Dear Basu Sir,
IDBI Federal has recently launched an Online Term Insurance called IDBI Federal iSurance. It looks very cheap (1Cr cover for Rs.6954/- annual premium, including taxes!).
In their description of death Benefit, they have mentioned – In case of your unfortunate death during the policy term we will pay your beneficiary the highest of the 3 amounts given below:
- Life cover as chosen by you
- 105% of all the premium paid till the date of death
- 10 times the annual premium (if you are less than 45 years) or 7 times the annual premium (if you are 45 years or above)
I did not understand the above clearly, because, Point 2 and 3 can never be greater than point 1, then why even mention them? or is there any other meaning, which I am not able to understand?
Anil-You no need to worry about this. The minimum assurance for you is the sum assured you opted. I know it confuses many. But such rules of minimum guarantee of claim are made to protect buyers, which are mainly meant for regular endowment or ULIP plans. Hence, no need to confuse, in term insurance you can assume that minimum will be the sum assured you opted.