What's the best life insurance policy in India?
What's the best life insurance policy in India?
There is no one best life insurance policy that will cater to the needs of all individuals as the life insurance needs vary from individual to individual. To decide which term insurance plan to go for, consider the following factors:
1. Claim settlement ratio (CSR): CSR is the number of claims settled by a life insurance company for every 100 claims received by it in a year. As on March 2018, as per the IRDAI website, the latest data available on Claim Settlement Ratio for life insurance companies is for the year 2016–17. Following are top 8 companies with the highest claim settlement ratio.
Life Insurance Corporation (LIC) – 98.31
Max Life – 97.81
HDFC Life – 97.62
Aegon Religare – 97.11
ICICI Prudential – 96.68
Tata AIA – 96.01
Edelweiss Tokio – 93.29
Kotak Life – 91.24
While a good CSR is important, when it comes to buying a term insurance plan, the claim settlement ratio should not be the only criteria.
1. Claim settlement ratio (CSR): CSR is the number of claims settled by a life insurance company for every 100 claims received by it in a year. As on March 2018, as per the IRDAI website, the latest data available on Claim Settlement Ratio for life insurance companies is for the year 2016–17. Following are top 8 companies with the highest claim settlement ratio.
Life Insurance Corporation (LIC) – 98.31
Max Life – 97.81
HDFC Life – 97.62
Aegon Religare – 97.11
ICICI Prudential – 96.68
Tata AIA – 96.01
Edelweiss Tokio – 93.29
Kotak Life – 91.24
While a good CSR is important, when it comes to buying a term insurance plan, the claim settlement ratio should not be the only criteria.
Apart from the claim settlement ratio, you should consider the following points to arrive at a term insurance plan that suits your needs:
2. Premium: Compare the premiums of term insurance plans with similar features and evaluate which one offers you more value for money.
3. The maximum tenure of the plan: While most term plans will cover you for a maximum tenure of 35 to 40 years, there are some plans that will cover you for a higher tenure. TotalSecure+ from Edelweiss Tokio offers a maximum plan tenure of 62 years. This can cover you well beyond your retirement age of 60 years up to a maximum age of 80 years.
4. Claim payout options: Life insurance companies offer a choice of different various claim payout options for the customers’ convenience. Evaluate the various claim payout options offered under various term plans and choose the one that suits your requirement. For example, Max Life Online Term Plan Plus comes in the following 3 variants:
a) Basic Life Cover: Under this option, 100% of the sum assured is paid on death
b) Basic Life Cover + Level Monthly Income: Under this option, 100% of the sum assured is paid on death + 0.4% of the sum assured is paid per month, for 10 years
c) Basic life cover + increasing monthly income: 100% of the sum assured is paid on death + Increasing monthly income is paid for 10 years.
b) Basic Life Cover + Level Monthly Income: Under this option, 100% of the sum assured is paid on death + 0.4% of the sum assured is paid per month, for 10 years
c) Basic life cover + increasing monthly income: 100% of the sum assured is paid on death + Increasing monthly income is paid for 10 years.
5. Riders: Access your requirement and check if you need to purchase any riders with the term plan and check whether the term plan is offering those riders. For example, Edelweiss Tokio Life TotalSecure+ offers a choice of four optional riders, which include:
a) Accidental Death Benefit Rider
b) Accidental Total and Permanent Disability Rider
c) Waiver of Premium Rider
d) Hospital Cash Benefit Rider
b) Accidental Total and Permanent Disability Rider
c) Waiver of Premium Rider
d) Hospital Cash Benefit Rider
6. Option to increase life cover at important life stages: Evaluate if you would like to enhance your life cover at important life stages like marriage, childbirth etc. For example, ICICI Prudential iProtect Smart offers the flexibility to increase the insurance cover at important life stages, without any medical tests, as follows:
a) Marriage: The life insured can increase the death benefit by 50% of the original death benefit, subject to a maximum additional amount of Rs. 50 lakh
b) 1st childbirth / legal adoption: The life insured can increase the death benefit by 25% of the original death benefit, subject to a maximum additional amount of Rs. 25 lakh
c) 2nd childbirth / legal adoption: The life insured can increase the death benefit by 25% of the original death benefit, subject to a maximum additional amount of Rs. 25 lakh
a) Marriage: The life insured can increase the death benefit by 50% of the original death benefit, subject to a maximum additional amount of Rs. 50 lakh
b) 1st childbirth / legal adoption: The life insured can increase the death benefit by 25% of the original death benefit, subject to a maximum additional amount of Rs. 25 lakh
c) 2nd childbirth / legal adoption: The life insured can increase the death benefit by 25% of the original death benefit, subject to a maximum additional amount of Rs. 25 lakh
7. Variants of the plan: Term insurance plans of some companies are offered in various variants giving flexibility to the person to choose the variants that suit their requirement. For example, HDFC Life Click2Protect 3D Plus offers 9 variants to choose from. Some of these include:
a) Life: a Basic plan that pays a lump sum amount as the sum assured on death. All other variants cover this feature and some additional benefit.
b) 3D Life: Under this variant, future premiums are waived off on diagnosis of any of the specified 34 critical illnesses
c) Extra life: This variant pays additional sum assured, if death happens due to accident
d) Income: Pays additional level / increasing monthly income
e) Return of premium: If life assured survives the plan tenure, then the premiums are returned
The above are some of the variants of the plan.
a) Life: a Basic plan that pays a lump sum amount as the sum assured on death. All other variants cover this feature and some additional benefit.
b) 3D Life: Under this variant, future premiums are waived off on diagnosis of any of the specified 34 critical illnesses
c) Extra life: This variant pays additional sum assured, if death happens due to accident
d) Income: Pays additional level / increasing monthly income
e) Return of premium: If life assured survives the plan tenure, then the premiums are returned
The above are some of the variants of the plan.
On my blog, I have compared the claim settlement ratio of various insurance companies for the last 4 years. I have also compared the premiums and features of online term plans for 6 life insurance companies. You may check the details here:
Compare claim settlement ratio, premiums and features of 6 term insurance plans
Compare claim settlement ratio, premiums and features of 6 term insurance plans
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