 year I may be eligible for it but I will be 37old and premium will be high that I have to pay and social responsibility and expenses also increase. may I take or not if no then why? how much should I take if insurance company give 25to30times of annual income!! may be chance to refuse the claim on death because of higher sum assured taken like 25 to 30 times of annual income.

Reply

KP April 17, 2012 at 7:01 am

Hi Gopal,

Had a query with regard to Term plans. I am currently 29 years of age and looking for 50 lacs Term plan.

Aegon Religare is offering iTerm Policy of 30 years term plan for around annual premium Rs. 3900 while for HDFC Click 2 Protect is coming for same 30 year term plan at annual premium of Rs. 6180.

There is a high difference of 2200 in premium.

though i am titled to going for HDFC Click 2 protect however the premium of Aegon Religare is on a very low side.

I have short listed 3 companies; Aegon Religare iTerm, Aviva iLife, HDFC Click 2 Protect.

Kindly help what I should look at when selecting between these policies. Bit confused between the 3 policies. Can you suggest which is better between these.

Thanks,

KP

Reply

Gopal Gidwani April 20, 2012 at 10:58 am

Hello Mr. KP,

Please remember that if a person declares everything honestly, no company will reject the claim at the time of death.

I agree that the features of the newly re-launched iTerm are very good. But if I were to choose between Aegon and HDFC, at the moment I will go for ‘Click2Protect’ from HDFC. Few years down the line once Aegon Religare stabilises and improves its claim settlement ratio, then maybe I will have a relook at it. I will prefer to pay a slightly higher amount for stability and higher claim settlement.

Reply

BHINES April 20, 2012 at 9:47 am

Dear sir,
I was impressed by your guidance to innocent,ignorant and gullible public. Keep it up. I had taken a Met protect TROP policy of Metlife for a sum of Rs. 2000000/- in the year 2006 for an annual premium of Rs.8960/- for a term of 20 years for my son. The annual premium which was fixed for entire term of the policy as per terms & condition mentioned in the policy document was paid every year against renewal receipt issued by the company for the next three years, but suddenly after that in the month of Jan 2010 a letter came from the company stating that service tax amounting to approx. Rs.100/- has to be paid along with tha regular annual premium from next renewal. In the policy document & or the first premium receipt there was no mention ,whatsoever, regarding payment of taxes, in whatever name, i.e. it was totally silent on the tax issue. When I objected to the Co. against this , they said it is a statutory obligation which we have to abide, although in the same letter they accepted the fact that in the previous years the Company was absorbing the service tax and was paying from their pocket but now decided that the policy holder has to pay. My point of contention is once premium is fixed for an annual mode it can not be unilaterally be changed by the whims of the officer concerned at the Co. I took up the matter with IRDA providing full details of policy document & the first ,second, third & fourth premium receipts without mention of service tax .It is more than a year IRDA is sleeping over the issue inspite of the fact that I have called them over the phone about 100 times for the redressal of the issue but you very well know this is INDIA . In the mean time the Co. has literally forced us to make the extra payment otherwise they say that the policy would lapse due to non payment of full premium on renewal, and you know this is a term policy. Now guide me what should I do.

Reply

Gopal Gidwani April 20, 2012 at 11:11 am

Hello Mr. Binesh,
Service Tax is a statutory obligation. In this year’s budget the Finance Minister raised the service tax from 10% to 12%. So most life insurance companies that have fixed premium have raised the service tax component by 2%. Statutory obligations are something that everyone has to comply with and we can’t escape it. So my personal opinion is you will have to pay service tax

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KARAN MANOCHA April 21, 2012 at 9:27 am

Hi Gopal,

Kudos to you for writing such an excellent article. Please reply to my query:

Suppose If I take an insurance of 1 crore from Aegon Religare but after say 10 yrs or so the two companies (Aegon and Religare) end up their tie-up in India and starts a tie-up with some other company for providing life insurance. In this case will I be able to continue with my current term insurance plan and same premium with the new entity formed?? And what if the two companies just breakup and neither starts any new tie-ups, will my interest be protected by IRDA in this case?

Reply

Gopal Gidwani April 22, 2012 at 11:05 am

Hello Karan,
Any change in ownership in an insurance company needs IRDA approval. Any new company just simply cannot walkin to become a new owner and any existing owner cannot just decide to wind up business one fine day.

Insurance is a very capital intensive business and IRDA has put in place stiff terms and conditions for any new player to enter. Also it is not at all easy for any existing owner to close business as per his willingness.

Also when there is change in ownership, the new owner cannot touch the rights of existing policyholders. The existing policies will continue as it is. Changes (if any) can be made to new policies which will be issued after the new owner comes in. So don’t worry IRDA is always there to protect the rights of the policyholders.

Reply

bineet April 26, 2012 at 11:29 am

Dear Gopal
thanks for sharing the information. i want to bye a term plan and my age is 32 year.
i am a non smoker, but my grandfather died due to cancer. my father is also a non smoker. although i do not have any medical problem but write now i have gained some weight, from last one year ( after marriage, i hope u understand that )
i want to know
1 should i reduced some weight and then go for policy
2 how much sum assured should i take as only dependent right now i have is my wife but in near future i was expecting my child and mother father will also depend on me.
3. what company should i chose as my experience with hdfc life was not good ( i have their saving assurance plan from 3 years ) as they lied to me about the plan.
regards
bineet

Reply

Gopal Gidwani April 27, 2012 at 6:35 am

Hello Bineet,

You have not mentioned your weight, so I don’t know how much your weight is more than average. Normally a height – weight combination is considered. Based on your height, if the weight is more by a certain percentage, still it is considered fine by insurance companies. But if the weight is more that a certain specified range, then based on the medical reports the insurance underwriter takes the decision.

With regards to cancer family history, you will have to declare it in your application form. Since you and your Dad, both are non-smokers and both are fit and fine, according to my personal opinion this will not have any impact on the premium, all other things being normal.

On your query on the amount of insurance, you should decide the insurance amount based on the future. As you have mentioned, you plan to extend the family, and also your parents will be dependent on you, take all that into consideration and decide the amount. Some pointers to be considered for deciding the insurance amount can be: The present value of all your future earnings + your financial responsibilities (children’s education & marriage, spouse retirement) + your financial liabilities (home loan and any other loans) – the value of your assets

With regards to choosing the company. It is sad to know that you had a bad experience with HDFC Life. But in insurance most of the times, bad experiences are with individuals that we deal with. If an individual has lied or hidden something from us, either intentionally or unintentionally we cannot say that the company is bad. Please note that I am not defending HDFC Life. Since there are no intermediaries involved in online term plans, you can consider ‘Click2Protect’ from HDFC Life. If you are not comfortable with them, then you can consider ‘Protector Plus’ from Birla Sunlife

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lakhvinder singh April 27, 2012 at 3:11 pm

sir,
i am 30 yrs old and suffering with non obstructive cardiomyopathy as i am not able to get any policy to cover any one, as per armed service i am fit for sea service with very little restrictions.
what should i must do to cover my family
please help

Reply

Amar Ante April 28, 2012 at 3:42 am

Hello Mr. Gopal Gidwani,
I want to take advantage of your knowledge.
I want to buy critical illness cover. I am 43 yearls old. I have just purchased iCare option II plan of ICICI pru of 50.0 lakhs. I have Max Newyork’s 10.0L term plan cover (+10.0 L ADB). Shall I go for plain vanilla CI policy or another term plan with CI rider. Don’t you think Accelarated CI rider is the best choice as it has low premium. My icome is 10.L p.a. Thanks.

Reply

Gopal Gidwani April 28, 2012 at 8:44 pm

Hello Mr. Amar,
You already have 2 term insurance policies. Buying a 3rd term insurance policy only for a critical illness rider will not be a good idea. I suggest you club your critical illness rider with your health insurance policy or go for a standalone critical illness policy.

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Milind Parkar May 3, 2012 at 5:28 am

Hi Gopal,
Thanks for sharing this useful info. I will help in my decision on purchasing a Term Policy.
I would like to know about the best available Mediclaim Policies for my mother who has completed 55 yrs of age. She is also suffering from Rheumatism but never been hospitalized, only consumes a tablet daily.
Could you please help?

Reply

Gopal Gidwani May 3, 2012 at 5:27 pm

Hello Milind,
You can have a look at plans from Apollo Munich and Max Bupa. They offer life long renewal. But I am not an expert in health insurance. So I suggest you approach some health insurance expert like MediManage.

Reply

Milind Parkar May 12, 2012 at 5:52 am

Thanks Gopal. Would approach Medimanage.

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Rahul May 4, 2012 at 7:23 am

Hi Gopal ,

First of all , thank you for informative article. It is very useful.
I have query regarding online term insurance plan by ICICI iCare. It says without Medicals , just wanted to know if it has any riders or hidden costs due to this no medicals facility ? or Are there any limitations in Claims settlement ? I am 29 right now and looking for 1 Crore cover.
Thanks once again !

Reply

Gopal Gidwani May 5, 2012 at 2:16 pm

Hello Rahul,
There are no hidden conditions with ICICI iCare. The have a maximum cover restriction based on the age band that you fall in. Based on age, the maximum cover that an individual can opt for is Rs 1.5 crore and as age increases this is restricted to Rs 70 lakhs at the higher end of the age band.
There are no limitations in claim settlement.
Since there is no medical test, at the time of filling the application form take little extra care and disclose all possible relevant information whether the company specifically asks for it or not. Also disclose the details of your existing life insurance policy/s (if any)

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CA Priyank May 9, 2012 at 12:36 pm

Hii

Hats off for ur most useful reserch. it contains all the details as an individual need. Plz do inform me on my mail when LIC comes with online cheaper term plan. I want to plan for myself as well as many of my clients.
Mail ID: capriyank11@gmail.com

Reply

Gopal Gidwani May 11, 2012 at 9:55 am

Hello Priyank,

Thanks for the kind words of appreciation you mentioned about the article. LIC first made an announcement on their online term plan in September last year, then they said they will come out with their online plan in March 2012. Right now we are in May and the wait continues for the online term plan from LIC. Will definitely email you once LIC comes out with their online term plan

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Ashish May 10, 2012 at 8:30 am

Hi Gopal,
Thanks for a very nice article giving all the possible details about the various term plan options. Do you think that the exception conditions are also important while selecting a term plan. By exception conditions, I mean for e.g. no benifit given in case of terrorist attack or nuclear war etc. How does the different plans fare with respect to that? Also there has been a lot of discussions about online vs offline plan. I purchased a new term plan from Birla Sunlife recently (1 crore) mainly because of the good CSR/CRR but also because of it being an offline plan and so there would be a human factor attached (i.e. the agent). What is your opinion about this?

