Which are the online Top 5 Best Term Insurance Plans in India 2018? What is the claim settlement ratio of these best term insurance plans? Let us choose the best term insurance plans in India by comparison with charts.
We have around 24 Life Insurance Companies and as of now, all insurance companies offer online term insurance plans. Hence, it is hard to shortlist the BEST among them. This post will help you in shortlisting the Top 5 Best Term Insurance Plans in India 2018.
Term Insurance is the type of Life Insurance. If death occurs of the policyholder during the policy period, then his/her nominee will receive the Sum Assured selected. If policyholder survives till the end of the policy period, then he/she will not receive any maturity amount.
This is the reason, these policies cost you very less and cover a large amount of life risk. This is the PURE LIFE INSURANCE. Hence, anyone who has financial dependents must buy this product immediately.
However, nowadays there are so many variants in Term Life Insurance. For example, the return of premium, Term Life Insurance up to 100 years of age, a variety of riders and variety of claim payable option.
But instead of complicating your dependents, buy a simple plain term life insurance. Why you complicate your dependents when you are buying this is that this product’s benefit will come into picture when you are not here.
Nowadays all Life Insurance companies offer you online term insurance plans. The advantages of online term plans are as below.
# It is convenient to buy as with the click of a button you can buy it.
# As there will not be any middlemen involved, the price is cheap than offline term insurance plans.
# You fill the proposal form on your own. Hence, an error of margin is LESS.
# Undue influence by agents is not there.
# Along with the discount of DIRECT purchase, if you buy through online then now life insurance companies will give you 8% on your FIRST YEAR PREMIUM. This is to promote cashless online transactions.
Now let us shortlist the Top 5 Best Term Insurance Plans in India 2018. How I selected the Top 5 Best Term Insurance Plans in India 2018?
# How old are the companies
# Claim Settlement Ratio
# Premium Cost
# Plan Features.
Below is the chart which explains the age of all life insurance companies. I am comfortable with the company which is at least 10 years old.
You notice that among 24 Life Insurance Companies, only 17 companies completed 10 years or more. Therefore, my target is among these 17 companies only.
The reason behind this criteria is that Life Insurance is a long-term contract between you and insurance company. Hence, the older the company the more comfortable I feel.
I have already written a detailed post on this at “IRDA Claim Settlement Ratio 2016-17 | Best Life Insurance Company in 2018“.
However, for the better understanding purpose, I am putting the data again in this post.
You notice that among total 24 Life Insurance Companies, around 8 companies are in GREEN (Claim Settlement Ratio above 95%). Total 11 companies are in YELLOW (Claim Settlement ratio between 90% to 95%). Total 5 companies are in RED (Claim Settlement Ratio below 90%).
As usual, LIC tops the list. But don’t feel happy. Let us see the claim amount settled by individual companies to arrive at best companies.
As I said above, the claim settlement ratio will not give you the clear picture about which type of products the insurance companies settled. However, we can assume the types of products they settled by looking at the average claim settlement amount of Life Insurance Companies in 2016-17.
Here come the results !! LIC stands in lowest with red in colour along with Life Insurance Companies like Sahara, Reliance Life, Exide and Future Generali. What is it indicating?
It shows that, even though LIC settled the highest number of claims, the majority of such claims are less than Rs.2,00,000 Sum Assured. Hence, it is indicating indirectly that LIC’s claim settlement is mainly in the category of Endowment Plans but not Term Insurance.
Hence, the moral of the story is that DON”T RELY TOO MUCH ON CLAIM SETTLEMENT RATIO ALONE!!
Now I will consider these 5 Life Insurance Companies premium only to arrive at best. The Insurance Companies which I shortlisted are as below
Last year I recommended SBI Life’s Term Life Insurance. However, this time I excluded that by including Aegon Life.
Now I will consider an example of a person whose age is 30 years, Term of Plan as 30 years, Non-Smoker and healthy, Sum Assured Rs.1 Cr and yearly premium payment. I selected plain vanilla product without any riders or add-on features.
