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  • Term Insurance

    What is Term Insurance?

    Term insurance can be defined as a type of insurance that is availed for a certain period of time or a fixed term (number of years). The basic differentiating feature of term insurance is that unlike other types of life insurance policies, a term insurance policy is less expensive since it does not have any cash value. The policy comes useful only if the policyholder dies within the timeframe during which the term insurance policy is in force.

    Term insurance policies are offered by almost all major insurance providers and these come for various terms like 10 years, 20 years, 30 years etc. The most significant point about term insurance policies is that most of these policies have a built-in feature to get converted to permanent life insurance policies irrespective of the state of health of the term insurance policyholder.

    Best Online Term Plans in India

    Online term insurance plans are offered by insurance companies for the convenience of their customers. Some of the significant advantages of buying term insurance online are:

    • When you buy term insurance through an online portal, you may benefit from lower policy cost when compared to buying it the conventional way. From the insurer’s perspective, for online sales the involvement of life insurance agents and field officers are limited, making it a more economical way of selling insurance. Hence, the insurance company passes on this benefit to the customer.
    • The entire process of online application happens in a hassle-free manner.
    • The customer is not influenced by an insurance advisor or agent while purchasing the plan.
    • The customer is serviced in the same manner, irrespective of the way in which he/she buys the plan, i.e., online or offline.
    • Although the premiums for these plans are low, you need not be apprehensive about buying these policies. Online plans have low premiums due to two main reasons:

      i) There is no intermediary in the deal.

      ii) The online buyer is considered to be a low-risk customer for the insurance company. He/she would be educated, earning well, and is likely to have health insurance. In the event of an emergency, he/she would be in a position to reach a hospital on time and get access to quality medical facilities. These factors contribute towards the low risk and reduction in premium.

    Some important points to keep in mind while buying online term insurance are as follows:

    • Premium may vary in the future - The online price quote you receive is provided on the basis of an assumption that you carry normal risk in terms of health, occupation, and your family’s medical history. After you submit all relevant documentation, the insurer may request you to undergo medical tests to arrive at the actual policy cost. In case the medical reports indicate that you are exposed to certain risks, the premium for your insurance may rise.
    • Do not let the policy move into lapsed status - The act of buying an online insurance plan is certainly a smart move. However, you should not let the policy lapse by missing premium payments. Since there would be no insurance agent reminding you of the premium payment due date, it is easy to miss renewing the insurance. It is advisable to send an ECS mandate to your bank so that the premium amount is automatically deducted on the due date. Setting up an alert on your mobile phone or computer is also a great way to remind yourself of the payment date.
    • Do not hide relevant facts while applying - If you are a smoker or use tobacco in any other form, your insurance premium will be 25%-30% higher than that of an individual who does not use tobacco. However, you should never hide this information in your application for insurance. At the time of a claim, if the insurer finds that the customer had concealed information, the claim will be rejected. The insurer may also cancel the policy, as applicable.

    Your insurance policy is the backbone of your family’s financial security. So, you should not get into a situation where the insurer annuls the plan.

    Term Plans Entry Age (Min / Max) Maturity Age Policy Term Premium Payment Option Minimum Sum Assured Payout Type Claim settlement ratio (FY 15- 16) as per IRDA
    LIC's e-Term 18 / 60 Years 75 10-35years Annual Rs. 25,00,000 for Aggregate category  Rs. 50,00,000 for Non-smoker category LumpSum Only 98.33%
    Max Life Online Term Plan 18 / 60 Years 70 10 - 35 years Annual Rs 25,00,000 Lumpsum & INcome Options 96.95%
    BSLI Protect@Ease 18 / 55 Years 80 5-30 years Monthly (ECS), Annual & Single Rs. 50,00,000 LumpSum Only 88.45%
    Tata AIA iRaksha Supreme 18 / 70 Years 80 10-40 years Annual, Semi-Annual, Single Rs 50,00,000 LumpSum Only 96.8%0
    ICICI prudential - iProtect Smart Plan 18 / 65 Years 75 5-40 years Monthly, Halfyearly, Annual & Single Subject to minimum premium paid Lumpsum & Income Options 96.20%
    PNB Metlife - Mera Term Plan 18 / 65 Years 75 10-40 years Monthly & Annual Rs. 10,00,000 Lumpsum & Income Options 85.36%
    Bajaj Allianz iSecure 18 / 60 Years 70 10 | 15 | 20 | 25 | 30 years Monthly, Quarterly, Semi-Annual, Annual Rs.250,000 for general category Rs.20,00,000 for the categories split by Preferred Non-Smoker1 , Non-Smoker1 & Smoker LumpSum Only 91.30%
    Kotak Preferred e Term Plan 18 / 65 Years 75 10-40years Monthly, Yearly, Single Rs 25,00,000 LumpSum Only 89.09%
    HDFC Life Click 2 Protect Plus 18 / 65 Years 75 10 – 40 years Monthly, Quarterly, Semi-Annual, Annual Rs 25,00,000 Lumpsum & Income Options 95.02%
    AEGON Life iTerm Plan 18 / 65 Years 75 5 - 40 years; or upto 75years Annual Rs10,00,000 LumpSum Only 95.31%
    Canara HSBC Life - eSmart Term Plan 18 / 70 Years 75 10 | 15 | 20 | 25 | 30 | 35 | 40 years Annual Rs. 25,00,000 LumpSum Only 92.99%
    SBI Life - eShield  18 / Max:  1.For Level Cover & Level Cover with Accidental Death Benefit: 65 years  3.For Increasing Cover & Increasing Cover with Accidental Death Benefit: 60 years 70 Min:  For Level Cover & Level Cover with Accidental Death Benefit: 5 years  For Increasing Cover & Increasing Cover with Accidental Death Benefit: 10 years MAX- 30 years Annual Rs. 20,00,000/ LumpSum Only 93.39%
    Reliance Online Term 18 / 55 Years 75 10 | 15 | 20 | 25 | 30 | 35 years Annual Rs 25,00,000 LumpSum Only 93.82%
    Future Generali - Flexi Term Plan 18 / 55 Years   Min: 10 years , Max: Smoker: 65 years minus Entry Age, Non-smoker: 75 years minus Entry Age Annual Rs. 50,00,000 Lumpsum & Income Options 90.26%
    Aviva I Life 18 / 55 Years 70 10 - 35 years Half-Yearly, Yearly Rs 25,00,000 LumpSum Only 81.97%
    Bharti Axa Life – eProtect 18 / 65 Years 75 Fixed Policy Term - Minimum - 10 years, Maximum - 30 years Customised Policy Term - Up to 60 years, Up to 65 years, Up to 70 years, Up to 75 years Annual Rs. 25,00,000 LumpSum Only 80.02%
    IDBI Federal - iSurance 18 / 50 Years 75 10-25 years Annual Rs 50,00,000 LumpSum Only 84.79%
    IndiaFirst Life - Anytime Plan 18 / 60 Years 70 5-40 years Monthly (ECS), Half-Yearly, Annual, Single Rs. 10,00,000 LumpSum Only 71.87%
    Edelweiss Tokio - MyLife+ 18 / 60 Years 80 10 | 15 | 20 | 25 | 30 | 35 | 40 years; & 80years minus Age at Entry Annual Rs. 25,00,000 Lumpsum & Income Options 85.11%