Regards
Ashish

Regards
Ashish

Reply

Gopal Gidwani May 11, 2012 at 10:22 am

Hello Ashish,
Exceptions are important. For people staying in places that are frequently prone to terrorist attacks, insurance cover for terrorist attack is important. So if terrorist attack is excluded and if death happens due to terrorist attack, the insurance will not serve any purpose.

There is no difference done by the insurance company in claim settlement irrespective of online plan or offline plan. So it does not make any difference. The benefit of online plans is they are cheaper due to elimination of some costs. The Protector Plus Plan from Birla Sunlife is a good choice!!!

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Pinaki May 17, 2012 at 5:14 pm

Dear Sir,

Your article has given me an immense knowledge of the various options and important factors regarding pure term insurance products.

I am 28 years old and currently hold an LIC Amulya Jeevan Policy (starting in 2009) of sum 40 Lacs and 30 years duration. I have recently completed my MBA , and have a liability of 13 Lacs (Education Loan). My yearly income is 15 Lacs. I have parents and a sibling dependent on me, and I intend to start my own family in a year.

Please advise me on how much should I make my current Risk Coverage? Also, should I discontinue the Amulya Jeevan as it looks like the costliest?

Reply

Gopal Gidwani May 22, 2012 at 4:29 am

Hello Pinaki,
With regards to the insurance cover that you should take, here are some pointers for it:
1) You have mentioned your age is 28 years and your annual income is 15 lakhs. So calculate how much you will earn in the next 32 years till your retirement assuming your salary goes up by a minimum 5% every year. Then take the present value of this lumpsum amount as on today.
2) To this amount add your financial responsibilities (amount required to child education and marriage and spouse’s retirement) and your financial liabilities (education loan and any other loans that you have)
3) From this deduct any assets that you have which can be disposed off if required.

The resulting amount will be the insurance cover that you should ideally buy.

If you find this complicated then as a simple measure just take 15-20 times multiple of your salary.

Your current cover of Rs 40 lakhs is inadequate. You may top up your existing cover with Click2Protect from HDFC Life

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Ram Mukesh Yadav May 18, 2012 at 6:09 am

Dear Gopal,

Sir, I want to take a term insurance plan of around 50 lakh. I am handicap from one leg due to polio from my childhood days, presently working in IT industry with salary package of 2.5 lakh, so tell me which company is best for me. thanks

Reply

Gopal Gidwani May 22, 2012 at 4:41 am

Hello Ram,

I am not aware of any life insurance company that has a term insurance plan specially designed for people who are disadvantaged in any way or people who have any type of disability.

You may apply with life insurance companies and based on the documents that you submit and the medical examination reports the life insurance company may charge a little extra premium or grant limited cover or some company may even reject the proposal if it thinks its too risky.

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pritam inamdar May 23, 2012 at 10:06 am

hi,
2 yrs ago, i had taken 80 lacs term plan from kotak life.
i had paid prm for 2 yrs. now i am checking with other ins cos that with same prm i am getting higher ins cover.
is it advisable to change company? i am ready to do all medicals and other formalities.
also, is bajaj allianz’s family care first is good mediclaim policy?
regards,

Reply

Gopal Gidwani May 24, 2012 at 8:39 am

Hello Pritam,
If there is a significant difference on the premium (on the lower side) with the same cover or if there is significant difference on the cover (in the higher side) with the same premium then it makes sense to shift. But first apply for the new policy and once you get all the documents in hand and are satisfied with the mentioned terms and conditions then discontinue with the existing policy.

With regards to mediclaim policies, I don’t have much knowledge about them. I will suggest you get in touch with some health insurance expert like MediManage etc.

Reply

Aarj May 26, 2012 at 1:57 pm

Thanks Gopal for such informative article. This is a gud reckoner for term plan.
I have couple of questions –
1. How important is to have ‘Waiver of premium’ rider in term plan? Currently, it is only Birla SL is offering it. The premium for BSL is much higher than HDFC life – which means if 1 wants waiver of premium, there is no choice but to go for BSL and pay higher preium.
2. Does it makes sense to go for term plan thru agent or online? given that there is lot of administrative hassle in getting the policy (as seen from few instances in this blog). Obviously, there is a cost attached to going thru the agent.
3. I visited HDFC life office and the circle mgr there gave me a quote which is Rs.400 p.a. higher than the online term policy premium (C2P). Reason for this additional charge is because he is doing it online through his agency code. I think this is a charge to take care of the administrative hassle. What do you think?

Thx

Reply

Gopal Gidwani May 28, 2012 at 6:01 am

Hello Aarj,
In term life insurance plans the ‘waiver of premium’ rider comes in handy when a person becomes disabled and is not in a position to pay the future premiums. In other plans like child plans if the parent dies, then the child plan is not hampered as the ‘waiver of premium’ rider comes into the picture and the insurance company pays the remaining premiums and the plan remains intact.
If a person has a separate policy from a general insurance company that takes care of accidents and disability then this rider may not be looked at in a term life insurance policy.

With regards to choosing between an online or offline plans, I will suggest you go for an online plan. Just make sure you have all the documents in place before you start filling the application form. I have seen some people not able to submit the family doctor’s certificate or income certificate on time and their application gets rejected. So make sure you have all the documents in place and then make the application.

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Vikas May 28, 2012 at 6:11 am

Regarding point 3.

Yes HDFC offer online plans in two ways. First you yourself fill online form. Second, an agent fills the form for you and your premium is increased by Rs.400. My agent hide this information and I refused to go through him.

I got my policy issued by applying on my own.

Reply

Mohit Jain May 30, 2012 at 12:49 pm

Dear Gopal,
Its really a very good article & will helps to all who want to buy any term plan. I want to know that what’s the best in the following options, lock in period of any poclicy has over –
1. Continue to pay any existing policy which lock in period has over & we can stop the payment.
2. To take a new policy with some additional benefit & life cover.
3. Partial withdrawl from any existing policy which lock in period has over & repay premium of that policy in current year (Lock in period Over).

Reply

Gopal Gidwani June 7, 2012 at 4:27 pm

Hello Mohit,
I am not very clear on your query. But from whatever I have understood, let me try and answer. Since the above article is on term insurance plans, there is no question of partial withdrawals, as there is no maturity benefit in term insurance plans.

With regards to stopping the premium payment after the lock-in period, well check if the policy suits your needs. If it does not suit your needs, they only you make consider stopping the premium and making the policy paid up. But in that case make sure you go for some other insurance plan that suits your need and make sure you have adequate insurance cover.

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Pradeep Kumar Jain June 2, 2012 at 1:47 am

Hi Gopal
Fantastic article. I sincerly appreciate your hard work. With lot of companies and variety of benefits and wide difference in premium band, it is difficult to choose a product and stick on to it due to constant changes in cost and benefits.

Why IRDA is not providing for 100 % same product, same proposal form, same terms and condition, same financial underwritting, same claim settlement procedure etc. This will make insurance universe easy to understand.

Thanks a lot.

Reply

MS June 8, 2012 at 6:53 am

Hi Pradeep,
IRDA is a regulator and just ensure that the insurance market is we regulated but can’t force products or companies as such otherwise it will be a flat market without any competition, do you really want it ?

Reply

MS June 6, 2012 at 2:36 pm

Hi Gopal,
Very elaborative and Excellent information indeed. I was exactly looking for something similar. Still have doubts for partial disability cover. What are the finer details for disability, does it mean that you get 50% sum assured in case 50% disability (does it mean loss of 1 eye or limb).

Reply

Harshang Shah June 6, 2012 at 5:48 pm

Hi Gopal…this is a one stop article for anyone who needs to buy term insurance…Great work. It really helped me in making a decision.

Thanks a ton !!!

Reply

Gopal Gidwani June 7, 2012 at 4:30 pm

Hello Harshang,
It is good to know that you like the article. Please share it with others!!!

Reply

Mohit Jain June 8, 2012 at 7:13 am

Dear Gopal,
Thanks a lot for such a fantastic article. Actually i want to take a term insurance plan to cover my home loan. My home loan amount is 24 Lacs from HDFC Bank. I want to take policy according to best claim settlement ratio with no high premium. I have some other policies from LIC New Bima Gold & Aviva Life Bond 5. Aviva New Freedom Life Plan with my wife as a joint holder. In my LB5 Policy lock in was 5 years which i have paid, There are not satisfactory growth in Aviva policy as its market link plan. i also want suggestion that whether i have to stop payment in LB5 as policy will run with this earlier payment & take a term plan to cover the risk. Please also suggest the best plan for me in term plan.

Thanks a lot in advance.

Reply

Gopal Gidwani June 19, 2012 at 12:17 pm

Hello Mohit,
With regards to term plans you can go with ‘Click2Protect’ online term plan from HDFC Life Insurance

Reply

Manivannan June 14, 2012 at 6:13 am

Dear Mr.Gopal,

Your article ‘ Claim settlement ratio for life insurance companies for 2010-2011’ is thought provoking artilcle, in choosing low premium Vs high settlement ratio term plans. I am sure this article will help hundrends & thousands of people in choosing right term insurnace plans.

A tribute to your analysis….

Regards
manivannan
chennai

Reply

Bhargav June 19, 2012 at 12:40 pm

Hi,

As a personal suggestion, don’t go for HDFC click 2 protect…. Their service is very very bad… I applied for it last month 10th and still did not get the policy..just last week after about 20-30 follow ups and mails, i got my medical check up done…
If i mail them i will get reply in around 10 days and if i call them, believe me, it looks like a fish market over there.. you can’t hear what they talk as the ppl over there make so much of noice..there is no professionalism… very horrible… Today I decided to ask them to cancel my policy and return my money.
I applied for aegon religare on saturday and their medical person came to my home today and took all my tests. Very prompt response for mails and phone calls..
Thats the reason i am opting to cancel the policy of HDFC click to protect and just dropped a mail to them not to issue it anymore.(If their service is as such when I am there, how can I have trust on them when I am no more…!)

Very strict NO NO to HDFC term plan – click to protect…I have heard the same experience from one of my friend also…

Ram.

Reply

Gopal Gidwani June 22, 2012 at 7:10 am

Hello Bhargav,
Thanks for sharing your experience related to HDFC Life ‘Click2Protect’ online term plan and Aegon Religare ‘iTerm’ online term plan. Before this also I have heard from few people on this blog about their bad experience with HDFC Life. Whereas there are some people who did not have any issues at all with HDFC Life and their policies were issued smoothly.

