Online Term Insurance and Its Providers in India
Madhu- “Hi Bindu, how have you been?”
Bindu- “I’m confused Madhu! I need some insurance advice.”
Madhu- “Well that’s perfect timing Bindu. My husband just opted for an online term insurance plan the other day. So, all the details are fresh in my mind.”
Bindu- “Term Insurance? Is that very different from a regular life insurance? And how many such plans are available in the market? Are there any maturity benefits to them as well?”
Madhu-“Relax Bindu! Let’s take one question at a time.”
What is term insurance?
Term insurance is like a life insurance policy for a limited number of years or ‘term’. If the policy holder expires while the policy is active, then a death penalty is given. Once the policy expires, the holder has the option to renew it or let the policy end.
Difference between term insurance and regular life insurance:
While life insurance covers the entire life span of the holder, a term insurance plan covers a limited number of years. Usually, the premiums paid at the start are also lower than those for a traditional life insurance policy. Also, term insurance plans do not provide benefits beyond those mentioned, unlike life insurance plans which can double up as wealth accumulation plans. There is an option available to convert a term policy to a permanent life insurance policy.
Online Term insurance in India: The first term insurance plan called ‘i-Term’ was introduced by Aegon Religare. Soon after, a range of other insurers launched their own plans, one cheaper than the next, to attract market share. As of now there are 7 online term insurance plans in India.
Following are the seven online term plans:
- Kotak Life Insurance- provides an online term plan which is called the Kotak Term Plan/Kotak Preferred Term Plan and has offered 4014 ,Rs30 L premium and 8630 ,RS 70 L premium.
- Aviva - provides an online term plan which is called ‘I-Life’ and has offered 4236 ,Rs 30 L premium and 6753 ,RS 70 L premium.
- Metlife - provides an online term plan which is called ‘Met Protect’ and has offered 4269 ,Rs30 L premium and 7969 ,RS 70 L premium.
- ICICI - provides an online term plan which is called the ‘ICICI Pru I–Protect’ and has offered 4302 ,Rs30 L premium and 8521 ,RS 70 L premium.
- Aegon religare – provides an online term plan which is called the ‘I-Term’ and has offered 5160 ,Rs30 L premium and 8400 ,RS 70 L premium.
- Future Generali – provides an online term plan which is called ‘Smart Life’ and has offered 6287, Rs30 L premium and N/A ,RS 70 L premium.
- ING Vyasa also provides an online term plan.
How online term insurance works:
The investor calculates the premium and accordingly buys the policy online. He submits all the required documentation such as age proof, address proof etc. Once all the documentation is verified and approved, the investor gets a premium quote which can be paid online.