    Best Offline Term Plans in India

    Offline term insurance plans are more expensive than online plans. Irrespective of that, they provide a good amount of life insurance coverage for relatively low premiums. Offline term insurance policies are far more cost-effective than endowment or money-back insurance policies. Some of the advantages of taking an offline plan include:

    • Policyholders get the assistance of insurance agents while applying for the plan.
    • Customers can get reminders from insurance agents on premium payment due dates, leading to timely payments.
    Term Plans Minimum Entry Age Maximum Entry Age Policy Term Sum Assured Payout Type Riders Available
    Bajaj Allianz iSecure More 18 60 10, 15, 20 & 25 years Rs. 2,50,000 Income Yes
    HDFC Life CSC Suraksha Plan 18 55 5 years to 15 years Min-Rs. 30,000
    Max- Rs. 2,00,000
    Lumpsum No
    SBI Life - Smart Shield 18 60 Min: 5 years Min: Rs 25,00,000 (in multiples of Rs.1,00,000) Income Yes
    SBI Life - Grameen Bima 18 50 5 years Min: Rs. 10,000
    Max: Rs. 50,000*(*Aggregate Sum Assured under this plan will be capped at Rs. 50,000 for each life. )
    NA NA
    What is Term Insurance?

    Why Do You Need to Buy Term Insurance?

    Term insurance is generally overlooked in comparison to other insurance products. The main reason for this is the belief that term insurance plans do not offer significant returns or any additional benefits besides the Sum Assured on the policyholder’s demise.

    However, there are several advantages of buying a term insurance policy. These include:

    • Financial security - Term insurance plans are an excellent way to build a financial safety net. This is especially true in today’s world, as such a plan makes provision for the financial security of the policyholder’s dependents in the event of his/her demise.
    • Basic insurance product - Instead of opting for a plan with a host of other add-ons and ending up paying a high premium, opt for a term insurance plan with a fixed, affordable premium for almost the same features.
    • Greater returns - Term plans also fit everyone’s needs. A term insurance plan is one where the benefit received is much more than the sum invested, resulting in higher returns without the hassle of having to manage investment funds. Regular plans as well as TROP plans offer as much as 105% return on premiums paid as a benefit upon maturity.
    • Sufficient coverage - You can choose the sum assured under term insurance policies so that it offers you sufficient coverage. Financial advisors are of the opinion that sufficient cover is equal to 10 times your annual income. It should be noted that inadequate coverage defeats the purpose of being insured. Along the same lines, it is important that you review your insurance cover and identify areas where you can cut down, so that you are not over-insured.
    • Survival benefits - While a regular term insurance plan does not have any survival benefits, a number of insurers have designed plans, i.e., Term Return of Premium Plans (TROPs), that offer survival benefits in the form of premium refunds at maturity.
    • Policy term - Term insurance plans offer you coverage for a fixed term. This indicates that you can take term insurance for a fixed duration wherein your family is financially protected. Following this, you can retire comfortably.
    • Low claim rejection - Claim rejections are observed to be lower if a life insurance policy has been active for more than 10 years. Hence, it is ideal to buy term insurance to ensure that your claims are honoured.
    • Flexibility - Most term plans offer you the flexibility of buying the policy online or offline. In addition to this, many insurers do not insist on health check-ups if the sum assured under the plan is Rs.50 lakh or less.
    • Riders - Term plans can be enhanced through the use of riders that offer extra protection. These riders can be bought from the insurance company at nominal costs. Some of the riders available under term plans are accidental death benefit, critical illness, partial or permanent disability, waiver of premium, etc.
    • Low brokerage - In case you opt for an offline term insurance policy, you will be paying the lowest amount as broker commission. Brokerage is usually calculated as a percentage of the premium paid. Since the premium for term insurance policies are usually low, the overhead of broker charges is also reduced. If you choose an online plan, there will be no broker fees as well.
    • Flexible payment options - Term insurance policies offer flexible premium payment options, allowing policyholders to choose a payment plan based on their convenience. Premiums can be either limited pay, single pay or regular pay. Policyholders who choose limited or regular pay plans can pay their premiums either monthly, quarterly, half-yearly, or annually.
    • Choice of plan - A number of insurers offer policyholders a choice when it comes to the type of plan they wish to opt for. Policyholders can choose between single or joint life plans, depending on their need. They can thus choose to extend coverage for dependent spouses or choose a plan exclusively for the breadwinner of the family.
    • Tax benefits - Last, but not the least, premiums paid towards a term plan is eligible for tax benefits under Section 80C of the Income Tax Act. The death benefit received by the nominee under the plan is eligible for tax deductions under Section 10(10D) as well.

    How does Term Insurance Works?

    A term insurance policy can be considered one of the most traditional forms of insurance. Most of the term insurance plans have a premium that increases in small amounts over a period of time. This is to account for reduction in the value of money as years pass by. It also covers the increase in mortality risk and the extra levies imposed for a longer coverage term.

    To understand how it works, you can look at it in these three situations:

    • Buying the policy: To be able to buy a term insurance policy you don’t need to put aside tens of thousands of rupees every year. Many of the insurance policies can offer you a sum assured of up to Rs. 1 crore for a premium that could be as little as about Rs. 10,000 per annum (These are indicative figures. The actual premiums may differ depending on the sum assured and the insurance providers).
    • Keeping the policy: Just like any other insurance policy, you pay the premium towards these policies at a frequency chosen by you. These premiums can be paid every month, every quarter, every 6 months or once a year. They can also be paid as a lump sum instead of being paid at regular intervals.
    • Redeeming the benefits: Term insurance plans don’t usually come with any maturity benefits.Term insurance plans don’t typically come with any maturity benefits, except for term insurance with. Their main objective is to provide life insurance cover and that is exactly what they do. In case the policy holder passes away, the person who is named as the beneficiary of the policy will receive the sum assured.

    The way it works is also one reason why you will notice that a lot of the time insurers refer to these plans as pure protection plans. There are no frills attached to the plan. You pay the premium and you get a fixed sum if case something happens to you.