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Imran June 20, 2012 at 8:59 pm

Hi Gopal,
Thank you so much for your great article . it has made things clear and easy to understand. i still have some queries. i am looking for a term insurance for Rs. 1cr and has decided to g0 for two policies of 50lac each. i have decided to go for birla sunlife protector plan as it has the riders iam looking for. now iam confused about which other company i should go with for the remaining 50lacs. is LIC a good option and one has to buy LIC for guranteed claim settlement or can i go for HDFC or ICICI or should i buy Aegon religare with cheap premiums. my anual income is 5lacs . please help in taking the correct decision as i have to buy the policies as soon as possible.

Thanks & Regards
Imran Shaikh

Reply

Imran Shaikh June 20, 2012 at 9:09 pm

Hi Gopal,
Thank you very much for posting such a great article. it has made things clear and easy to understand. i still have some queries. my anual salary is Rs. 5lacs and iam looking for a term cover of Rs. 1cr. now i have decided to break this amount into two parts and buy two polocies of 50lacs each. i have decided to go with Birla sunlife for rs 50lac cover as it has the riders iam looking for . now iam confused in selecting the other company for the balance 50lacs cover. should i buy LIC as a lot of people suggest atleast one LIC policy has to be taken for a guranteed claim settlement or should i go for HDFC or ICICI online plans or simply buy Aegon religare for a maximum cover in cheap premium rates. m really confused kindly help me in taking the correct decision.

Thanks & Regards
Imran Shaikh

Reply

Gopal Gidwani June 22, 2012 at 7:27 am

Hello Imran,
Please note that taking a policy from LIC does not guarantee claim settlement as you have mentioned. If all the documents are in place and if all the required disclosures have been made, then any company will settle the claim.

You can split your insurance cover into 2 policies: 1 from Birla Sunlife and the other from HDFC Life

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MANOJ RAWTANI June 22, 2012 at 4:38 pm

Dear sir,

I have got issued HDFC C2P as advised by you,there were some delay i.e about a month or so,but there was good response by them . I think they are good peoole there was some problem with my medical they sorted out ,they took lab reports from me. At last policy was issued without any extra premium. Kindly advise me to surrender my policy of birla sunlife dream plan since i have taken a extra plan in C2P ie. it was fro 17 lakh(dream plan taken in 2010) for 22000/ annual premium whereas C2P is rs. 17850/- for 50lakhs.

Reply

Gopal Gidwani June 25, 2012 at 4:21 am

Hello Mr. Manoj,

It is good to hear that you got the HDFC ‘Click2Protect’ Policy issued. Some people faced a problem with increase in premium and had to cancel the policy!!!

Reply

Avinash June 26, 2012 at 9:20 am

Hi Gopal,

I am 23 years old non-smoker,want to purchase a term insurance of 1 crore. I have few questions because
@ 23, i am more concerned regarding putting money at right policy.

1) HDFC Click to protect v/s HDFC Term plan
Both are hdfc plan and click to protect is much cheaper. Which one should i prefer ?

2) HDFC v/s ICICI — which one has better claim settlement rate ?

3) LIC Amulya Jivan v/s SBI Shield Plan – In terms of claim settlement andreliability

Thanks in advance

Reply

Gopal Gidwani June 27, 2012 at 6:16 am

Hello Avinash,
You should go for Click2Protect instead of HDFC Term Plan, because C2P is cheaper. Since both plans are from HDFC Life there will be no difference in claim settlement.

HDFC Vs ICICI: In comparison HDFC has a better claim settlement ratio

LIC Vs SBI: In comparison LIC has a better claim settlement ratio

Reply

datta June 30, 2012 at 5:34 pm

Thank you sir artical is very important. I want all protection like term insurance, permanant/partial disability,critical illness & safety from other possibility with low premium and best company.Request you to suggest best plans immdiately.

Reply

Gopal Gidwani July 3, 2012 at 4:46 am

Hello Datta,
For life insurance I suggest you go for Click2Protect from HDFC Life. They have the second best CSR in the industry. With regards to critical illness and disability insurance, I have limited knowledge in that area, so I will not be in a position to say much on that.

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datta July 1, 2012 at 4:16 am

pl tell me best plan for critical illness & permnant / partial disbility with low premium high risk cover and best company.
Tell me csr for 2011-2012.
if total year data not available give quarter wise

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Vikas July 5, 2012 at 9:53 pm

For Accidental insurance,
I would advice you to do consider ‘Bajaj Allianz Premium Personal Guard’ policy. Compare it with other policies and decide. I have enrolled in the same.

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shubham July 3, 2012 at 7:20 am

Dear Mr. Gopal,

Thanks for such an informative article.
I want go for Aegon Religare for SA Rs. 40 lacs. But it’s Low CSR is an issue. If all in informations are given right & medical is also done, is there any posibility of rejection of claim. Can I insist for medical test even if it’s not in company policy.

Please reply

Reply

Gopal Gidwani July 4, 2012 at 3:53 pm

Hello Shubham,
If all the information given is right and medical is also done, then no company will reject the claim. Aegon Religare is no exception to this rule. So in case of Aegon Religare also if all the information given is right and medical is also done then they will pay the claim.

Whether you can insist on medical test even if it’s not in company policy, well I am not too sure on this part and you will have to get this clarified from Aegon Religare itself or the company that you intend to buy life insurance from.

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rohan July 9, 2012 at 9:05 am

Hello!

I was planning to increase my insured sum to a very significant amount before i hit on this blog i am a smoker and drinker and no LIC agent has ever informed me about claim rejection if it is true I should better invest my money in assets.

If any informative person could comment on this would be of some help.

Reply

Gopal Gidwani July 12, 2012 at 1:35 pm

Hello Rohan,
If an individual smokes and / or drinks, the life insurance company will not reject the claim, if the individual has disclosed all facts honestly at the time of buying the life insurance cover. If an individual smokes and / or drinks, at the time of accepting the life insurance proposal the life insurance company will charge the individual extra premium (known as premium loading) as compared to other people who are not engaged in these habits. Or the life insurance company will not accept the life insurance proposal at all if it feels the risk is too high. Also if an individual starts smoking and / or drinking few months / years down the line after buying the life insurance policy, still it does not affect the claim settlement of the life insurance policy already bought.
So make sure you disclose all relevant facts honestly at the time of buying the life insurance policy

Reply

rohan fernandes July 18, 2012 at 9:55 am

Thank you Gopal,
Will check with the agent if he has noted it on my form. and will keep this in mind while taking other policies.

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Sandeep July 20, 2012 at 11:26 pm

Dear Gopal,

My age is 29. and annual income is 300000.
you mostly suggest HDFC insurance. Its good but I would like to go with SBI life insurance smart shield.
Is my decision correct?
SBI is better than HDFC then why CSR report is lower of SBI?
I am confusing. Kindly guide me.

In advance Thanks.

Sandeep Patel

Reply

Gopal Gidwani July 21, 2012 at 10:45 am

Hello Sandeep,
I don’t what is your exact requirement or exactly what features are you looking for in a life insurance plan so I will not be able to comment on whether SBI Smart Shield is better for you or HDFC Click2Protect is better for you.

Reply

Mandar July 28, 2012 at 3:48 pm

Dear Sandeep,there are several methods to calculate the exact amount of coverage required. The proper need analysis done by a financial planner,taking into account your current assets,current and future libilities,your future goals etc.would help you understand the right amount of cover and the plan.

Reply

Amar Wadhwa July 22, 2012 at 5:47 pm

Dear Gopalji,

It is not only the ratio, but also the number of claims lodged/settled and also the quantum of claim amount paid.

It seems that the LIC is way ahead on es)bothe these counts from all other cos.

Further the prem amount by LIC (as well other cos) must have been based on some calculations (actuaries) and if it is so, there should not be much difference in their premium rates. If it is lower beyond certain limits,, can it be that they are relying on chance than the scientific calculation based on mortality?

Although IRDA is there to protect policy holders, in practice it may not be of much benefit. There are claims pending in litigations and it takes many years before any decision is taken! Many persons even do not go to consumer courts for contesting the rejection of their claims due to various reasons-mainly due to 1.Ignorance 2. long time taken and the money to be paid for claim consultants’ fees etc. this particularly applies for the death claims.

There is no major penalty on insurance cos even if claim is rejected on filmy grounds and the same is proved in court. Absolutely no personal punishment to the officer concerned.

So better to be safe and go with reputed cos. only.

Reply

Praveen July 27, 2012 at 11:38 pm

Thanks Mr. Gopal
The artical is very informative & best till i have found on net.

But pls tell the possible reasons for the claims are not settled & what purchaser can do to avoid it.
Thanks once again.

Reply

Gopal Gidwani July 29, 2012 at 1:17 pm

Hello Praveen,
Sometimes the claim is rejected after the insurance company during its investigation finds out that the insured did not disclose the correct age or did not disclose some important fact (example if he is suffering from some disease) at the time of taking insurance. Some times insurance companies also reject claims because the insured has not declared that he has insurance from some other existing life insurance company.

To avoid claim rejection the purchaser should make sure all relevant facts are disclosed in the proposal form.

Reply

Vishwesh Navare August 16, 2012 at 8:01 am

Mr. Gopal,
Your article is very informative and your research commendable. Thankyou for the article. I am 40 yrs old with income btn 5-6 lakhs. I will be going for a home loan of 25 lakhs next year this month. please advice which term policy/cies to go for . Also clearly advice the documents to be submitted for online Term plans and how to submit ?

Reply

Gopal Gidwani August 20, 2012 at 11:57 am

Hello Mr. Vishwesh,
I suggest you have a look at Click2Protect from HDFC Life.

With regards to documents, most life insurance companies ask for the following KYC Documents for online term plans:
1) Photograph
2) Photo ID Proof
3) Address Proof
4) Income Proof

With regards to submission of documents: Some companies ask you to upload this documents on their website at the time of buying the policy, some may ask you to email them the documents while some may ask you to submit the documents at the nearest branch while some may ask you to send the documents by post

Reply

Sandeep August 23, 2012 at 3:30 am

Hi Gopal,
I read your articles on insurance and I am rally impressed with the analysis done by you. You have explained concepts and compared the various plans in simple terms which a layman like me can also understand. Thanks for that.

I have 1 query – I want a term plan of 50 lakhs for 30 years (I am 32 and want insurance to cover max duration) which has following attributes:
– A renowned company
– Good settlement ratio
– Low premium
– 2 riders – Disability and Waiver of Premium

I believe that by taking plain term plan we cover a risk of not being in the world to earn but if the earning member is alive but cannot earn due to disability then life insurace is useless as policy ill lapse ‘coz there is no income to pay the premium. I have found that only Birla Sunlife fits into my criteria however its premium is ver high. It is almost double than HDFC term plan. Looking for your advise.

Thanks once again for guiding common people like me.

Thanks.