Now let us look at the plan features and decide which are the Top 5 Best Term Insurance Plans in India 2018.
Claim Settlement Ratio is raw data. This data will not give you enough picture of what type of products the insurance companies settled. Hence, relying too much on this single data and selecting a product is not a good idea.
Ideally one must have at least 15-20 times of your yearly income. This is the basic calculation.
Sharing data especially materialistic information must be accurate. If you are unable to understand anything, then immediately contact Life Insurer for the help. Understand the questions and fill only when you know what you are filling.
Never budge on the decision which is against your wish. If you are fully comfortable, then only go ahead and buy.
Ideally, it should be up to your retirement age. Because you retire when you are financially free. Hence, Life Insurance is not required during your retirement age.
There are few who are apprehensive of relying on a single insurer. Hence, they try to split among few. But in reality, there is no logic in splitting. What is the guarantee that the all insurer will accept or reject the claim?
Never combine Life Insurance with General Insurance requirement. You will get better-featured covers from general insurers regarding accidental and critical illness covers. Hence, simply avoid riders.
Nowadays there are so many online aggregators. You may not know that they act exactly like insurance agents. Hence, never rely on their claim. Do your own research. If you are satisfied, then only go ahead and buy. Refer my post about the same “Beware of Insurance Comparison portals in India“.
After the recent clarification about Sec.45 of Insurance Act, the customer became king. It states “No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy, i.e. from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later.”
Refer the complete post at “Term Insurance-Claim Settlement Ratio no more a big criteria“.
Buying Life Insurance of Rs.1 Cr or Rs.3 Cr is not a one-time affair. You must review your life insurance requirement at least once in the 5 years. If required, then you must increase the sum assured.
In case of term insurance, you have to be very cautious when it comes to premium payment. It is always better to opt for yearly premium payment and also if possible make it automated by the way of ECS. If policy lapses due to your negligence, then you have to undergo medical tests and all kinds of stuff once again. If there are any health issues, then the insurer may reject to renew the policy.
Recently one of my blog readers pointed that few Life Insurance companies insisting just Telemedical Examination by questioning about your health details in the phone (Refer-Can I buy Term Life Insurance with Telemedical Verification?).
It may be the easiest process for you and for life insurance companies. However, I feel suspicious of such kind of medical examination. Because in future insurance companies may find 100000 reasons to reject the claim on health ground.
Instead, I suggest you to go for medical examination. This will really clear the dust or doubt in your mind about future claim settlement.
Final Note:-The list of “Top 5 Best Term Insurance Plans in India 2018” is my personal choice and comfort with insurance companies and by verifying features. However, it does not mean that my selection will be the UNIVERSAL selection.
Hence, if you have a different opinion from my selection, then it does not mean you are buying a wrong product. My only concern here is not to shortlist “Top 5 Best Term Insurance Plans in India 2018”, but to give the gyaan which you must take into consideration before you shortlist your term life insurance.
EPF Scheme 2026 explained fully: EPF withdrawal, EPS pension, and EDLI insurance changes with examples,…
Chasing financial freedom? Do health, time, relationships and contentment matter just as much? Sadly, we…
Your "safe" SIPs, SGBs, PPF, or Index Funds are secretly sabotaging your wealth. Peltzman Effect…
Thinking your retirement plan is foolproof? Why LUCK - not asset or fund selection or…
Nifty 50 Index Funds Vs Active Large Cap Funds — Can we really compare them…
Should you pick Nifty 500 Multicap 50:25:25, Nifty 500, or Nifty LargeMidcap 250 Index Fund?…
View Comments
HDFC standard life wale Mera claim settled nahin kar rahe hain
Dear Deepak,
Knock IRDA.