    Types of Term Insurance Plans:

    Insurance companies offer a wide range of term insurance plans with exciting features and benefits to stand out amongst competitors in the insurance space. A term insurance plan offers financial coverage to the insured for a specific period of time, and in case of his/her demise the beneficiaries are paid the assured benefits.

    Regular Term Insurance plans:

    A regular term insurance plan is a no-frills insurance plan that provides coverage against a specific set of risks on payment of a pre-decided premium amount. These plans offer no benefits upon maturity. Premium payments can be made periodically or they can be paid at once (single pay). The options for insurance cover can go as high as the insurer is willing to underwrite and the policy tenures can be as high as 20 years. When the policy matures, the insurance cover ceases, as does the need to pay premiums for such a cover.

    Standard Term Life Insurance Plan:

    In a standard term life insurance plan, the policyholder chooses a plan which offers a certain risk coverage for a period specified under its scope. These are typically low premium plans that come with a multitude of features to suit the insurance needs of customers. Standard plans are the commonly chosen ones by policy buyers among all other term life plans available in the market.

    Group Term Insurance Plans:

    These are policies offered to a group of individuals by an employing organization, association, or trusts and societies. It provides coverage to each and every member insured under the plan is less expensive compared to an individual term insurance plan. Group term plans offer more or less the same benefits as in individual plans, however, the only disadvantage is that the coverage expires once the employment or membership ends.

    As is made obvious by the name, a group term insurance plan is meant to be an insurance instrument that can be used by a group to secure its members against untoward occurrences. These plans can be taken by any group of people or companies for their employees but can come with one essential clause, which is that there may be a mandate set by the insurer where the policy will require a minimum number of people participating in it. For example, if a policy says that it will cover groups of at least 20 people then a small company that has less than 20 employees won’t be able to purchase the policy.

    The benefits of such a plan are similar to individual policies but the list of illnesses and other factors are generally more exhaustive as compared to an individual policy.

    Convertible term insurance plans:

    A convertible term plan allows the policyholder to convert his/her policy into a permanent one during the policy tenure. Some insurers provide this as an additional benefit rider while others offer the same as a standalone plan. As far as the terms and conditions have been met, converting a term life policy into a permanent policy should not be a difficult process.

    Term Return of Premium Plans (TROP):

    TROP plans are standard term life insurance plans with a slight variation in the method of providing survival benefits. On survival, policyholders are returned the total amount of premiums paid by them during the policy tenure, excluding tax. Such a method ensures that the money spent on the policy is returned to you after a specific interval. In other terms, it can be called as a zero-sum game.

    Similar to a regular insurance plan, a TROP offers a refund of the premium upon the policy’s maturity if the policyholder survives till the policy matures. A TROP plan generally allows policyholders to add riders or benefits to their existing plans to increase their coverage. TROP plans have a slightly higher premium amount compared to regular term insurance due to the premium repayment facility.

    Decreasing and increasing term plans:

    The insurance market is flooded with various types of policies that it often becomes difficult for the buyer to choose the best suited plan. Decreasing and increasing insurance policies are two of the commonly used terms in the insurance realm. Let’s take a look at the features and benefits of the aforementioned policies:

    Decreasing term insurance: In this type of policy the sum assured on death as well as the premium decreases at a certain rate throughout the policy term. Such plans are generally offered by financial institutions to insure the property held as collateral against the loan offered. It is an additional safety component which ensures that the bank will get back the amount released as loan, in case of the worst scenario.

    Increasing term insurance: Under increasing term insurance plans, the insurance coverage increases at specified durations when the policy is in full force. It evaluates risks on par with the rising costs at any given time in future and compensates accordingly, in case of emergencies. Ideally, the cover keeps increasing till the time it attains a value which is 1.5 times higher than the original cover.

    Joint term insurance plans:

    As the name suggests, joint term insurance plans are those plans which allow the person insured to cover his/her spouse in the same policy. It’s a comprehensive financial protection solution with multiple benefits for couples. It basically ensures that the family equilibrium remains intact during hardships, or in the worst case, during the absence of one of the two or both. These policies are well suited for married couples with dependent children.

    Term insurances for specific durations:

    Most of the insurers provide term insurance plan for a specified number of years such as 5, 10, and 15 years. Such plans are commonly known as level term insurance plans, as they can be matched against the income replacement needs of individuals. These plans can range from 5 years to 30 years. But once the term period is expired, the same coverage at the previous rates of premiums may not be guaranteed by the insurance companies. The difference between level term plans and permanent life insurance plans is that the latter provides a lifetime coverage at fixed rates of premiums. The level term plans are suitable for people falling in the below categories:

    • Those with short term financial needs
    • Individuals seeking additional insurance cover
    • Prospective buyers who can afford only low premiums
    • People planning their retirement

    Online term insurance plans:

    The digital advancements of the recent past has created significant changes in every sphere of activity, especially in the way business transactions take place these days. Most of the insurance companies have started offering term life insurances online, without involving mediators. All the information related to the policy will be hosted on the insurance company’s website which makes it easy for the buyers to compare and choose the best suited plan.

    Endowment Plans:

    Endowment plans are non-linked insurance plans that offer both savings as well as protection. Endowment plans can extend up to 35 years, with the maturity at 75 years. Endowment plans come with a maturity benefit as well as a death benefit. Under the maturity benefit, if the policyholder survives till the policy matures and has paid all premiums, he will receive the premium as well as a bonus amount on maturity.

    Some insurers provide add-ons such as accidental death benefit which can be availed along with an Endowment plan.

    Money Back Plan:

    A money back plan is similar to an endowment plan. As the name suggests, a money back plan pays out a specific sum during the policy term. The Sum Assured amount is paid out over the policy term at regular intervals. If the policyholder survives after the plan matures, the balance of the Sum Assured is paid in a lump sum.

    Features and Benefits of Term Insurance:

    • Flexible Payment Options:

      Term insurance policies offer flexible premium payment options, allowing policyholders to choose a payment plan based on their convenience. Premiums can be either limited pay, single pay or regular pay plans. Policyholders who choose limited or regular pay plans can pay their premiums either monthly, quarterly, half-yearly or annually.

    • High Sum Assured for Low Premiums:

      Term insurance premiums are some of the lowest in the insurance sector, allowing for a prudent and relatively inexpensive way to safeguard the policyholder’s dependents in case of untimely demise. The Sum Assured associated with term insurance plans are also relatively high when compared to the premium amounts. Regular plans as well as TROP plans offer as much as 105% return on premiums paid as a benefit upon maturity.