Reply

Gopal Gidwani August 24, 2012 at 8:02 am

Hello Sandeep,
When I analysed different term plans of different companies when I wrote this article
a) HDFC Click2Protect turned out to be good among plain vanilla term plans without riders and
b) Birla Sunlife Protector Plus turned out to be good among term plans with rider

So if you choose Birla Sunlife Protector Plus you will have to pay a higher price for the added rider benefit you are getting with the plan.

Both companies HDFC and Birla Sunlife fit your 1st two criteria of renowned company and good claim settlement ratio. For the 3rd criteria of lower premium we cannot directly compare HDFC and Birla Sunlife because the features of the 2 plans offered by the 2 companies are different. So it is not apple to apple comparison, rather it is a apple to orange comparison. With regards to the 4th criteria the two riders are offered by Birla Sunlife and not there in HDFC Life. So accordingly take your pick based on your need.

Reply

Sandeep Gupta August 25, 2012 at 10:59 am

Thanks a lot Gopal for replying to my query. I decided to go for Birla Sun Life. I have just 1 more query. How do you rate Bharati AXA? It has very low premium but has low settlement ratio as well (87% as compared to 95% of HDFC). Some people guide me to go for a company which is in core financial and insurace business like HDFC. In case of Bharati AXA, Bharati (indian partner) is no tin core business of finance and insurance. Your commnt on this logic would be very helpful.

Thanks again for your guidance.

Reply

Gopal Gidwani August 26, 2012 at 9:55 am

Hello Sandeep,
Bharti’s foreign partner AXA has a long history of being into insurance business. They are one of the biggest and most respected insurance companies in the world. With regards to their Indian venture with Bharti, it is true that telecom is the core business of Bharti and not insurance. Infact Bharti was in the news some time back when they were planning to sell their life insurance business to Mukesh Amabani’s Reliance Industries Limited. But there are companies in the market like Bharti, for whom insurance is not their core business, yet they have proved them in the life insurance business in the last few years. For example:
Tatas (insurance not core business) jointly with AIG
Bajaj (core business being automobiles) jointly with Allianz
Max (core business being hospitals) jointly with New York Life (now Mitsui)
All the above life insurance joint ventures have proved themselves and are doing very well even though the core business of the Indian partners is not insurance.

So in life insurance business, it is not necessary that the Indian company whose core business is finance will have an edge over other companies whose core business is not finance.

Now with regards to Bharti AXA, it is a good company but the only dampener is the low claim settlement ratio. I will personally go with a HDFC Life or Birla Sunlife, who have a high claim settlement ratio and these 2 companies have been there in the market since a long time and have established themselves

Reply

Shash August 25, 2012 at 7:37 am

This one of the excellent articles I have ever come across. Beautifully seggregated, simple to understand, and bundled with information.
And moreover you have answered all the queries. Great. Hats off..

Reply

Gopal Gidwani August 25, 2012 at 8:12 am

Hello Shash,
Thanks a lot for the kind words you mentioned about the article. I appreciate it a lot. Its good to know that you like the article. Request you to share it with family, relatives, friends and colleagues so that it will help them in buying the right insurance product based on their needs.

Reply

Raj Alva August 25, 2012 at 9:02 am

Hi Gopal,
Your article is good and informative. I read a lot and by far I found yours the best. Keep writing.

My age 33
Annual Income 12lakh
Location : Dubai( Past 3 months)
1. I have bought LIC Jeevan anand worth 5 lakh and Jeevan Shree worth 2 lakh both endowment plans 6yrs ago for 25 years. The premiums are Rs 25 k and 15k p.a. I have paid premiums for the first 2 years and discontinued. Now the status is in “Reduced paid up”. Im thinking of cancelling both these policies and going for pure term insurance plan. Kindly advise what I should do? Do I keep the LIC policies by paying the pending premiums or do I go for a new term insurance??

2. Since Im staying in Dubai is it adviseable to take a seperate CI ,accidental benefit rider and yearly medical policy or go for Birla Sunlife Insurance. Incase I go for the Birla Sunlife policy will they settle NRI claims?

3.Should I go for a 50lakh plan for 25years or a 1 crore plan.( I do not have any liabilities or assets as of today)
Would appreciate your valuable thoughts or advise.
Thank you in advance

Regards,
Raj

Reply

Gopal Gidwani August 26, 2012 at 9:30 am

Hello Mr. Raj,
Since the original term of the two endowment plans is 25 years and you have paid the premium for only 2 years, I would personally suggest not to continue with these plans and surrender them. I would recommend going for a term plan.

With regards to CI, health and accidental benefit, I would recommend you keep life insurance and health insurance separate. Go for a pure term life insurance plan with no riders. You can club the critical illness and accidental disability benefit with a medical insurance plan.

With regards to life insurance you can look at Click2Protect from HDFC Life or Protector Plus from Birla Sunlife. Most companies do issue life insurance policies for NRI’s. I am not very sure what are the additional (if any) terms and conditions for NRI’s. You will have to get this clarified from the life insurance company once you finalise the specific term plan of a specific company.

On your query on whether you should go for a 50 lakhs cover or 1 crore cover, I suggest you go for a 1 crore cover as your annual income is 12 lakhs and you still have 27 years of working life before you turn 60 years and retire. So you need to protect your future income even though you don’t have liabilities. Even if you don’t have financial liabilities I guess you must be having financial responsibilities like children’s education & marriage, spouse’s retirement, taking care of parents (as dependents), family living expenses. Life insurance is essential to take care of these financial responsibilities in the absence of the family bread earner.

Reply

Raj Alva September 8, 2012 at 7:11 am

Hi Gopal,
Thanks for the reply.
As per your suggestion and based on my analyse I decided go for HDFC click to protect plan. But as per their CC , they are not offering this product to NRI.
Only LIC, ICICI and Kotak is offering term plan to NRI.
Below are the premium details for 1 crore ( 25 years-term plan)
——————————————————————-
LIC ( Amulya Jeevan)–37,000 ( premium) ( 25 year) 96% claim settlement ratio.
Kotal E-term- 14,800k , 87% CSR +( stepup option for Rs750)
HDFC – click2Protect-13,500- 91%CSR
MetalifeAlico ( UAE based policy)-22,000 83%CSR
ICICI ( Icare)–18,000 -89%CSR( After filling the online form I got message stating”unable to process online, contact our sales representative”.
—————————————————————————
Conclusion:
1) Can I buy HDFC click2protect , during my 1 month vaccation stating I am staying in India?
2) LIC premium is high. Kotak is ok, but CSR not so great?
So I am confused…Pls suggest me.

Raj

Reply

Gopal Gidwani September 11, 2012 at 11:07 am

Hello Raj,
You can give first preference to HDFC Click2Protect. If that does not work out then you can go for Kotak. As long as the applicant declares everything correctly in the application form, the claim settlement will be done.

Reply

Justin Joseph August 25, 2012 at 2:50 pm

Hai Vikas,

My name is justin.Working in Oman last 6 years.Please share that NRI,s can purchase Term insurance? I am getting confusing answer regardding this subject.Thanks for your replay.

Reg
Justin Joseph

Reply

Gopal Gidwani August 26, 2012 at 10:45 am

Hi Justin,
It is very much possible for an NRI to buy a term insurance plan. Lot of insurance companies offer insurance products for NRIs.
LIC offers Jeevan Amulya for NRI. You need to fill the additional NRI questionnaire along with the other documents.

Apart from LIC, companies like ICICI Prudential and Kotak Life insurance also offer life insurance plans for NRIs.

I checked the Kotak website and they have listed Kotak Term and Preferred Term Plan under the section of products offered to NRI’s. Check the below link:
http://nri.kotak.com/investments/insurance

ICICI Prudential also has a NRI section as below
http://www.iciciprulife.com/public/Others/NRI-Corner.htm
But in this section they have not mentioned the specific products offered to NRI.

Life insurance companies have some restrictions with regards to NRI life insurance like:
Specific products are offered to NRI’s and not the complete range of products
There are restrictions country wise also. Certain product may be offered in some country and the same product may not be offered in another country
Products for which a medical test has to be given, such products can be bought when the NRI visits India

Reply

Sandeep Gupta August 27, 2012 at 3:02 pm

Dear Mr Gopal, I am in process of buying a term plan (HDFC) and a health insurance plan (Apollo Munich). I am sufferring from slip disc since last 2 years. Does it impact the 2 insurance policies in terms of premium, cover and something else?

Thanks.

Reply

Gopal Gidwani August 29, 2012 at 5:33 am

Hello Sandeep,
The effect of slip disc on premium will be more in health insurance as compared to life insurance.

You will be required to disclose that you are suffering from slip disc at the time of applying for insurance. The insurance company will ask you to go for a medical test. Based on the results of the medical test the company will decide whether the premium will be required to be increased and by how much. This varies from company to company in life insurance as well as in health insurance and depends on the underwriters of the insurance company. Underwriters are people who decide whether to accept the proposal and at what price. The company will send the revised proposal (if there are any changes) to you and accordingly you can take a call whether you wish to go ahead or not.

Reply

Ankit Gupta September 3, 2012 at 6:47 pm

Hey Gopal,

you are doing a good job, you never know but last one hour i am just reading your replies to all queries. It is very informative to all of us.

I am a 24 (Single) years old professional and doing job. Being i am the only son of my parents so i want to secure them by taking a term policy for them. Kindly suggest me about below mentioned queries:

1. For how long i should take a term plan
2. Whether a term plan cover all type of death excluding two three specific points as suggested by you earlier
3. I am thinking to take a cover of Rs 50 Lakh, should i take a single or multiple policies
4. Whether i can change nomination after some time or not
5. Whether term policy premium comes under the ambit of section 80C of Income Tax Act,1961 or not
6. Whether it is mandatory to undergone through all the above mentioned medical tests inspite of lower age group and the last but not the least which policy should i prefer…

Also if you can suggest me pls let me know one additional money back policy of LIC with this term plan having yearly premium of 20K to 30K

Kindly revert

Reply

Gopal Gidwani September 4, 2012 at 6:24 am

Hello Ankit,
First of all thanks for the kind words that you mentioned about me and my blog.

Now let me try and answer your questions one by one
1) You should take term insurance till your retirement. So if you plan to retire at the age of 60 years then you should go for term insurance for 36 years (60 – your current age of 24 years)
2) All term plans cover natural death. Death due to things like terrorist attack or war or some other things differ from plan to plan and from company to company. If you can mention those two-three specific points that you are talking about then I will be in a position to clarify
3) It is advisable to split the cover among 2 companies
4) You always have the option to change the nomination anytime during the tenure of the plan
5) The term plan premium is eligible for deduction from taxable income under Section 80C of the Income Tax Act. The premium should be 10% or less than 10% of the sum assured or the other way round the sum assured should be 10 times or more than the premium paid to qualify for Income Tax benefits.
6) Whether a person is required to undergo a medical test and which level of medical test is decided by the insurance company. The medical test decision normally depends on things like the health declaration made by the applicant in the insurance proposal form, the age of the applicant, the amount of insurance cover applied for etc. etc.