Hi Basvaraj,
My insurance advisor says to invest in because it pays 10% interest: https://www.iciciprulife.com/money-back-endowment-plans/assured-savings-plan.html
Few years back, my parents purchased a similar plan, but it only pays 3.3% because it is pegged to 50% of G-sec. Do you think this is a similar scam? Or is it legit?
Dear Niranjan,
After your parent's experience, if you still believe your adviser, then only god can protect your money.
I have chosen ICICI Term plan, even before issuing the policy they are pushing other medical products. Now I have requested for the cancellation of my policy. Can I choose Max life or HDFC? Confused with my desicion please help
Dear Joe,
Both HDFC and Max are good. You can go ahead.
Sir a Query :
Lic tech term or Hdfc 3d protect
Lic : pros it’s Govt backed
: cons : it’s Govt and you know how govt offices work.
Hdfc : Pros : Private player so good services
: cons : Not Govt backed . Risk
So in your view what to do ??
Dear Rajit,
For me both are equally good and bad :)
Dear sir plz suggest Between hdfc click 2 protect and icici i smart term plan for 1 CR sum assured.Hdfc is covering upto 82 yrs nad icici upto 85 yrs. I prefer maximum term . Plz guide on the plan on the basis of services, financial strongness of company and customer relationship .i m very confused which plan i have to choose. Premium of icici is little higher than hdfc. Now i m 32 yrs opd. According to your post both plan are good still as per your knowledge and research help me to choose best one for me.
Dear Sashi,
Do you need life insurance up to the age of 80+?
Sir as i think if my death occurrs after 80 and if i have taken plan upto 70 to 75 age then only for 5 yrs my all premium will be waste of money. So benefit will be given to NOMINEE .so i thought i should go maximum term cover .plz guide
Dear Sashi,
Great idea :) But what will be the value of the sum assured you are opting today to when you turn 70 years of age?
Ok sir i m clear about your thought so plz suggest me which company i should select for plan icici or hdfc and upto which age i should take plan
Dear Sahi,
If the age up to which you cover matters, then go ahead with the one which offers you at maximum age.
Yes sir i want cover upto 80 + as i calculate my family will be depend on me upto 70 yrs on me
Dear Sashi,
So you will not retire up to your age of 70 years as they are depending on your income? If your family depends on 70 years of age, then why life insurance beyond 70 years of age?
Dear Sir ,
I have two question plz advise i want to purchase HDFC LIFE CLICK 2 PLAN FOR 1 CR THEY HAVE OPTION FOR PREMIUM PAYMENT IF I PAY SOME MORE PREMIUM TO NEXT 28 YRS (UPTO 60YRS OF MY AGE)THEN AFTER IT REMAINING 22 YRS(From age60 to Aage 82) OF MY COVER I WILL NOT HAVE TO PAY ANY PREMIUM AND MY COVER WILL WE CONTINUE. SO PLZ SUGGEST THIS OPTION OF PRIMIUM PMT IA GOOD FOR POLIC
Regular prem is - 16807 of i pay upto 82 yes
Limited premium is - 22925 if i pay upto 28 YRS
Plz suggest according to time value of money.
Dear Vaibhav,
Do you need the LIFE INSURANCE up to your 82 years of age? Also, what benefit they are giving you? Go for simple yearly premium payment.
Sir My age is 32 yrs and hdfc providing coverage upto next 50 yrs that is upto 82 yrs of my age. Benefit is if i pay premium upto 82 yrs of my age then i have to pay regularly Rs 16807 yearly
But if i pay upto 60 yrs of age then i have to pay Rs 20925 yearly and REMAINING 22 YRS upto 82 yrs of my age no premium i will have to pay. So PLZ suggest which option is suitable accordingly to time value of money
Dear Vaibhav,
Whether the premium for both the options are SAME? NO right? Then it is up to you which one to choose. But for me, I choose the regular yearly premium rather than limited premium payment. Again asking you, do you need Life Insurance up to the age of 82?