    • Choice of Plan:

      A number of insurers offer policyholders a choice when it comes to the type of plan they wish to opt for. Policyholders can choose between single or joint life plans, depending on their need. They can thus choose to extend coverage for dependent spouses or choose a plan exclusively for the breadwinner of the family.

    • Death Benefit:

      On the death of the policyholder during the policy term, his/her dependents stand to receive the amount chosen at the time of choosing the policy. The amount would depend on the term plan, with the amount increasing, decreasing or remaining the same irrespective of at what juncture of the policy tenure the policyholder’s death occurs.

    • Tax Benefits:

      Policyholders can claim tax exemptions under various sections by virtue of opting for a term insurance policy. Tax exemptions can be got under section 80C of the Income Tax Act on premium amounts.

      Policyholders can also claim exemptions under Section 10 (10D) of the Income Tax Act for benefits received through insurance policies.

    • Survival Benefits:

      While a regular term insurance plan does not have any survival benefits, a number of insurers have designed plans that also offer survival benefits in the form of premium refunds on maturity.

      On maturity of the policy, surviving policyholders stand to receive benefits under a TROP policy only. In the case of a TROP policy, the policyholder will receive the premium amount paid over the policy tenure as one lump sum.

    • Add-on Benefits:

      A number of individuals have begun to opt for add-on features to their regular term insurance policies. These add-on plans will push up the price of the premium being paid but provide additional benefits in case of accidental death, critical illness, total and permanent disability benefit etc.

    How to Choose a Term Insurance Plan:

    The market is flooded with term insurance policy options, with varying policy terms, benefits and Sum Assured amounts. Navigating this maze of policies and making sure you choose the one that fits best and meets your requirements is a difficult task. The following points can be kept in mind when looking for a term insurance plan:

    • Reliability:

      When picking an insurance policy, it is always advisable to look at the insurance company’s reputation. This is important as a term insurance policy is a long term investment and as a policyholder, you should not be left in the lurch in the event the company shuts down or meets with any difficulties. Checking the company’s FICO score would be a good way to gauge its stability and reliability.

    • Claim Settlement Ratio:

      The insurance company’s claim settlement ratio is an indicator of the number of claims settled out of every 100 claims received by the company. Insurance companies with a healthy claim settlement ratio are seen as more reliable and a better choice, as a higher settlement ratio is considered favourable. The IRDA publishes the claims settlement ratio for all insurance companies for a particular year.

    • Riders / Add-on covers:

      The riders provided by the insurance company in addition to the regular policies are also to be considered. A policy that provides the basic coverage and also offers additional benefits and riders is seen as a secure one, and insurers who provide a wide range of riders are considered a good option.

    • Cost:

      The amount you would be paying in terms of premium for the protection offered is a key factor in selecting a term insurance policy. Given that these policies can have a tenure up to 20 years, the amount being paid annually as premium is a significant amount. Thus companies that offer reasonable protection for low premiums are preferred by policyholders.

    • Inflation:

      When selecting a term insurance policy, take into account factors like inflation. Term insurance policies are usually taken out for 10-20 years, during which time inflation will erode the value of the rupee, resulting in lower returns at the time of maturity.

      To offset this, consider companies that offer plans where the cover increases by 5% - 10% annually to keep in line with inflation.

    Documents Required for Term Insurance:

    The following documents are to be submitted while applying for a term insurance policy:

    • PAN card.
    • Proof of age (passport/birth certificate/driving licence/PAN card etc.)
    • Proof of address (utility bills/ration card/bank account statement/voter’s ID card/passport).
    • Proof of identity (passport/voter’s ID card/Aadhaar card/driving licence/letter from a public servant or authority verifying identity).
    • Proof of income (Income tax return/employer’s certificate/Income Tax assessment order).
    • Recent passport sized photographs.

    Exclusions for Term Insurance Plans:

    Term insurance plans cover a list of specific events and circumstances. Depending on the type of plan selected, this could be an exhaustive list. However, there are some exclusions that term insurance policies do not provide coverage for. Given below is a list of exclusions:

    • Suicide: Suicide is an exclusion in all term insurance policies. Insurers will not pay dependents in the event of the policyholder committing suicide within a year of purchasing the policy. In the case of group insurance, suicide will not be liable for compensation as well.
    • Death due to war, terrorism drought: Death due to natural calamities and acts of war are not covered under a term insurance plan.
    • Death due to actions by the insured: Accidental death brought on by the actions of the policyholder (such as extreme sports etc.) are not covered as these are viewed as self-imposed risks by the policyholder.
    • Death due to intoxication or narcotics: If the policyholder’s death was brought about by or as a result of consumption of alcohol or narcotic substances, the insurance company is not liable to compensate dependents.

    Claim Process:

    In the event of the demise of the policyholder, the dependents are required to file a claim to recover the amount as decided at the time of purchasing the policy. This process is known as a claim process. The claim process for term insurance is a relatively simple one.

    The claim settlement process is provided in brief below:

    • Intimate the insurer regarding the claim: The first step of the process consists of notifying the insurance company of the claim. This can be done by contacting the insurance company or visiting a branch with the documents as mentioned in the insurance document.
    • Document submission: On intimating the insurer about the claim, the claimant will have to submit the necessary documentation, such as the original insurance document, proof of the claim, death certificate, medical records etc. as required. In some cases, the insurer could ask for additional documents in order to check the veracity of the claim.
    • Decision on the claim: Once the documentation has been submitted and verified, the insurer will take a decision on whether the claim will be honoured based on the documentation provided.

    Term Insurance Premium Calculator:

    Insurance companies providing term insurance are often fielded with questions regarding the premium to be paid for a particular policy. As the premium amount is integral to selecting a policy, a number of companies have a premium calculator on their websites which allows policyholders to calculate the premium they would be paying for particular policies. The premium calculator facility is available to all individuals who wish to calculate an estimate of the premium to be paid.

    The premium calculator for most insurance companies requires you to input details such as your gender, date of birth and mention if you are a smoker or non-smoker. The coverage amount required (depending on your needs) is to be entered as well.

    On doing so, the premium amount to be paid will be displayed on screen. The premium amount would be calculated based on the maximum policy term offered by the insurer.

    Any additional benefits included as part of the policy would be displayed below the premium amount payable.

    Some insurers provide an estimate based on the insurance plan selected, and will provide the premium amount based on the type of plan and coverage it offers.

    The premium calculator is an excellent way for individuals to check their premium contribution if they wish to opt for a particular term insurance policy. Popular Term Insurance Plans in India:

    Some of the popular term insurance plans in India are mentioned below:

    LIC e-Term:

    LIC e-Term Insurance plan offers policyholders coverage from a minimum of 10 to a maximum of 35 years. It covers individual policyholders only and cover is provided up to 75 years. The policy is available exclusively online, with the minimum Sum Assured being Rs.25 lakh. The policy makes provision for riders and add-ons as well, and has a 30 day free look period. The policy cover can be extended if the policyholder wishes to enhance coverage.