With regards to your query on which which term plan you should go for, I will suggest you have a look at Click2Protect from HDFC Life.

With regards to a money back policy, I will suggest for returns you invest in fixed income securities like PPF, NSC, Debt Funds or Bank Fixed Deposits. If you have a little higher risk appetite then you can look at investing in diversified equity mutual funds.

I hope I have taken care of all your queries!!!

Reply

jitendra kumar September 21, 2012 at 9:00 am

Sir ,I have a different kind of question ?? Plz reply
I have taken a “Profit Plus” LIC policy ( Fund type-Balance) in 2007. I have already paid all five Annual PREMIUM each of Rs 15000 ( So, total amount I paid Rs 75000). Should I continue this policy …?? or discountiue this policy and money get reinvested in any good Long term (10-15 years) Mutual fund ??

Reply

Gopal Gidwani September 21, 2012 at 11:49 am

Hello Jitendra,
If you have got good returns and are happy with the returns then you may continue with the policy. If you are not happy with the returns then you may consider not paying any future premiums and making the policy paid up. If you don’t want to make the policy paid up, then you may go ahead with surrendering the policy and investing the money in mutual funds. But before going for policy surrender give it a good thought if you really want to do it.
Also when you invest in mutual funds, consider investing through Systematic Investment Plans (SIP) rather than going for lumpsum investing

Reply

jitendra September 22, 2012 at 9:13 am

Sir,
Premium Paying term of the Policy was five year.I have already paid all five annual premium ( last premium paid was in Jan 2012 ) . at current NAV, the value of the policy o after five year is only Rs 79000 out of total money paid Rs 75000 . Rate of reurnt of the policy as shown in different website like Money Conrol….etc .is only 8 percent (annualised).
Sir , what to do with this policy ??

Reply

Amit Anand October 1, 2012 at 2:02 pm

Hi Gopal,

I read your articl…it is FANTASTIC..gives all the infromation about Term plans. I have finalised Birla Sun Life Protector Plus with Disability rider and Critical Illness rider. DO you suggest to go ahead with this or take Critical Illness rider with a health insurance policy + a separate Accident disability policy.

Reply

Gopal Gidwani October 3, 2012 at 4:17 pm

Hello Amit,
‘Protector Plus’ from Birla Sunlife is a good plan to go for. With regards to riders, if you don’t have a health insurance plan and are planning to buy a health insurance plan in the near future, then I will suggest that you buy critical illness rider as part of health insurance plan.
If you already have a health insurance plan, then you may buy ‘BSLI Critical Illness Rider’ with ‘Protector Plus’ from Birla Sunlife. But please bear in mind the Critical Illness Rider offered along with Protector Plus covers only 4 critical illnesses: Heart Attack, Cancer, Stroke and Major Organ Transplant. There is another rider by the name of ‘Critical Illness Plus Rider’ offered by Birla Sunlife. This rider covers 17 critical illnesses. But this rider is not offered under ‘Protector Plus’ Plan.

With regards to the ‘BSLI Accidental Death and Disability Rider’; you may go for it along with ‘Protector Plus’ Plan

Reply

Hanu October 8, 2012 at 10:03 am

HI Gopal,

That was an excellent article abt the term plans and related information helps to decide the term plans. I have few questions, can you pls answer,

1. Is there any limit on no.of term policies can anyone have ? Will that be an issue at the time of claim ?

2. Do u know what are the documents required to claim ?

Thanks much for your time.

Reply

Gopal Gidwani October 9, 2012 at 10:14 am

Hello Hanu,
A person can take more than one insurance policy. I am not aware if there are any limits on the number of policies that a person can buy. A person can buy multiple policies from the same life insurance company or multiple policies from different life insurance companies. Having multiple policies does not create any problem at the time of claim settlement.

Following documents are required at the time of death claim settlement
a) Duly filled claim form
b) Policy document
c) Death certificate issued by the municipal authority
d) Photo id proof of the nominee / beneficiary
e) Certificate from the doctor or hospital where the life assured was last examined

These are some of the documents that are requested by most life insurance companies for settling a death claim. The above is not an exhaustive list.
In case of death due to accident some more documents like FIR, Panchanama etc. are also required.

Check with the insurance company from whom you have bought or plan to buy insurance for specific list of documents required for claim settlement.

Reply

Sandeep Gupta October 10, 2012 at 11:31 am

Hi Gopal,

I have 1 question. Which are the companies which offer riders like Waiver of Premium, Accidental Death and Disability, Critical Illness etc in term plans.

Thanks.

Reply

Gopal Gidwani October 11, 2012 at 12:33 pm

Hello Sandeep,
a) ‘Protector Plus’ from Birla Sun Life offers all the 3 riders that you are looking for
b) ‘iCare’ from ICICI Prudential offers accidental death benefit rider
c) ‘Smart Shield’ from SBI Life offers Accidental Death Benefit Rider, Accidental Total and Permanent Disability Rider and Accelerated Critical Illness rider
d) ‘iTerm’ from Aegon Religare offers Accidental Death Rider, Waiver of Premium on Critical Illness Rider

Reply

Aditya Maheshwari October 11, 2012 at 9:52 am

Sir, i need an online term plan which have facility of monthly payment option. Kindly help.

Reply

Gopal Gidwani October 11, 2012 at 12:40 pm

Hello Aditya,
In online term plans, there are very few companies that allow monthly premium payment option because the premium amount is low and this increases administration cost for the insurance company. So some companies have a minimum premium amount; if the monthly premium amount goes above that limit then only they allow monthly premium payment option. You will have to check with the respective insurance company for that option.

The other option that you have is choose annual premium payment option with the insurance company from whom you want to buy the online term plan. Then divide your annual premium by 12 and deposit that amount every month in a recurring deposit. On maturity of the recurring deposit you can transfer the amount (minus the interest on RD) to the insurance company as annual premium. Only thing is in the first year you will have to pay the entire premium upfront.

Reply

Naresh Jesani October 27, 2012 at 4:17 pm

I want to purchase Life insurance for 1 crore. should I purchase from one company or from different companies. Whether it is correct that if one company is rejecting claim then other wil also reject. Somebody has suggested me for Aviva Ilife as premium is lowest in industry.

Kindly guide me.

Reply

Gopal Gidwani December 18, 2012 at 6:41 pm

Hello Naresh,
If you are planning to go for a cover of 1 crore, then splitting the cover in 2 parts will be a good idea. It is not necessary if one company rejects the claim, then the other company will also reject the claim. If a company rejects a claim then they have to give a proper, valid reason for the same.
You may look at ‘Click2Protect’ from HDFC Life.

Reply

Junagade November 1, 2012 at 6:48 am

Hi Gopal,

You have written very useful and excellent article, thanks for sharing information.

I have come across you blogs bit late, still I have a query. Just 2 week back, I have already proceeded to buy Term Policy from LIC – Amulya Jeevan and also goon through medical. Final result is still pending and will get in some days.

I want to your opinion, is it right choice. My age is 32 year and I have taken cover of 25 lakhs for term of 25 year, which has premium of 8,200 per year.

Also what details should I verify (as my LIC Agent has ask me to only sign on form and told he will fill other information) while filling the policy form and in policy document which I will receive once policy confirmed, to ensure that there are no problems at the time of claim settlement.

Reply

Gopal Gidwani November 7, 2012 at 4:14 pm

Hello Junagade,
An individual should always fill the proposal form on his own and not leave it to the agent to fill it.
Once you get the policy document you need to check whether all the disclosures are made properly like date of birth or age, health status, family history of illnesses (if any), details of existing life insurance plans, details of the new policy like the premium, cover, tenure etc. etc..

Reply

Srinivas November 6, 2012 at 10:36 am

Thanks for the perfect & all the information on one portal. Its very important to have all the information.
Planning to go for Term Plan shortly.

Reply

Gopal Gidwani November 7, 2012 at 4:10 pm

Thanks Srinivas for the kind words. Please share the article with friends, relatives, colleagues etc. so that they can also benefit from it.

Reply

Srinivas November 7, 2012 at 2:51 pm

Thanks for all the information one one page.
Planning to go for Term Plan for 50 Lakhs, age = 42 yrs , for term =20 yrs
Can you suggest a plan for me

Reply

Gopal Gidwani November 7, 2012 at 4:08 pm

Hello Srinivas,
You can consider ‘Click2Protect’ from HDFCLife or ‘Protector Plus’ from Birla Sunlife. Both the plans have a good claim settlement ratio and their premiums are competitive. If you want just a pure term plan with no riders then ‘Click2Protect’ from HDFCLife can be considered. If you are looking for a term plan with riders then ‘Protector Plus’ from Birla Sunlife can be considered.

Reply

Srinivas November 10, 2012 at 7:30 pm

Thanks for your suggestion. Will go by your recommendation
Rgds
Srinivas

Reply

sushil November 20, 2012 at 12:24 pm

Very informative comparision sir. Thank you

Reply

Aman Kumar November 24, 2012 at 7:31 am

Hi Gopal.. Nice and very informative article.

I have one query that the settlement amount which the nominee gets for a term insurance will be tax free or taxable.

Regards
Aman

Reply

Gopal Gidwani December 11, 2012 at 3:57 pm

Hello Aman,
The settlement amount of an insurance plan is tax free provided it fulfills certain conditions of the Section 10 (10D) of the Income Tax Act. One of the condition is the annual premium should not exceed 10% of the sum insured in any year. The other way round the sum assured should always be atleast 10 times or more than the annual premium for any year. This amendment had been introduced in Budget 2012. The earlier condition was the premium should not exceed 20% of the sum insured.

Mostly in term plans the annual premium is low and does not exceed 10% of the sum insured. So in that event the settlement amount will be tax free.

Reply

ARUN SHARMA December 5, 2012 at 5:24 am

Thanks Gopal for explaining all the doubts regarding Insurance.

Your efforts are tremendous.

Regards,
ARUN SHARMA

Reply

Gopal Gidwani December 11, 2012 at 3:20 pm

Hello Arun,
Thanks for the kind words. Request you to share the article with family members, relatives, friends etc. so that they can also benefit from it.

Reply

Sumit Bhatnagar December 5, 2012 at 1:14 pm

Hi Gopal,

This page is very very informative and I have shared it with many of my friends.
Thanks for providing tremendous info on single page.