Yes sir i want to cover upto 82 yrs. Because i think after age of 60-70yrs chances of death is more. So i want to cover myself upto maximum age. Please suggest me am i right for this decision.
Next is i show you premium calculation
Regular prm- 16807*50=840305
20925*28=585900
So difference is840305-585900=254405 so i m saving this amount and after age 60 i will have not to pay any premium upto age 82 .
Please suggest
Dear Vaibhav,
When you retire from work, then no one will be financially dependent on you, then what is the use of Life Insurance? Also, the sum assured you have opted may be peanut when you reached 70 yrs or 80 yrs of age. Now regarding the so-called DISCOUNT, there is a concept called TIME VALUE OF MONEY. Hence, don't feel it as a BIG DISCOUNT for you.
Thanks sir for your speedy reply and guidance . Plz suggest HDFC LIFE is good for me or i should explore more companies like SBI, ICICI ,MAX LIFE etc in the point of view that there is no issue of claim arise in future.
Dear Vaibhav,
Go ahead with your choice and disclose all facts properly.
Sir at present i have term plan of lic of 50 lakh, but i have to switch to hdfc life so i should intimate lic to close the term plan or simply if i dont pay premium of lic automatically this plan will lapse. About closer of this plan should also mention in new policy or simply buy new policy.second i have also lic endowment plan this will also mention in new policy document. Please guide
Dear Vaibhav,
In case of term life insurance, you no need to inform to existing life insurer about the closure. Also, while buying the new life insurance, if you are sure that you are closing the existing life insurance, then you no need to mention it while proposing.
I have 1cr Term plan from Eidelweiss Tokio for last 3 yrs, at a premium of Rs 15340/- per year. Now I am 34 yrs old. Is it ok, if I shift to low premium Term plan like Aegon? And discontinue from Eidelweiss?
Please suggest.
Thanks. regards,
Somnath
Dear Somnath,
If the difference is huge, then you can shift and cancel the existing once you receive the new policy in your hand.
Dear Sir, Thanks for the useful post. I wants to know is their any rule from Irda that if someone pay 3 consistently premium to any company then company has no right to cancel his claim.
Dear Ashit,
I already mentioned about the same in above post (Sec.45).
Dear,
Could please explain about accident rider benift? Does all term insurance cover any kind of death I meab natural/accident if so why there is additional accidental rider benift?.
Dear Makesh,
In the case of normal Term Life Insurance, assume you opted for Rs.1 Cr Term Life Insurance and death happened due to normal or death, the nominee will receive Rs.1 Cr ONLY. However, along with this normal cover, you have opted for an accidental rider of Rs.50 lakh and if death happened due to accident, then nominee will receive Rs.1.5 Cr (Rs.1 Cr normal life coverage, and Rs.50 Lakh Accidental Death Coverage). Hope you got the clarity.
Thanks for the response. So you suggest rider benift is not required due it will increase premium right?
And can you suggest me the best term policy which has low premium for 1Cr with good company.
Dear Makesh,
I am not suggesting to include not because of premium will increase. But you can buy such riders separately which will be exhaustive in features than these rider benefits. Regarding suggestion on term policy, I have already mentioned my choices in above post.
sir, i compleated 50yrs, my annual income is around 7 lac .i have paying nearly 2lac for insure [different company most of them investment basis all purchased through agents .without any knowledge and by obligation.
now i want to buy pure term insurense which can protect my family .i am a healthy man how i buy really good policy? aditya birla,max ,or you suggest good policy for me.
Dear Hamsaraj,
Wait for my new post regarding the same.
sir,can i buy two term insurense from two different company?
Dear Hamsaraj,
Why not?
That's good news. I hope your fresh post soon. I want to buy a policy (age 42, income 6 lac) in this month. I will wait for your post to help me to take write decision. If possible send alert to my email ID.
Dear Paresh,
Thanks. You can subscribe to my posts (Widget is available at right-hand side of the post for a desktop view).