    ICICI Pru iProtect Smart Plan:

    The ICICI Pru iProtect Smart Plan provides term insurance for individuals as well as dependents. The plan is offered exclusively online. The plan covers policyholders for a minimum period of 5 years and a maximum of 40 years, with cover provided up to a maximum of 75 years of age.

    There are three options - the Life Option, Life Plus Option and the Life & Health Option which offer varying coverage depending on the policyholder’s requirement.

    The options offer coverage ranging from death benefits, terminal illness cover, permanent disability cover as well as accidental death benefit cover.

    Bajaj Allianz iSecure More:

    The Bajaj Allianz iSecure More plan is a term insurance plan offering a range of options to the policyholder. The plan is an individual coverage plan which can be extended to cover the policyholder’s spouse. The plan provides coverage for a minimum of 10 years and a maximum of 25 years. The plan also features an increasing cover every year, with a 5% increase in the Sum Assured, up to a maximum of 2 times the Sum Assured at the time the policy was purchased.

    The minimum Sum Assured is Rs.2,50,000.

    Policyholders can choose to receive the death benefit amount in instalments over a 5-10 year period.

    HDFC Life Click2Protect Plus Term Plan:

    HDFC Life Click2Protect Plus plan offering from HDFC provides policyholders with a variety of cover options, namely the Life Cover option, Extra Life with accidental death benefit option, Income option and Income Plus option. There is provision for both individual as well as joint coverage plans. The plans provide coverage for a minimum of 10 and a maximum of 40 years, with the plan providing coverage up to a maximum of 75 years. The minimum Sum Assured for these plans is Rs.25 lakh, with dependents receiving up to 125% of the premium in case of the policyholder’s demise.

    How Much Term Insurance Do I Need?

    There is no set formula that can be applied to answer the question of how much insurance is enough insurance. What can be done, when trying to answer this question, is to take into consideration the factors that have the maximum impact on the sum assured. These factors will include things like how much you can afford to pay as a premium, what is the sum assured that you think will be adequate for your families future expenses and is the sum assured you want available.

    Eligibility Criteria of Term Insurance:

    Before anyone can take a life insurance policy, they will have to meet certain eligibility criteria which can be:

    • The minimum age of the policyholder will have to be 18 years old when taking the plan.
    • The maximum entry age will depend on the minimum tenure of the policy.
    • The maximum age at the time of maturity for these policies can be 75 years but this could change from one insurer to the next.
    • The minimum age for maturity will be determined based on the minimum age at entry and the minimum tenure offered.
    • The sum assured will also be a factor in calculating the eligibility as many policies have a fixed minimum sum assured.
    • This may not be mandatory but some insurers may ask you to undergo a medical check-up prior to taking the policy.

    Things to know about term insurance plans:

    As explained, buying a term insurance plan is the most economical way of securing yourself and your dependents. There are multiple features and benefits associated with term insurance policies which makes them stand out from the rest of the insurance options. Let’s take a look at some of the must know features of term insurance policies.

    An economical approach towards financial security:

    Most of the insurance companies offer term life plans at lower rates of premium, because these plans offer coverage only for a predefined duration. What makes these plans cheaper is that, most of the times the person insured survives the policy term, in which case the company will have to pay nothing in return. However, this is not the case with TROP plans where the premiums are returned on survival of the policyholder. A simple term plan can be compared with a vehicle insurance policy which compensates only at times of an accident.

    Even term plans can offer better returns on investment:

    Even though term plans are opted widely by people worldwide, a considerable few are still hesitant to go for it because of the zero returns on survival of the term. However, some insurance companies offer a Term Return of Premium (TROP) plans, under which the person insured will be paid all the premiums that he/she has paid during the policy tenure. Generally, TROP plans are priced a bit higher than normal term insurance plans.

    A monthly income for dependents of the policyholder:

    Buyers at the time of application can choose whether the death benefits should be paid as a lump sum to the nominee or in installments. However, if at the time of claims the nominees choose to take the entire amount as a lump sum, they can avail the same at a reduced value.

    Enhancement of insurance coverage:

    In term plans, you also have an option to increase the level of insurance coverage at different stages of your life. The percentage of increase depends purely on your insurer and on the type of plan selected.

    Choose your premium term and policy term:

    Your term insurance plan allows you to choose the tenure at the time of policy inception. It’s an excellent feature which helps you to choose the plan based on your financial situation. This particular feature of term plans makes it a better risk management planner for loans and debts.

    Term Plan Vs Endowment Policy Vs ULIP:

    There are a lot of life insurance products that are available to customers and they can range from a term plan to an endowment plan to a ULIP. So the question really is how term insurance stacks up against ULIPs and

    Term Insurance Endowment Plans ULIPs
    Premium (for Rs. 1 crore) Approx Rs. 9,000 Approximately Rs. 60,000 NA
    Max sum assured No limit No limit Depends on fund value
    Premium payment Offers single pay, monthly, quarterly, half-yearly, yearly and limited pay options Offers single pay, monthly, quarterly, half-yearly, yearly and limited pay options Offers single pay, monthly, quarterly, half-yearly, yearly and limited pay options
    Maturity benefits None unless it’s a TROP Does offer maturity benefits Maturity benefits linked to market investments
    Risks No risks No risks Has risks since the premium is invested in the equity and debt markets

    The interpretations that we can draw from the table are:

    • For a sum assured of Rs. 1 crore, the premium for a term plan is about Rs. 9,000 whereas for endowment plans, it is much more and ULIPS don’t always offer a fixed sum assured.
    • The premium payment options are the same for all the insurance plans.
    • While ULIPS come with an inherent risk due to investments made in equity and debt markets, term insurance plans are quite safe.
    • If you opt for a tem insurance with a return of premium option then when the policy matures, you stand to get 100% of your premiums back.

    Term Insurance FAQ’s

    1. Q. Will every insurance company offer the riders?

      A.No. The riders are offered at the desecration of the insurance providers so they can differ from one provider to the next.

    2. Q.Can I take more than 1 term insurance plans?

      A.Yes, you can take more than 1 term insurance plans.

    3. Q. What if I want a sum assured that is in excess of Rs. 10 crore?

      A.In case the sum assured is really high, the decision to provide the policy will rest with the insurer and the policy issued only if the insurer is willing to insure for such high amounts.