I have one question: I have LIC Jeevan Anand policy (T. No. 149)
I am paying around 15000 premium per annum.
Now I am opting for LIC term insurance plan for 50 lacs, so should I discontinue with this policy as the sum assured is very low. Can you also tell me how much money will I get back in case I closed this policy. I would invest the amount in Mutual Funds for more returns.

Thanks in advance.

Sumit

Reply

Gopal Gidwani December 11, 2012 at 3:17 pm

Hello Sumit,
Before closing the current policy, I will suggest you first apply for the Term Insurance (Amulya Jeevan) policy from LIC. Once you get the new policy then decide on whether you want to surrender the existing Jeevan Anand Policy. The amount that you will get on closing the existing policy will depend on the surrender value of the policy. The calculation of surrender value depends on various things like total tenure of the policy, number of premiums that you have paid, surrender charge applicable etc. I suggest once you get the new policy you inquire with LIC about the exact surrender value of the existing policy and then take a decision if you would like to surrender it

Reply

praveen December 11, 2012 at 9:47 am

LIC is a 56 year old insurance company with high customer base,which means it has more old customer(senior citizen) base than any other insurance company so we can not compare this claim settlement with other pvt insurance companybecause they only have a 35to45 age people as a customer base .if they continued this for long run they get claim only — it cannot be settled they came here (INDIA)for business not service like LIC

Reply

Muddassir December 14, 2012 at 1:44 pm

Hi Gopal,

I am reading your site from past few days and its really awsome. You have made the decisions very clear where the prople have doubts…

I am planning to take online Pure term plan of Rupees 50 Lakhs with an Accidental rider of 50L ontop of it.
I am planning to take below
1. HDFC Click to Protect – 50Lakhs (No Rider is mentioned)
2. Aegon Religare OR BhartiAXA – 50 Lakhs cover with Accidental Rider

I have a doubt with the permanant Disability.. Which Online Term insurance plan give this as an additional Rider..
Please suggest your Priorities before I final my decision.

Thanks again for your Guidance..

Reply

Gopal Gidwani December 18, 2012 at 6:21 pm

Hello Muddassir,
For permanent disability rider check ‘Protector Plus’ Term Plan from Birla Sunlife. This plan offers ‘BSLI Accidental Death and Disability Rider’. You can read about this rider at the following link
http://insurance.birlasunlife.com/Pages/Individual/Our-Solutions/RiderDetails.aspx?riderName=BSLI%20Accidental%20Death%20and%20Disability%20Rider
Check if it meets your requirement.

Also please note that ‘Protector Plus’ is not an online plan but the premiums are competitive as compared to the premiums of other term plans.

Reply

Rajan December 18, 2012 at 9:58 am

Hi Gopal,

Have one question, LIC term plan also covers accidental death?

Reply

Gopal Gidwani December 18, 2012 at 6:23 pm

Hello Rajan,
I checked the information on LIC’s term plan i.e. Amulya Jeevan. I did not find any information about any riders being offered with this plan. You can check the details of this plan at the following link
http://www.licindia.in/amulya_jeevan-I_benefits.htm

Reply

Rajan December 19, 2012 at 3:56 am

HI Gopal,

I went through page you given and many more before I asked question to you.

many pages say, there is no rider offerred. However, just want to know, if I take this policy, and if my death happens due to accident, normal cover amount will be paid or not?

Reply

Gopal Gidwani December 20, 2012 at 7:36 am

Hello Rajan,

The simple one line answer to your question is ‘YES’ the normal cover amount will be paid irrespective of whether death happens due to accident or some other reason (covered in the policy terms and conditions).

To clarify your doubt let me take a scenario
Mr. ABC has bought a policy with a base sum assured (SA) of say Rs. 50 lakhs. In this case if Mr. ABC death happen due to accident or normal death, the base sum assured (SA) of Rs. 50 lakhs will be paid to his family.

Now let us assume Mr. ABC has bought a policy with a base sum assured (SA) of say Rs. 50 lakhs and an Accidental Death Rider for an additional amount of Rs. 10 lakhs. So in this case the total cover is Rs. 60 Lakhs. In this case if Mr. ABC’s death is normal death and not accidental death, then the family will be paid Rs. 50 Lakhs. If death happens due to accident then the family will be paid Rs. 60 lakhs.

Now coming to answering your question. In the scenario that you have mentioned there is no accidental death rider. So even tough the death happens due to an accident, still the base SA will be paid irrespective of whether Accidental Death Rider is there or not.
If Accidental Death rider is there, then in case of death other than accident, only the Base SA will be paid and in case of death due to accident, the base SA + Accidental Death Rider amount will be paid.

I hope I have clarified your doubt. If not please do write back.

Thanking You!

Reply

Rajan December 20, 2012 at 9:39 am

Thanks Gopal,
This detail answer is very very clear. Thanks for detailed response on this.

One more thing I wish to ask you. LIC Jeevan Saathi is for husband and wife. It offers rider which is called as ‘DAB (Double Accidental Benefit)’. I am consused about word ‘Double’.

If for eg., both husbannd and wife are insured for 1 lac and taken DAB worth same amount cover,

does it mean,
1. in case husband/wife dies in accident, inital 1 lac + 2 lac will be paid for rider to spouse or
2. initial 1 lac + 1 lac rider amount will be paid and thus word Double is used to show only that, the rider is provided to 2 persons.

I hope my question is clear.

Prem Kumar December 22, 2012 at 2:27 pm

Hello Gopal

Thank you very much for the enormous input regarding term insurance plans. I gone through every comments for almost an hour. I appreciate your patience for replying to each and every one’s query. Could you help me in choosing a term plan? I’m 25 years old. I’m a non smoker, non drinker. I’m looking for a term plan of 30 years duration and a cover of 50 lakhs. How about Kotak Preferred term plan (Suggested by an online broker). The premium is low and the CSR is good as indicated by you. Do I have to provide an income certificate, ( Just started up my work in dad’s business) and do I have to undergo medical test? Thank you.

Reply

Gopal Gidwani December 23, 2012 at 8:34 am

Hello Prem,

The ePreferred Term Plan from Kotak Life Insurance is a good choice. You may go for that plan. ‘Click2Protect’ from HDFC Life is another good recommendation. You may choose any of the 2 that you are okay with.

With regards to income certificate, well it depends on the financial underwriting parameters of the insurance company. It depends on the insurance cover (sum assured) requested by the client and some other parameters. Some companies may ask for it and some may not ask for it. Basically the income proof is asked because the insurance company needs to make sure that the premium paying capacity is there.

Medical Test depends on the age of the individual, insurance cover (sum assured), declarations with regards to self health and family history of diseases made in the proposal form and few other things. This again varies from company to company.

Reply

Srinivas December 25, 2012 at 12:45 pm

Thank you very much Gopal for such an informative article.
My research in finding a good insurance plan ended here.

Reply

Gopal Gidwani January 3, 2013 at 5:58 pm

Hello Srinivas,
Its good to know the article was useful to you and helped you choose the term plan you wanted to buy. Please share the article with others so that they can also benefit from it.

Reply

Prasad December 26, 2012 at 12:35 pm

Dear Gopal,

I read your article ‘Claim settlement ratio for life insurance companies for 2010-11, it is like a oasis in the desert of term insurance. I appreciate your extensive work and presentation. I wish that you will make these types of presentations in future.

In this scenario I want to bring my current status. I request your advice in proceeding for taking term insurance policies. Since, I am in a bit confused state. Whether my insurance policies already covered under any term insurance policy or I need to take any new term policy. Please go through below details and advise:

“Family consists of self 44 years, spouse 34 years and 2 children (15 years and 10 years).

Dependent parents who are not covered in the below mentioned any policy.

1.Aviva Freedom Life Advantage Policy Jointly with my wife for 15 years and SA Rs.3.94 Lacs
2.LIC – Jeevan Suraksha, Jeevan Saral, Jeevan Saathi (with spouse), Jeevan Mitra, Jeevan Chhaya – for a term ranging 20 – 30 years – SA Rs.7.25 Lacs
3.LIC (policies in Spouse name) – Jeevan Saral, Bhima Gold – for a term ranging 20 – 25 years – SA Rs.7 lacs
4.Health (Medi claim) Insurance with New India – family floater – SA Rs.5 Lacs
5.Health (Group Accident & Sickness Hospital Cash) insurance with TATA AIG – family floater – SA (this policy covers hospital indemnity for accident Rs.3.60 lacs, hospital indemnity for sickness Rs.1.80 lacs, Accident medical expenses re-imbursement Rs.0.27 lacs for self and spouse same amount but for children it is 50% of our coverage)
6.Income Guard Plan – TATA AIG – family – SA (which covers AD for self Rs.20 Lacs + DD for self Rs.40 Lacs + PTLU for self Rs.20 lacs and for spouse 50% of self and for children 10% of self)
7.Home protection plan policy with TATA AIG – for Home protection Rs.2.50 Lacs, Home protection while you are away Rs.1.25 Lacs, Money & Cheques sub limit Rs.0.10 Lacs
8.Personal protection policy with ICICI Lombard for SA of Rs.5 Lacs (this policy covers Death resulting from Accident 100% of SA and Permanent Total disablement resulting from accident 100% of SA)
9.Apart from the above there is a coverage to my four wheeler which also includes PA for Rs.2 lacs which is with ICICI Lombard

As per the company policy, my company is providing medi-claim coverage to my family and to my dependent parents.

My annual income is Rs.15 lacs and I have outstanding housing loan amount of Rs.7.50 lacs which is to be repaid in next 10 years this loan is having insurance coverage with HDFC. My children higher education will start in another 2 years.

Based on above I request you to advise whether I have to take any online Term plan.

And also suggest which online term plan is good and what is the desired sum assured amount I have to take and I am interested to take the same for 14 years.”

I am very much thankful to you for your guidance.

Regards

Reply

Gopal Gidwani January 4, 2013 at 5:57 pm

Hello Prasad,
I see that you have multiple life insurance policies, but the total life insurance cover is inadequate. Life insurance sum assured should protect future income (14 years in your case), financial liabilities (home loan and any other loans) and financial responsibilities (children’s education and marriage).

In your case home loan is covered. But the other existing life insurance policies that you have do not adequately cover your future income (15 lacs per annum growing at approx 5% or 10% annually for the next 16 years: your current age is 44 years) and financial responsibilities (children’s education and marriage).

If you don’t have the exact numbers with you, then you may consider a ballpark figure of Rs. 1 crore or Rs. 1.5 crore life insurance cover.

