Which are the online Top 5 Best Term Insurance Plans in India 2019? 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 2019.
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 201. How I selected the Top 5 Best Term Insurance Plans in India 2019?
# 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, 22 companies completed 10 years or more. Therefore, my target is among these 22 companies only.
I have already written a detailed post on this at “IRDA Claim Settlement Ratio 2017-18| Best Life Insurance Company in 2019“.
However, for the better understanding purpose, I am putting the data again in this post.
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.
You notice that among 24 Life Insurance Companies, I marked 11 companies in green due to their claim settlement ratio of more than 95%.
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 2017-18.
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
Even you can consider the companies like Bharti Axa or Tata AIA Life. However, I have to choose only five among 24 Life Insurance Companies. Hence, I have selected these 5 as per my choice and comofrt with the companies.
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.
One thing I noticed is that LIC REDUCED it’s premium when we compare to last year. Last year it was Rs.16,060. However, this year it is Rs.15,850.
Now let us look at the plan features and decide which are the Top 5 Best Term Insurance Plans in India 2019.
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 2019” 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 2019”, but to give the gyaan which you must take into consideration before you shortlist your term life insurance.
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View Comments
Hi Sir,
I currently have a term insurance plan without accidental death benefit. I guess the insured sum is also low compared to my present income. Is it a good idea to discontinue same and avail a fresh one with accidental death benefit rider?
Dear Raj,
Buy a new one from the same insurance company and buy accidental insurance separately from non-life insurance companies.
if the term insurance company had done the medical and issued the policy. can they reject the claim due to any medical conditions??
Dear Singh,
Yes, they can. Medical test done doesn't mean they must accept.
Dear Sir,
I am 36yrs old and a diabetic patient. I am planning for a term insurance in Max life.
I believe, they will conduct the medical test and based on this they will accept or reject the application. If in case they accepted with higher premium. Can you please go ahead with this or is there any risk that I need to consider before proceeding.
Regards
Manoj
Dear Manoj,
If they accepted it with higher premium and knowing your health status, then what is wrong here?
Sir, i m 44 yrs old married and have 2 school going kids. I m in a pvt sector having annual net salary Rs.12Lac. I do not have any term plan.
Kindly advice for how much should I insure and the duration. should i opt for yearly or one time premium. Can I choose one among the top 5 listed.
Regards
Thiruvengadam
Dear Thiruvengadam,
The ideal insurance coverage should be at least 20 times of your yearly income. Opt for yearly premium payment.
Most of the insurance companies conduct only questionnaire based medical examination but not conduct direct in person medical examination. During online form filling they ask some questions about our medicals conditions.
1. How can I insist them to conduct direct medical examination instead of the questionnaire?
2. If I disclose any disease for which I had taken treatment in the past (3 years back), but it is completely cured now, will they deny the claim if the death is caused by the same disease?
(here disease means any curable respiratory disease, such as TB, Pneumonia.......)
Dear Rajan,
I am Anurag from Bangalore. Kindly advice on the matter.
I have already invested in INVESCO INDIA CONTRA FUND - GROWTH . The history shows that the fund is steady for a long time now. I want to continue for a long time in SIP route.
Is it ok to continue?
Dear Anurag,
What prompted you to invest in this fund? It is hard to say BLINDLY.
Dear Rajan,
You can't insist them as it is their wish to do so. Denying or accepting depends on the underwriter's decision. Hard to predict.
So still, there is a change to deny the claim if we disclose our existing diseases, Then why should we disclose all the diseases?
Dear Rajan,
If you not disclose then it is a BIG opportunity for them to deny :)
Should I Buy Aegon Term Plan with 36 Critical Illness Cover or It is Better to Buy It from General/Health Insurance?
Sir, You have Commented not to Buy CI with Life Insurance. You Told, "You will get better-featured covers from general insurers regarding accidental and critical illness covers."
Suggest me 36 CI Covered is Good or I have to Opt it From General Insurance ....
Dear Dharmilkumar,
Better not to go for riders. Regarding which one to choose, refer my earlier post for the same.
Sir, Saperate CI Policy From Heath Insurance Compancy will give me Claim when I'll Hospitalize. And It'll give me Only Hospital Expenditure.
But In Life Ins. Critical illness Rider, If I Took Cover of 20,00,000, Then Compancy will give me Claim when Critical Illness is Detected. And They'll provide Full Claim of 20 LACS Instead of Only Hospital Expenditure...
Is it Good Na.... or Any Hidden Prospect is Present That I don't Know....
PLZ Suggest...
Dear Dharmilkumar,
Please read the features properly with respect to standalone critial illness covers.
dear sir can we ask insurance company to send the copy of medical test done by them to me before accepting their proposal?
bharti axa has low premium but can the bad condition of Airtel in telecom can affect this company or this is totally separate entity ?
please give your view about bajaj allianz.
Dear Man,
You can't ask before the issue of the policy. Both are different entities.
These companies just shows 1crore cover to lure the customer. I have tried max and ageon for term insurance. Ageon reduced the cover from 1crore to 30lakhs on basis of my salary(which i have told then in starting of process) even while their no problem in medical test. (
Max rejected the cover after all process saying they did not cover the my address pin code ( while their representative visited my home to verify address).
Mr. Basu what should i had done in those conditions.
Dear Man,
It is completely depending on their decision. Yes, sum assurance should also match your income. Otherwise a person earning monthly Rs.50,000 may ask for Rs.5 crore, whereas his human value may not be that much. Regarding Max, I am not sure what prompted them to reject the claim.
That what I am saying if they cannot give a person salary of 500000 a one crore cover why the hell they doing all process at first place . On their portal they ask income at first place. Totally non sense process by them.
Max knowing pincode at first place cancel the proposal on basis of pincode not covered . Can we take those firms to consumer courts for wasting the time .
Dear Man,
It is their calculator providing options. Default option does not mean default option for YOU.
I am term insurance process in TATA AIA.Is TATA AIA IS trust worthy to continue with insurance policy.shall I shift to other term insurance company.
Dear Pabitra,
If you are comfortable with product feature and premium, then go ahead.
Hi Basavraj sir,
first of all thanks such a wonderful & informative posts.
I'm 29 yrs old, planning to get LIC's Newly launched Tech Term plan (854).
My query is , 1) Does IRDA has stipulated any guildelines on medical tests to be conducted by Insurer's while issuing Term Plan ? or it is left to the discretion of Insurer's ?
2) Do they share Medical reports if a person comes out fit through medical tests ?
3) It is advisable to retain a copy of medical reports from Insurer's ? (For our information pupose only )
Dear Rahul,
1) It is left with IRDA.
2) YES, they will without whether you asked for it or not.
3) Usually, they send it with policy bond.