    4. Q. Are there any situations under which the claims won’t be honoured?

      A.Yes. If your claim falls under any of the exclusions mentioned in the policy, the claim won’t be honoured.

    5. Q. What are some of the exclusions?

      A.The exclusions can include indulgence in activities that are illegal. They also include participating in activities that are known to be dangerous, example extreme sports. In the case of the policyholder committing suicide within the first year, only the premium paid may be returned.

    6. Q. What do insurers mean by healthy lifestyles?

      A.A healthy lifestyle can mean that the policyholder is not indulging in any activity that could harm their health. An example of this would be smoking.

    7. Q. What is the benefit that I get for health lifestyles?

      A.The main benefit that insurers offer for healthy lifestyles is a discount on the premiums payable.

    8. Q. Can I take a term insurance plan if I am an NRI?

      A.Yes. If you are an NRI then you can still take term insurance cover.

    9. Q. Does term insurance have a free-look period?

      A.Yes. Term insurance has a free-look period of 15 days, from the day you receive the policy document, within which you can surrender the policy in case you are not satisfied with it and get the premium refunded. There may be some deductions involved.

    10. Q. Do I have to pay penalties if my payment is late but within the grace period?

      A.Late payment policies may differ from one company to the other but generally if payments are made within the grace period then no interest is charged on the payment.

    11. Q. What is accidental death benefit?

      A. Accidental death benefit is a rider or add-on to term insurance policies by which the dependent will receive a pre-determined amount of money in the event of the policyholder’s death due to an accident.

    12. Q. What is the age limit for a term insurance policy?

      A.Different insurers and plans have different age limits for term insurance policies, with the limit ranging from 55 years to 70 years.

    13. Q. What is term insurance with monthly income?

      A.In such cases, the Sum Assured is decided on the policyholder’s monthly income after taxes. The death benefit paid out is 12 times the monthly income, inflated at 5% annually throughout the term of the policy.

    14. Q. Can I alter the duration of the coverage after the policy has been issued?

      A.No, it is not possible to change the duration of the coverage after the policy has been issued. However, some policies allow for extensions in the coverage period.

    15. Q. What is the maximum tenure for a term insurance plan?

      A.The maximum tenure for a term insurance plan depends on the insurance company and the type of plan opted for. The maximum tenure available is 40 years.

    16. Q. I smoke occasionally. Will I have to declare myself a smoker at the time of applying for the policy?

      A.If you have smoked in the last 12 months, you are required to declare yourself a smoker at the time of applying for a term insurance policy. If you do not and the insurer is made aware of this, you could risk losing your policy benefits.

    17. Q. How do I cancel my insurance policy?

      A.Cancelling your insurance policy can be done by notifying the insurer within 15 days of the policy being issued.

    18. Q. What are the eligibility criteria when applying for term insurance?

      A.The eligibility criteria for term insurance are as follows:

      • Should be a citizen of India.
      • Should be above the minimum entry age (18 years).
      • Should be below the maximum entry age (depends on insurer and plan).
      • Should be able to pay the plan premium.
    19. Q. Can I switch my term insurance plan to another insurance provider during the policy term?

      A.No, you cannot switch your term insurance policy to another provider during the policy term.

    20. Q. Can the dependent/nominee re-apply for a claim if it was rejected once?

      A.Yes, the nominee/dependent can re-apply for a claim if it was rejected before, and can approach the insurer’s grievance redressal cell if necessary.

    21. Q. What is a term insurance policy?

      A. Term insurances are the most inexpensive way of availing insurance coverage for a specific period of time. It is merely a risk cover and does not provide any benefits on survival.

    22. Q. What are the main reasons for buying a term insurance plan?

      A. Term insurance policies come with a multitude of benefits to suit the requirements of buyers. A common few are listed below:

      • It offers financial protection to your family
      • Takes care of your liabilities
      • Term plans come at easily affordable prices
      • Offers tax benefits under Section 80C and 10(10D) of Income Tax Act
      • You can avail additional benefits such as accidental death or disability rider, critical illness rider, etc.
    23. Q. Should I opt for a term insurance plan even if my employer provides an insurance coverage?

      A. Yes, it is advisable that you choose a term insurance plan even when your employer provides you an insurance coverage. This is because the insurance cover offered by your employer expires once you change the job.

    24. Q. What are the documents required for buying term insurance plans?

      A. The following documents are needed for buying term insurance plans:

      • Proof of age
      • Proof of residence
      • Photo identity proof
      • Salary proof
      • Photographs
    25. Q. What are the maturity benefits offered under term insurance plans?

      A. Except for TROP plans, term insurance plans do not offer maturity benefits. The sum assured is offered to the beneficiary only in case of death of the person insured.

    26. Q. Can I get loan on term insurance plans?

      A. No, policyholders are not eligible for loans as the policy doesn’t come with maturity benefits nor does it attain surrender value.

    27. Q. What happens when I change my country of residence a few years after choosing the plan?

      A. The term insurance plan will continue to be active even when you relocate from India. However, make sure that you keep your insurer informed about such a change.

    28. Q. Is there any advantage in buying a term insurance plan at a young age?

      A. Generally term insurance plans are available at lower prices for people who in an early stage of their life. Therefore, buying a term plan at a young age is definitely beneficial.

    News & Latest Articles On Term Insurance

    • Aadhaar-Based E-KYC Sufficient For Customer Verification By Insurer

      Bringing relief to many prospective insurance buyers, Insurance Regulatory and Development Authority of India (IRDAI) has cleared that Aadhaar-based e-KYC (electronic-know your customer) process will now be deemed sufficient for carrying out customer verification for insurance purchase. the regulatory board has also mentioned that the Aadhaar-based e-KYC can be done only after the consent is given by the customer for the same .

      In the case of direct sale of life insurance policies, it is compulsory as per regulatory guidelines that insurers conduct the KYC procedure before selling the policy. If the policy is being sold via any other channel, such as online, then KYC must be completed within 15 days after the sale of the policy. The aim of employing these practices is make the insurer make sure that such products are not being used as means of money laundering. For non-life insurance products such as motor insurance policies or health insurance policies, insurers are to compulsorily conduct the KYC process at the time of claims, as per IRDAI’s anti-money laundering guidelines. Additionally, the KYC will only be applicable when the claim settlement exceeds Rs.1 lakh.

      Unique Identification Authority of India (UIDAI) has laid down specific regulations, known as Aadhaar (Authentication) Regulations, 2016, for the purpose of verifying an individual’s details from the Aadhaar database. One method of verification makes the use of an OTP (one-time password), which will be sent to the individual’s registered mobile number. The entity (insurer) can get this OTP from the customer whose Aadhaar details they wish to verify to proceed with the sale. The advantage of this is that the insurer cannot access the customer’s details unless the customer provides them with the OTP to do so. This will help restricts unauthorised access to the customer’s demographic information.