With regards to choice of plans: I suggest you consider
‘Click2Protect’ from HDFC Life or
‘Protector Plus’ from Birla Sunlife or
‘ePreferred Term’ from Kotak Life

All the above are good plans

Reply

Vikas December 31, 2012 at 11:24 am

This is a very nice and detailed article about available Term plan options for an individual. Term plan is very very important and one should get himself insured enough by doing proper analysis (of current and future income, assets, future liabilities, family, children etc) at earlier age (~25 years). I was informed about term plan but didn’t buy sufficient cover (bought only 25L cover at the age of 25 years).

Now I am 32yrs and after doing thorough research (also talking to few insurance agents from different companies and financial advisers) I found that I need at least 2-3cr insurance cover, had I done this analysis at 25 yrs of age correctly then I would have got the same cover at much lesser rate. Nonetheless I realized my mistake and plan to go for at least 1.5-2cr of term plan. Next dilemma was to buy which term plan as market is already flooded with so many plans having some pros and cons. Whether I should look at premium or CSR (whether CSR numbers reported by IRDA are correct, do they make any sense at all, as all claim settled by insurance company are not only for term plan) history of insurance company, trust, riders etc etc.

Hence I decided to go for two term plans as suggested by Gopal and other peoples here:
1. I got a 50L term plan from LIC (for good CSR, trust, being here for 100+ years, largest insurance company in India). I went with only 50L cover with LIC because of high premium rate.
2. I got 1cr cover from birla sunlife – protector plus plan (good CSR and good riders option particularly premium waiver option)

Reply

Gopal Gidwani January 3, 2013 at 5:43 pm

Hello Vikas,

Good to know that you found the blog post useful and it helped you in deciding which insurance policy to go for. Please share the article with others so that they can also benefit from it.

Your choice of combination of LIC and ‘Protector Plus’ from Birla Sunlife is a good combination.

Reply

Priya January 2, 2013 at 7:07 pm

Hi

I must say.. this is one of the best posts on term insurance plans.. kudos :))
I need some guidance from you in this regard:

I am a 25 yr old Female. I am currently looking for a policy/ 2 offering a sum insured of 1CR.
I am stuck with the following options :
1. AEGON ( I know CSR is an issue.. but 6/7 seems ok ) – Should I consider taking a 1cr policy with AEGON alone ?
Premiums and the riders are tempting. Also the coverage till 75 years. I am not too happy abt the 30 years coverage which others offer.

2. Shoud I split the 1CR amount between-
AEGON / AVIVA – 50 lacs
HDFC / AVIVA – 50 lacs ( better CSR and HDFC being quit stable )
which option and plan should I choose ?

I earn between 7-10 lacs. I think I will have to take a policy later in my life for an additional 50 lacs/ 1 CR. I have no term ins policies as on date.

Keeping the above and the additional sum assurance which I shall take later ( 5-8 years) , I would greatly appreciate if you could help me with these choices.

Thanks in advance ! Please advise ASAP

Reply

Gopal Gidwani January 3, 2013 at 5:39 pm

Hello Priya,
I will suggest you go for a combination of HDFC and Aegon Religare.

‘iTerm Plan’ from Aegon Religare will cover you till the age of 75 years along with riders; besides ‘Click2Protect’ from HDFC offers a combination of competitive premium and very good claim settlement ratio.

Don’t worry about the lower claim settlement ratio of Aegon Religare. If you declare all material information in the application form honestly and correctly, then no insurance company will deny claim settlement.

Reply

satinder January 3, 2013 at 7:07 am

Thanks Gopal for this illustrious information.I have selected kotak e prefferred
plan. 47yrs age/13yrs term/non-smoker/occassional drinker/Healthy male.
Annual premium 8202.Please comment

Reply

Gopal Gidwani January 3, 2013 at 5:27 pm

Hello Satinder,
ePreferred Term Plan from Kotak Life is a good choice.

You have not mentioned the insurance cover amount that you are planning to go for. Make sure the amount is good enough to cover your future income of 13 years and good enough to cover your financial liabilities (home loan and any other loans) and financial responsibilities (children’s education and marriage).

Reply

Krishna January 3, 2013 at 11:10 am

Hi Gopal,
I am 28 years old . I all looking for term plan with cover of 1.2 crore for a period of 35-45 years. If i choose offline policies premium is too high , Online polices are cheap and considerable. Policy tenure is limited to max of 30-35 years in most of plans, where i would be around 58-63 by that time . What do you suggest me to do. Should I split it into 2 policies . Or wait for better online plans in future ..like LIC

Reply

Gopal Gidwani January 3, 2013 at 5:23 pm

Hello Krishna,
You may go for an online policy that will provide you cover till the age of 58-63 years.

By the time you reach the age of 58-60 years, you will be retired and would have taken care of all your financial liabilities (home loan and any other loans) and financial responsibilities (children’s education and marriage). So at that age once you are retired and have discharged financial liabilities and responsibilities, you will not need insurance beyond that age. Insurance is needed for future income protection and to protect family from financial liabilities and responsibilities.

LIC announced that it is coming up with an online term plan long time back. Since then there is no update on it. So you need not wait. You can go for a term plan from HDFC Life (Click2Protect Term Plan) or Birla Sunlife (Protector Plus Term Plan) or Kotak Life (ePreferred Term Plan).

You may consider splitting the total cover of Rs. 1.2 crore among 2 term insurance plans of different companies.

Reply

Ram January 4, 2013 at 4:26 am

I am trying to getting insurance 3 policies – 2 policies from LIC, and the 3rd from a Private Insurer. The reason for doing so, the restriction of the Sum assured that can be provided in the 2 LIC policies for my fathers age – its for my father aged 59 (still working, and we have personal reasons for seeking insurance for him).
So, please advice if there is any issue in holding 3 different policies for a single person – will it lead to any issues at the time of the insurance claim?

Reply

Gopal Gidwani January 4, 2013 at 5:41 pm

Hello Ram,
There won’t be any issue in holding 3 different life insurance policies for a single person. A person is allowed to buy multiple life insurance policies. There won’t be any problem at the time of claim settlement due to multiple life insurance policies.

Reply

Gopal Gidwani January 12, 2013 at 7:32 pm

Hello Everyone,
We now have the Claim Settlement Ratios for 2011-12.

http://www.bachatkhata.com/2013/01/claim-settlement-ratio-for-life-insurance-companies-for-2011-12.html

In this link you can read about the comparison of claim settlement ratios for life insurance companies for the last 3 years (2009-10, 2010-11 and 2011-12) and the premiums charged by these companies for their term plans. We also present a comparison of the features of various term insurance plans offered by different companies.

Enjoy Reading!

Best Regards
Gopal Gidwani

Reply

faruk January 28, 2013 at 12:47 pm

hi
very nice article really very useful for who are going to buy iterm plan.
please provide details about tata aig term plan iraksha .is it good company for setllement as well as for feature concern (special at age of 40 – we can choose 40 years term
thanks

Reply

FARHAN February 18, 2013 at 5:47 am

Hello GOPAL sir,
I have four term insurance plans from different insurers.My total term insurance coverage is Rs 5400000 FIFTY FOUR LAC RUPEES.my annual income is 200000 TWO LAC RUPEES.My query is
1. Is I am over insured?
2. Is any insurance company raise any problem at the time of claim?
3.let me know what is exact insurance cover need for me.
4.Is any mandate to inform insurance company if i have change my life style. i..e I am using tobacco..alcohol etc?

THANKS IN ADVANCE.

Reply

Gopal Gidwani April 14, 2013 at 7:44 am

Hello Farhan,

With an income of 2 lakhs per annum, you seem a bit overinsured with a total cover of 54 Lakhs (27 times your annual income). Normal I come across many cases of people who are underinsured. But yours is the first case where a person is overinsured ………. 🙂

The insurance companies will not create a problem during claim settlement as long as you have declared your previous insurance policies to every new insurance company. For example:
Insurance company 2 knows about insurance policy taken from insurance company 1
Insurance company 3 knows about insurance policies taken from insurance companies 1 and 2
Insurance company 4 knows about insurance policies taken from insurance companies 1, 2 and 3

Ideally you should have insurance cover that is 15-20 times your annual income. There are other methods of calculating how much insurance cover an individual should have based on the human life value (HLV) concept. You can read more about it at the below link
http://www.bachatkhata.com/2009/12/human-life-value-how-much-are-you-worth.html

Details about change in lifestyle like smoking, drinking, consuming tobacco need to be disclosed to the insurance company everytime at the time of taking a new policy. If you have already taken a policy and then there is a change in lifestyle then you don’t need to inform the insurance company.

Reply

vishwajeet February 21, 2013 at 10:56 am

respected sir,

I have a term plan of ICICI life insurance of 50 lak with accidential rider from 2012. But for this policy they didn’t ask me for Medicat Test. When I ask them for medical test ,they just said to me that as your age is 30 and with respect to your ht,wt we don’t need to undergo medical test.
Now I am much worried about the two factors below.
1)May they decline my families claim on the basis of MEDICAL TEST?
2) or I take the policy of a insurance company who give me policy of same amount on behalf of MEDICAT TEST?

Reply

Gopal Gidwani April 14, 2013 at 7:32 am

Hello Vishwajeet,

You need not worry because you were not asked to take medical test. Insurance companies decide on whether to ask the person to go for a medical test or not based on certain factors. Some of these factors include but not limited to:
a) Age of the person
b) The insurance cover asked for
c) Information given in the proposal form
d) Other factors the company may decide from time to time

In your case based on the above factors the company may have felt that a medical test is not required so they did not ask you to go for it. So you need not worry. The company will not decline the claim because you have not undergone medical test.

Just make sure all the information declared by you is correct and you have not hidden any important / critical information from the insurance company irrespective of whether the insurance company has asked for that information or not.

Also you need not go for another policy and retain the existing policy

Reply

Priya March 6, 2013 at 7:41 pm

Hello Gopal,
Thank you for a very informative article.
My husband is 30 now and needs a term plan (1 crore cover) and a critical illness cover as he is diabetic. Do you recommend combining term plan with a rider for critical illness coverage or do you suggest term plans be delinked from medical insurance plans? Which term plan would you recommend in my case?

Reply

Gopal Gidwani April 14, 2013 at 7:04 am

Hello Priya,

I would suggest you take a term plan and a separate health plan with critical illness rider.

For term plans you may consider Click2Protect from HDFC Life or ePreferred Term from Kotak Life or Protector Plus from Birla Sun Life

For health insurance you may consider plans from Apollo Munich or Max Bupa. Their plans come with life long renewal.

Reply

Viknesh April 5, 2013 at 7:21 am

I feel most of my queries has been answered after reading your article and it is really great that you have provided the information and I passed this link to my friends..

