What is a Term Insurance Plan?
As compared to traditional insurance plans, Term insurance plan is a basic insurance plan wherein you pay a much lower premium to get a high sum assured. The other main difference is the death benefit which is provided only in case of death of the policy holder. It means that in case the policyholder survives the entire term of policy, nothing will be paid to the nominee hence there is no return on maturity of the term plan. A person of 35 years of age can buy a cover of Rs. 1 crore at around Rs.10,000/- per annum only.
Here is the table showing the best online term insurance plans in India (as on Oct-2015)
| Company | Scheme Name | Policy Term (Years) Min Max | Min Age at Entry | Covers upto (Max Age) | Sum Assured (in Rs.) Min Max | Premium (in Rs.) | Claim Setting % (2014-2015) |
| ICICI Prudential | iProtect | 10 30 | 20 | 75 | 3 Lakh NA | 12,247 | 94.1 |
| HDFC Life | Click 2 Protect | 10 30 | 18 | 65 | 10 Lakh 10Crore | 11,910 | 94.0 |
| LIC | e-Term Plan | 10 35 | 18 | 75 | 50 Lakh NA | 16,405 | 98.1 |
| Max Life | Max Life Online Term Plan | 10 35 | 18 | 70 | 25Lakh100Crore | 8,314 | 93.9 |
| Kotak Life | Preferred e-term | 10 40 | 18 | 75 | 25 NA | 8,287 | 90.7 |
| SBI Life | eShield | 10 30 | 18 | 70 | 20 NA | 13,135 | 91.1 |
| Bajaj Allianz | iSecure | 10 30 | 18 | 70 | 20 NA | 13,438 | 91.3 |
| Aegon Religare | iTerm Plan | 5 40 | 18 | 75 | 10 NA | 8,202 | 81.0 |
Why is it available so cheap?
Because there are no agents involved; it is similar to your online shopping wherein no shopkeeper/distributor is involved . All the amount which company have to pay towards commission/other payouts and even the other administrative costs are much lower. The same amount is passed back to the end user. The other statistically proved reason is the longevity of those buying online as the population is mostly between in between 30s and 40s and also more alert and conscious about their security & well being.
Advantages:
Term plan has many advantages than your traditional policies as follows:
Lowest Premium (50-60% cheaper than offline)- Highest Coverage
- Faster process & Issuance
- Less paperwork involved
- Utmost Transparency
- Flexible in selecting a required plan
- No medical checkup for certain age groups or up to Rs. 50 lakhs sum assured
Disadvantages:
Though there are lot of advantages as seen above for the policy buyer but ultimately it’s your nominee who is going to apply for the claim if arises. You have to make sure that the technology/lodging claim online and other filing process should not become a bottleneck for them because nominee in most cases would be either wife or parents. They should not be made run from pillar to post to get their due claim. This happens mainly because there is no agent or mediator who can help in all the paperwork (online) to get it done especially in times when they are under emotional trauma due to the death of their loved one. Even local office of insurance companies won’t be able to help because it is online and could be done online only.
Conclusion:
Online term insurance plans are the best if you can educate your dependents for the procedures and formalities involved in the claim and also keep them updated about your policy contract and jurisdiction. Enjoy your cup of coffee without comparing its cost to the term plan and don’t fall prey to marketing gimmicks, be smart and buy smart.