      The second method of verification is via biometric authentication where the customer will be asked to provide biometric ‘proof’, such as their fingerprint. The Aadhaar database will give access to the entity (insurer) requesting for the details only if the biometric matches the information available for that particular Aadhaar number in the database. This has also been devised to prevent unauthorised access to the customer’s information. Additionally, IRDAI has clearly stated that even the Aadhaar-based e-KYC can only be done with the customer’s consent.

      20th September 2017

    • Insurance Industry Growth Driven By Private Life Insurers In August

      The life insurance industry continues to display remarkable growth and the situation looked quite promising as of August 2017. Last month, private life insurance companies registered a 29% year-on-year growth on their annual premium equivalent (APE). Life Insurance Corporation of India (LIC) registered Ape growth of 9.3% year-on-year at Rs.2,007.9 crore in August, which is lower than that of many other private insurance players. Senior industry experts are of the view that with a rise in equity markets, unit-linked insurance products are witnessing a far stronger growth at a faster pace as compared to traditional products.

      In its insurance report, Edelweiss said that the rise in financial savings and higher inflows following demonetisation have helped the industry register impressive growth. “Experts further anticipate proclivity for financial savings to continue and industry growth momentum to sustain,” it also said. Insurance companies such as Bajaj Allianz, IndiaFirst Life Insurance, SBI Life Insurance, and Kotak Life Insurance continue to record positive APE growth. As per the IRDAI (Insurance Regulatory and Development Authority of India) data, private insurance companies witnesses a 18.34% year-on-year growth in new premium which stood at Rs.18,251.98 crore in the current financial year, as against Rs.15,423.06 crore which was recorded in the corresponding period of last year. As per IRDAI data, for the month of August, the insurance industry recorded new year premium up to Rs.17,513.44 crore as compared to Rs.14,282.45 crore which was recorded in August of the last financial year.

      Individual APE of Life Insurance Industry (In Crore)

      Insurance Company Aug 2017 Year-On-Year Growth Percentage
      Bajaj Allianz 89.5 30.6%
      Birla Sun Life 63.1 24.8%
      ICICI Prudential 601 14%
      Kotak Mahindra Old Mutual 100.5 40.7%
      SBI Life 664.6 50.7%
      HDFC Standard Life 331.4 24.5%
      Max Life 214.7 23.2%
      Life Insurance Corp. 2007.9 9.3%

      18th September 2017

    • Max Life Insurance looking for business opportunities with insurance companies

      Rajesh Sud, the MD and Executive Vice Chairman of Max Life Insurance said that after the merger with HDFC Standard Life didn't go through, Max Life is looking for business opportunities with public and private sector banks interested or involved in the life insurance business. The merger between HDFC Standard Life and Max Life Insurance didn't go through as the Insurance Regulatory and Development Authority of India (IRDAI) didn't approve the merging of an insurance business with a non-insurance business. Sud spoke at the SHRM India Annual Conference and Exposition 2017 event and said that in order to keep up to date with the changes and win in a fast-changing environment, character, action, and empathy are the key for organisations.

      15th September 2017

    • Is a term plan a good tax saving scheme?

      Term plans are pure life insurance plans that offer maximum life cover for an affordable premium. Before choosing a life insurance plan, it is advisable to consider your financial objectives and insurance needs. Life insurance serves not only as an investment plan but also a tax planning tool. An assessee is eligible for tax deduction for insurance premiums paid towards a term plan under Section 80C of the Income Tax Act, 1961.

      Eligibility for tax saving scheme

      Hindu Undivided Families (HUF) and individuals which includes spouse and children, are eligible to avail tax benefits for premium paid towards a term plan under Section 80C of the Income Tax Act, 1961. Term plan serve as a tax planning tool but it is imperative to know the terms and conditions under which the tax benefits are applicable.

      Tax deductions

      The total tax deduction under Section 80C is limited to Rs.1.5 lakh. Tax benefits for term plans are limited to 20% of the sum assured if the premium exceeds 20% of the sum assured during the financial year. For policies issued after April 1st, 2012, tax deductions can be claimed on the premium amount if it is not more than 10% of the sum assured.

      In the case of individuals with specified ailments or severe disability, tax benefit is available if the premium is not more than 10% of the sum assured. Individuals may be eligible for tax deductions on maturity proceeds under Section 10(10D) of the Income Tax Act, 1961. Bonus received under a policy term is not taxable. Death benefits paid as a lump sum amount to the nominee in the case of the demise of the life insured during the policy term is tax-free.

      14th September 2017

    • IPO of SBI Life Insurance to Start on September 20

      A subsidiary of India’s biggest lender SBI, SBI Life Insurance will enter the capital market on the 20th of September in an effort to raise almost Rs.8400 crore. The first share sale offer is set to open on the 20th of September and close on the 22nd of the same month, according to SBI. 2017 marks the second listing of a life insurance company following ICICI Prudential Life Insurance which went public in 2016. Sources have revealed that SBI Life Insurance’s price range for the IPO will be between Rs.685 and Rs.700, and that the company will likely raise around Rs.8400 crore. The public issue of SBI Life involves its promoters who are offloading almost 12 crore shares whose face value if Rs.10 per share. SBI is expected to dilute around eight crore shares while four crore shares will be offloaded by BNP Paribas Cardif SA. SBI Life Insurance is a joint venture between the State Bank of India and BNP Paribas Cardif which is an insurance holding company of France.

      13th September 2017

    • IRDAI has permitted usage of OTP for opening e-Insurance Account

      The Insurance Regulatory and Development Authority of India (IRDAI) has permitted the usage of One-Time Password (OTP) for opening e-Insurance Account (eIA). OTP is generated by the computer system and sent to the individual's mobile number or email to authenticate a transaction. OTP is allowed as an alternative to electronic signature which was previously considered a valid authentication. IRDAI has also permitted the verification of the e-Insurance Account holder through the e-KYC authentication facility provided by the UIDAI. UIDAI provides biometric authentication of an individual based on Aadhaar.

      11th September 2017

    • ICICI Lombard General Insurance All Set To Launch IPO on September 15

      ICICI Lombard General Insurance Company, a subsidiary of ICICI Bank, is all set to launch its IPO (initial public offer) on Sept 15. They are planning to sell up to 8,62,47,187 equity shares via the subscription, out of which up to 3,17,61,478 equity shares are being sold by the promoter, ICICI Bank, and up to 5,44,85,709 shares being sold by investor Fal Corporation. A reservation of up to 43,12,359 equity shares will be set aside for purchase by ICICI Bank shareholders. The issue will be open from Sept 15 to Sept 19.