I am 25 years old and looking for 1 crore term plan.. My query is I am a smoker (3-4/day)now and for this I have to pay almost 12,000. What if I stop smoking after 2 years… For example, I am taking a plan with Aegon or Bharthi Axa now as smoker and then after 5 years, I want to take a plan as non smoker (since I stopped it after 4 years mean I din’t smoke for last one year) with Birla Sun Life insurace.. Will Birla Sun life inusrance check my previous life insurance and reject mine?? Would be great if you help me.

Reply

Gopal Gidwani April 14, 2013 at 5:42 am

Hello Viknesh,

It is good that you are planning to give up smoking.

If you go for a new plan after say 5 years, as a non-smoker your premium will be less than that for smokers. But also bear in mind that in those 5 years you will be older by 5 years and hence the premium for the new plan will be higher than the older plan due to the increased age.

Also at the time of taking the new plan, you will be required to undergo a medical test. From that the insurance company will be able to test whether you smoke or don’t. So there is no case for rejection based on the previous life insurance.

You may compare the premiums 5 years down the line for a non-smoker plan at that point of time compared to your existing plan and accordingly take a call whether to take a new plan (non-smoker) or continue with the existing plan.

Reply

AVIVA - ILIFE May 10, 2013 at 3:08 am

Hi Gopal,

Could you please guide me for term plan, I am thing to take 1.50 cr. of Ilife – Aviva
Regards,
Santosh S.

Reply

Gopal Gidwani June 16, 2013 at 10:25 am

Hello Santhosh,

I would suggest you take a look at the following plans: Click2Protect from HDFC Life, eShield from SBI Life, ePreferred Term from Kotak Life or Protector Plus from Birla SunLife. All these plans have good features with competitive premiums and the companies have a good claim settlement ratio

Reply

Ashok Gupta June 22, 2013 at 8:06 am

Dear Sir,

i am intrested to take a term plan of Rs. 25 lakh with some rider like parmanent disability and health so please suggest me a good plan which can fulfill my all requriements.

Reply

Muthukumar July 3, 2013 at 3:56 pm

Hi Gopal,
Kudos for such a nice,informative and useful article. Let me share my bitter experience with AVIVA i life online term policy.Everything was nice until I paid my basic premium Rs.8200 and got my medicals done.AVIVA sent a mail stating that my premium was hiked 50% as they diagnosed me having diabetes according to my medical synopsis. I got a copy and found that my sugar values were quite NORMAL! I asked Aviva for specific answer to my query that how they decided I have diabetes. They replied now that I am prediabetic! as i had impaired fasting blood glucose.My medical synopsis sent by AVIVA reads my fasting blood glucose as 80mg/dl which is very much normal.Again qoting the values I asked what value is considered normal by AVIVA.They replied again by cut and paste the same words they sent earlier without stating specific values. I wonder how AVIVA alone can deviate from a universal medical fact just for the sake of charging extra premium.Frustrated at their indifference I withdrew my proposal though I am informed that I will lose Rs.2200 towards medical tests.My question is if AVIVA says that I am prediabetic should they not answer my question of what they consider normal? Is it not unfair to quote wrong reasons to hike the premium?Any way to sort this out?

Reply

abhishek S. Chauhan July 11, 2013 at 9:19 pm

Hi, First of all i am highly thankful to u for this information. but i read it now when i already submit fees (5700) for i term plan of Religare aegon but document submission and medical is still pending so now please suggest me that i should continue with this plan (as its on line term plan show 91% CSR) or i should move for HDFC Click 2 protect.
Pls. reply asap as company continueously follow up with me for document submission.

Reply

Kamal Shah July 26, 2013 at 12:17 pm

Hi Gopal,

Want to buy Term Plan.

Only for clarification
1)what is exclusion related to suicide means?
2) premium of term plan with rider will remain constant in case you avail benefit under critical illness rider
3) under premium waiver, how does it work
4) in case you opt for 2 companies, disclosure to both is required, in case its not disclosed for general reason will it have impact on claim?

Kindly reply for understanding & finalising the term plan more deeply.

I am a finance guy & wants to understand the concept in depth.

Regards,

Kamal Shah

Reply

Gopal Gidwani September 25, 2013 at 4:23 pm

Hello Kamal,
Suicide exclusion: It means that if the death of the life insured person happens due to suicide in the first year of the policy, then the life insurance company will not pay the claim.
Waiver of premium: If the insured becomes disabled and loses his source of income and is not able to pay the premium, then under this clause, the life insurance company waives off the premium and the policy continues as normal
In case life insurance is bought from 2 companies, then you need to disclose the 1st policy details to the second life insurance company. This is very important. If this is not done, the 2nd life insurance company can reject the claim.

Reply

indrajeet singh yadav October 4, 2013 at 2:16 pm

Hello sir I am a 30yr businessmen i want a term plan of 50 lac .which company I go through with is it kotak,lic or any company pls suggest me.

Reply

kailash dave October 10, 2013 at 1:44 pm

sh.gopla ji
please suggest me term plan my age 39 complete & my anuual income rs.5 lakhs my lic insurance total rs.1 lakhs jeevan sathi & 1 lkha jeevan anand & 1 lkahs holl life policy & medicilam rs.1.75 lakhs i am applay for 50 lakhs for aviva i term plan for 32 years
please suggest me how many company term plan purchases

from kailash dave

Reply

Manish Raghav February 13, 2014 at 8:50 am

Thank you so much Gopal Ji, for sharing valuable information with us. I appreciate your efforts and hard work.

Thanks and Regards
Manish Raghav

Reply

Gopal Gidwani March 2, 2014 at 9:30 am

Thank You Manish for the kind words. Please share the website url with family, friends and colleagues so that they can also benefit from it

Reply

Gopal Gidwani July 18, 2012 at 9:11 am

Hello Atul,
Some of the reasons that I can think of include:
– Under-reporting of age at the time of buying insurance to get insurance at a lower price
– Hiding some fact at the time of buying insurance like not disclosing a pre-existing disease or hiding family history of disease/s
– Death due to some exclusion like suicide in the first year, death due to war (in not included in the policy term)
– Policy not valid at the time of claim. For example policy has lapsed at the time of claim or premium has not been paid
– Any other reason which is not covered as per the terms and conditions of the policy

Reply

Gopal Gidwani July 18, 2012 at 9:16 am

Hello Satyam,

If you buy the policy through an agent the premium will be higher than the online premium.

Also once you pay the premium online, you may be required to undergo a medical check-up. If the medical test is okay then there will be no increase in premium. If something is pointed out in the medical test then the company will increase the premium and inform you. Then you can decide whether you would like to go ahead with it.

One more thing that I can think of for the difference in the premium can be the service tax. The individual who told you the premium may or may not have included the service tax

Reply

Vikas July 18, 2012 at 10:43 am

Hi Gopal,

Here I want to add some information about HDFC – Click2protect term plan.

One can enroll online plan in two ways. If one applies by using his self created login, the premium is the lowest. Alternatively, there are HDFC agents who make you sit with them and they apply on your behalf using their AGENT login. In this second scenario, the premium is increased. Both of these are the same online plan.

My agent didn’t tell me this info, but I found out and refused to apply the online plan through him.

Reply

Gopal Gidwani July 18, 2012 at 11:02 am

Hi Vikas,
Thanks for the information. I was already aware of this. But the information will certainly help the other readers of the blog

Reply

Gopal Gidwani August 24, 2012 at 7:31 am

Hello Ankur,
I suggest you club your critical illness rider with your health insurance policy.

With regards to Accidental Death Benefit (ADB) Rider, if you are looking only for additional death benefit then you can club this rider with your term plan. If you are looking for disability benefit, then it is advisable to have a separate Accidental Policy. The annual premium for Accidental Policy is low.

Now let me address your second query with an example.
Some riders like critical illness rider have a age limit like term insurance plans. So if a term plan has a maturity age limit of say 65 years. Assuming your age is 40 years and the maximum allowed tenure for the term plan you intend to buy is say for example 30 years. Then you will be able to buy this policy only for 25 years till you reach the age of 65 Years (maturity age limit of say 65 years). Now say the company is offering critical illness rider and the maximum maturity age limit for this rider is say for example 60 years, then you will be able to buy this rider along with the term plan for 20 years. So in effect the critical illness rider will end when you reach the age of 60 years and the term policy will continue for another 5 years (without critical illness rider) and the term policy will end at the age of 65 years.

So to conclude the term plan can continue even if the rider ends before.

So if a rider maturity age comes before the term plan maturity age, the rider terminates and the policy continues till the policy maturity age.

Reply

Ankur Singhal August 25, 2012 at 2:21 pm

Thanks Gopal for explaining all the doubts regarding Insurance.

Your efforts are tremendous.

Regards,
Ankur

Reply

Gopal Gidwani August 26, 2012 at 10:15 am

Hello Ankur,
Thanks for the kind words. Request you to share the article with family, friends, relatives, colleagues etc, so that they can also buy the correct insurance plan that suits their needs.

Reply

Gopal Gidwani April 11, 2012 at 5:48 am

Hello Manoj,
If HDFC people have agreed, then you can go for Click2Protect plan. You have mentioned your current age is 47 years, so even if you get insurance for 15 years it is fine, because most people need insurance till the age of retirement i.e. 60 years. In your case your retirement is 13 years away.

Reply

Gopal Gidwani April 11, 2012 at 6:58 am

Hello Vikas,
It is good to know that HDFC Life people are re-starting your case. But as you mentioned in one of your previous post, check if there is an increase in the premium due to increase in age as you have already crossed your birthday. Also please keep me informed about the status just for the benefit of the other readers of the blog.

Reply

Vikas April 11, 2012 at 7:21 am

Hi Gopal,

During the first phone call, they informed me that they will re-start my case. I was told to start a fresh application, which I refused because I crossed my birthday.

In second phone call, I was told to submit a cheque with the original premium amount against the original proposal number. I asked for an email too, which I mentioned here in my previous comment.

Reply

Vikas April 24, 2012 at 8:37 am

Hi Gopal,

My HDFC Click2Protect policy has been issued. The premium is the same as earlier. They have processed the same application.

What are the things I should verify in the policy schedule? I could not find any discrepancy as per my knowledge.

Regards,
Vikas

Reply

Gopal Gidwani April 25, 2012 at 7:24 am

Hello Vikas,

It is very heartening to know that HDFC Life has processed the earlier application and issued the policy on that basis of it.

Few things that you need to look into include: premium payable, cover amount, tenure of the policy, any specific exclusions that you are not aware of, any other terms and conditions etc…. etc…

Reply

Gopal Gidwani December 20, 2012 at 4:36 pm

Hello Rajan,
I would suggest you go for individual policies for self and spouse.

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