5 Best Term Insurance in India for 2018 - Pure Risk Protection

5 Best Term Insurance in India for 2018 – Pure Risk Protection

Roboadviso     Top 5 Mutual Funds     Posted On, Mon 12th March, 2018     No comments
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best term insurance plan

One of the most important life decisions that every person with dependents or a family needs to make is to select the best term insurance plan.

A term insurance plan provides the highest ‘value for money’ proposal; there is no debate to this fact. Term insurance can be described as life insurance in a basic form wherein the policyholder’s family/dependents/nominees get a fixed assured amount upon the demise of the policyholder during the term of the policy. If the policyholder does not die during the tenure of the term insurance policy, then he/she does not get paid any amount.

Almost all term plans structure the premium on the basis of 3 main factors, i.e., term of the policy, age of the insurance seeker, and the sum assured selected by him/her.

Term Insurance Companies and Claim settlement Ratio

One of main items that one needs to lookup when searching for the ideal term insurance policy is the claim settlement ratio. This ratio offers information about the life insurance company’s settlement ratio, i.e., the number of claims that are settled by the company when the policyholder dies during the policy term.

The figures and data that are present in different term insurance products are something that most of us do not relate to. Hence, understanding them can be quite difficult. This is why the regulatory body IRDA has laid down mandatory rules for all term insurance providers about the use of easy methods of calculation which can then be used by consumers to find the claim settlement ratio.

The simple method used for calculation of the claim settlement ratio is derived from the overall number of claims that an insurance company receives against the total number of claims that it eventually settles.

Thus, the formula for calculation of claim settlement ratio is:

(Total number of term insurance claims settled/Total number of all claims made) x 100

For example, if 4000 claims are received by a term insurance provider in a single financial year and if the company settles 3900 claims from the total of 4000 claims in the same year, then the claim settlement ratio will be (3900/4000)*100 = 97.50 percent.

  • Consequently, for the above example, the ‘claim rejection ratio’, i.e., the total number of claims rejected by the insurer, will be (4000-3900)*(100/4000) = 2.5 percent.
  • In the above scenario if we assume that 20 claims are still pending for approval to settle, then the pending ration will be (20/4000)*100 = 0.5 percent

Keeping all the major calculation as simple as possible allows the users to easily understand the policy and the company’s standing. This in turn enables consumers to select a term insurance that will be ideal for them.

The reason for choosing claim settlement ratio as the main factor for rating of insurance companies and the term insurance policies is the fact that it is the only factor which can prove to be very useful to consumers when they are searching for a term policy. An insurance company with a high claim settlement ratio is typically indicative of a trustworthy and reliable company, while the credibility of an insurance company with low claim settlement ratio is up for debate and questioning. Hence, term insurance providers with low claim settlement ratio will not be attractive for new consumers as the available data shows their inability to settle their policy claims.

Presented below is a list of 5 best term insurance plans/companies in India as per their claim settlement ratio for the financial year 2016-2017.

  1. Life Insurance Corporation of India/LIC

LIC is one of the most trusted brands in India and most term insurance seekers tend to opt for the life insurance plans offered by this company. As per IRDA records, the claim settlement ratio of LIC for 2016-17 was 98.31 percent.

A really good term insurance plan from LIC is the e-Term insurance plan which is a pure life insurance plan. Some of the features of the e-term plan are:

  • Individuals between ages 18 and 60 years are eligible. The maximum maturity age is 75 years.
  • The tenure of the policy ranges between 10 and 35 years.
  • For non-smokers the minimum sum assured is INR 50 lakhs, while it is INR 25 lakhs for smokers. There is no limit to maximum sum assured.
  • The plan covers all types of death, including accidental deaths. Suicide is not covered for the first year.
  • For a 30 year old non-smoker, the premium for a 30 year policy with sum assured of INR 1 crore is around INR 15,600 per annum.

 

  1. MaxLife Insurance

MaxLife Insurance has quickly grown in popularity due to its high claim settlement ratio over the last few years. As per IRDA records, the claim settlement ratio of MaxLife Insurance for 2016-17 was 97.81 percent.

MaxLife has many different products; some are considered unattractive like the premium return term plan, while others like Max Life Online Term Insurance plan has been quite popular. A few features of Max Life Online Term plan are listed below:

  • Individuals between ages 18 and 60 years are eligible. The maximum maturity age is 70 years.
  • The tenure of the policy ranges between 10 and 40 years.
  • The minimum sum assured is INR 25 lakhs, while the maximum sum assured is INR 100 crores.
  • The plan comes with comprehensive accident benefit rider
  • For a 30 year old non-smoker, the premium for a 30 year policy with sum assured of INR 1 crore is around INR 9,410 per annum.

 

  1. HDFC Life Insurance

HDFC Life is known to be one of the insurance companies with a high claim settlement ratio over the years. As per IRDA records, the claim settlement ratio of HDFC Life for 2016-17 was 97.62 percent.

A number of products have been launched by HDFC Life and one of the best ones is HDFC Click 2 Protect Plus Term plan. A few features of this plan are as follows:

  • Individuals between ages 18 and 65 years are eligible. The maximum maturity age is 70 years.
  • The tenure of the policy ranges between 10 and 40 years.
  • The minimum sum assured is INR 25 lakhs. There is no limit to maximum sum assured.
  • Some of the riders available with the plan are accident disability, income option, extra life option, and income plus option.
  • For a 30 year old non-smoker, the premium for a 30 year policy with sum assured of INR 1 crore is around INR 10,400 per annum.

 

  1. SBI Life

SBI Life has consistently been in the list of best term insurance providers in the country due to its high claim settlement ratio. As per IRDA records, the claim settlement ratio of SBI Life for 2016-17 was 96.69 percent.

One of the best products offered by SBI Life is the eShield Term Insurance Plan. A few features of this plan are:

  • Individuals between ages 18 and 60 years are eligible. The maximum maturity age is 70 years.
  • The tenure of the policy ranges between 5 and 30 years.
  • The minimum sum assured is INR 20 lakhs. There is no limit to maximum sum assured.
  • The plan comes with accident death benefit rider
  • The plan covers all types of death, including accidental deaths. Suicide is not covered for the first year.
  • For a 30 year old non-smoker, the premium for a 30 year policy with sum assured of INR 1 crore is around INR 13,500 per annum.

 

  1. ICICI Life Insurance

As per IRDA records, ICICI Life Insurance has always been in the top section of the list with regards to claim settlement ratio. The claim settlement ratio of ICICI Life Insurance for 2016-17 was 96.68 percent.

Some of the popular products offered by ICICI Life include the ‘heart and cancer plan’ and the ‘ICICI iProtect Smart Term Insurance Plan. A few features of the iProtect plan are mentioned below:

  • Individuals between ages 20 and 65 years are eligible. The maximum maturity age is 75 years.
  • The tenure of the policy ranges between 5 and 40 years.
  • The minimum sum assured is dependent on a minimum premium of INR 3,600 per annum. There is no limit to maximum sum assured.
  • Some of the riders available with the plan are critical illness benefit, waiver of premium on disability, and terminal illness benefit/death benefit. Along with accidental benefit, 34 critical illnesses are covered under this policy.
  • For a 30 year old non-smoker, the premium for a 30 year policy with sum assured of INR 1 crore is around INR 10,500 per annum.

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