      ICICI Lombard was established as a joint venture between India’s ICICI Bank and Fairfax Financial Holdings, based in Canada. According to the draft red herring prospectus filed by the insurer with SEBI (Securities & Exchange Board of India) in July, ICICI Bank holds a 62.95% stake in its general insurance company, FAL has 21.92% shareholding, Red Bloom Investment with 9.01% and Tamarind Capital Pte Ltd hold 1.59%. ICICI Lombard is the largest private-sector, non-life insurer in India, based on their gross direct premium income from FY17.

      ICICI Securities, DSP Merrill Lynch Limited, and IIFL Holdings will be global co-ordinators and book running lead managers to the issue. Edelweiss Financial Services, CLSA India Private Limited, and JM Financial Institutional Securities are book running lead managers to the issue. In addition to ICICI Lombard, 2 state-run general insurers - General Insurance Corporation of India and New India Assurance Company, along with 2 private life insurers - SBI Life and HDFC Standard Life are also planning to launch their IPO for which they are awaiting approval from SEBI.

      In its subsidiary ICICI Prudential Life Insurance, ICICI Bank has lowered its stake to 54.89% percent via the IPO that will launch later this month. ICICI Lombard is also the first life insurance company to be listed on the stock exchange.

      7th September 2017

    • What To Consider Before Taking a Term Plan

      If you want to purchase a term insurance plan, there is no shortage of them in the financial market. Term plans are an affordable and efficient type of life insurance which is ideal for people of all ages, ranging from young professionals to retired people. When it comes to purchase insurance, insurers are always trying to compete with each other so they can make the maximum sale. In order to do that, they offer loads of benefits with their policies which is a good thing for the customer. However, when multiple insurers do that, it can be difficult for one to choose between insurers for the right plan. To make the challenge a little simpler, here are some factors which one can look to consider when buying a term plan.

      • You must assess your needs and requirements before taking the term plan. Take your assets and liabilities into account.
      • After you have evaluated your needs, you can better decide the amount of coverage that you will need to sufficiently cover your dependents.
      • When deciding on a plan, look at the premium being charged and ensure that it is proportionate to the sum assured that is being provided under the plan.
      • Deciding the tenure of the plan is a crucial question. Look at your liabilities and calculate how long you will take to pay them off.
      • There is one term plan which provides returns of premiums when the plan reaches maturity. However, the premiums for this plan will be higher than those of a normal term plan.
      • Another important factor is choosing the right beneficiary. Appoint someone who you think is capable of handling finances i.e. the sum assured amount which will be received as death benefit.
      • Another important thing to consider is the life stage you are at when planning to take a term plan and which of your family members do you think will require financial cover.
      • One of the most important factors to consider when taking a term plan is reviewing your liabilities as they are paramount in deciding the amount of cover you should take and for what duration.
      • When taking a term plan, it is imperative that you decide whether or not your dependents are adept at handling and mam=nagging finances. Are you confident that they can wisely invest the sum assured received after your death or do you think you need to provide them with a monthly income.
      • Many term plans also offer the provision of providing the sum assured partly in lump sum and partly as regular income.
      • Another factor to consider when deciding the amount of cover under a term plan is factoring the cost of inflation when deciding the appropriate sum that will shield your dependents financially.

      6th Septemberr 2017

    • The Parties Involved In An Insurance Contract

      As we all know, an insurance policy is a contract between not only the insurer and the insured but also other parties who are an equally important part. Let’s take a quick look at all the parties which are involved in an insurance contract.

      • Insured - The insured is the individual who is being covered against risks under the policy. In many cases, the insured may also be the policyholder. If the insured is not a policyholder, the insurer will ask about the insurable interest before approving the application. Close family members or business partners will have an insurable interest in an individual. Having insurable interest means that the policyholder must show that they will undergo financial loss in case of the death of the insured. This is the reason a person can not just purchase life insurance on anyone they wish.
      • Insurer – Insurer would refer to the insurance provider or company which provides the insurance cover to the insured in exchange for premiums.
      • Policyholder/Proposer/Owner – This is the person who purchases the insurance policy. The right of ownership over the policy lies with the policyholder and he/she will have the right to changes to the policy. The policyholder or owner is also liable to pay the premiums of the policy. Some of the rights of a policyholder are right to transfer ownership of the policy, right to alter policy provisions, right to surrender or cancel the policy, right to pledge the policy for a loan or to borrow against its cash value, right to name or change a beneficiary, right to decide how the death benefit will be provided to the beneficiaries, among other rights.
      • Beneficiary – This is the person who will be entitled to receive the benefits that will be payable under an insurance policy. Beneficiary or beneficiaries can be a spouse, parents, children, siblings or business partner, etc. there can be one or more beneficiaries named in a single policy. Under life insurance, beneficiaries are usually categorized as primary and contingent. Primary beneficiaries are those who will receive the death benefit in case of the death of the life assured. Contingent or secondary beneficiaries are those who will receive the death benefit if the primary beneficiary passes away before the life assured does.

      5th September 2017

    • Breakeven Likely To Be Delayed Due To Strategy Shift, Says Aegon Life CFO

      Aegon Life Insurance Company, a leading general insurance provider in India will be experiencing a delay in achieving a breakeven in 10 years (around FY19). The insurer which was earlier all set to break even by FY19, will see that getting delayed by two to three years, said Mr. Rajeev Chugh, Chief Financial Officer of Aegon Life. In August 2016, Aegon Life shifted its strategy from a multi-channel presence to a more focussed digital one. The consequence of this was the insurer exited the agency channel, except for renewal of existing policies. The company now employs nearly 4,000 agents, which is about 2,000 less than the number employed before. The second strategy that the insurer has adopted is to have direct customer engagement by appointing relationship managers who will directly be communicating with customers. Not only will these relationship managers self-source but will also cross-sell policies to existing customers. The third pillar of their new strategy is to focus on group protection business which will provide access to a larger customer base.

      To implement these strategies, the insurer will work with equity brokerages and wealth managers and equity brokerages in order to tap into their client base. The immediate impact that this change in strategy had was a decline in premium income of the previous financial year, which came down from Rs.136 crore in FY16 to Rs.91 crore in FY17. This, Mr. Chugh said was due to the mid-course correction which will even out over the span of the next 2 years.

      For the current fiscal, the CFO expects a 50% growth which will is likely to push the turnover to about Rs.150 crore. He is also hopeful that the shift in emphasis will also result in a 70% to 80% rise in the customer base over the next 2 years.

      4th September 2017

    GST of 18% is applicable on life insurance effective from the 1st of July, 2017

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