Last year I wrote an article “Best Term Insurance plans in India (After 1st Jan 2014)” after IRDA changes. However, I found that from that period insurance companies launched many more term plans. Therefore, I thought to update the list by writing a post on this.
Note-Updated my choices of “Top 5 Best Online Term Insurance Plans in India-2016“.
Before proceeding further, first have a look at where individual insurance companies stand when it comes to claim settlement ratio. I already published the latest IRDA data in my earliest post ” IRDA Claim Settlement Ratio 2013-2014-Which is best Life Insurance Company?“. However, I will update the same and share with you all in below image.
Note-Recent update regarding claim settlement ratio from IRDA.
You notice that LIC tops the list. However, how many term insurance claims all these insurance companies settled is still undisclosed. Hence relying on the claim settlement ratio alone is not worth. Instead, you must check the premium affordability, your comfort with the company, their service availability, and features.
I strongly advocate the idea of buying plain vanilla term insurance. If you add any riders like accidental or critical illness, then there are so many limitations to it. Instead, if you buy them separately from General Insurance Companies then you will get more featured standalone product.
What will be ideal term?
Before understanding, let us first understand the importance of life insurance. When you are buying life insurance, keep it in mind that it is pure term insurance. Therefore, you will not receive any return after policy maturity. You are replacing your future earnings, current liabilities, and financial goals in current terms. Hence, the ideal insurance coverage must be up to your retirement age.
Because once you retire then your earnings will stop. Almost all financial goals like kids’ education or marriage will be at an end. That is the reason I suggest to have term insurance up to retirement age. There may be so many theories, which differentiate from my view. But majority of experts agree with what I am saying. Therefore, I have listed few reasons, which makes you to restrict your term insurance to till your retirement age.
- Your working life ends at retirement. Therefore, no earning means no insurance.
- By the time you retire, your major responsibilities like kids’ education, marriage, or retirement corpus creation are almost achieved.
- Usually insurance companies also offer term of up to 65 to 75 yrs of age only. The term insurance of Rs.1 Cr or Rs.5 Cr seems to be a huge amount. However, the same will not be at the time of your retirement.
What factors matters you to choose the term insurance, which you feel BEST?
- Premium-You are opting for online term insurance only to save few thousands. So obviously, you must look for cheap and affordable to your pocket.
- Comfort with company-Few may have bad experience with a particular insurance company. So if you are not comfortable with that particular company then better to avoid it.
- Features-Select the company which suites your plan requirement like age or the frequency of payment.
- After sales service-This must be your priority. Because the claim will in your absence. Hence, choose a company, which you feel best in service.
- Claim Settlement Ratio-This gives a small glimpse of best insurance company. However, as I said above, this must not be the sole criteria to choose term insurance. Because data is not so authentic to judge.
Based on above features and requirement you can opt your BEST term insurance. Below are the term insurance products of all insurance companies.
In the above table of claim settlement ratio, I mentioned 24 companies’ data. However, while preparing table for term insurance, I neglected few. Because few new companies are not having term insurance or few not offering any online term insurance. In addition, I selected pure term insurance excluding riders, premium return plans or any other additionally featured plans.
Hope this information will suffice in short listing your term insurance easily.