Sunday, June 29, 2014

Term Insurance

One of my friend, who is very financial savvy (self proclaimed) was telling me the importance of term insurance. He was giving very useful insights into term insurance.
However, on little probation, I learnt that he himself has no insurance. When I insisted on a reason, he told me that he was finding it too much effort to go through all the websites and search for best product. As usual, I told him that there is no best product available in the market. All you have to do is go with the company you are comfortable with (Ashal's line). Still he insisted on comparing on various quotes and that he found boring.
He requested me to come up with a post which would give various quotes on term insurance. So, if you are looking to buy term insurance, read further.

Warning: Term insurance will not give anything on maturity. Still interested? Ok, read on.
Wait, term insurance will not give anything in return if you surrender. You did not close the window? Ok, now you can read...

To make my life easy in creating this post, I will consider only below companies: HDFC, SBI, Aviva, LIC, and Bharti AXA.

I hope, this ready made information on term plans, forces many of my friends to rise and select one.

All the data has been taken from their respective sites. However, the data may change from time to time 

Let us see on what parameters we would be comparing the companies:
  • Premium
  • The so called Claim Settlement Ratio 
  • Solvency ratio

All the data is valid for 32 years of age (01-Jan-1982), male, non-smoker, for 25 years and 1 Cr SA (Indian’s fascination with 1 Cr :P)

HDFC Click2Protect:
  1. Premium: 11000 per year (excluding taxes)
  2. CSR: 96.56%
  3. Solvency ratio: 227%
  4. Miscellaneous:
  • No medicals upto 75 lakhs for non-smoker male till 40 years of age (this is what they write on their websites and off-course may be subject to case)
  • Premiums paid are tax exempted under section 80C (another attraction :P)
  • Maturity amount received (to nominee) is tax exempted under section 10(10D)
  • In general:


SBI eShield:
  1. Premium: With ADB: 14821 and without ADB: 12686 (ADB: Accidental Death Benefit)
  2. CSR: 94.41%
  3. Solvency Ratio: 225%
  4. Miscellaneous:
  • Facility for Accidental Death Benefit
  • Premiums paid are tax exempted under section 80C
  • Maturity amount received (to nominee) is tax exempted under section 10(10D)
  • In general:


Aviva i-Life:
  1. Premium: 9046 per annum (inclusive of service tax)
  2. CSR: 87.7%
  3. Solvency Ratio: 415%
  4. Miscellaneous:
  • Feature to receive annual payout to family (instead of one time payment) for 15 years in parts (not recommended)
  • Premiums paid are tax exempted under section 80C
  • Maturity amount received (to nominee) is tax exempted under section 10(10D)
  • In general:


LIC online term plan:
  1. Premium: 15843 (inclusive of taxes)
  2. CSR: 97.7 (ahh the iconic value)
  3. Solvency Ratio: 154%
  4. Miscellaneous:
  • Sirf naam hi kafi hain :)
  • Premiums paid are tax exempted under section 80C
  • Maturity amount received (to nominee) is tax exempted under section 10(10D)
  • In general:

Bharti AXA e-protect:
  1. Premium: 7900 per annum (exclusive of service tax)
  2. CSR: 89.5%
  3. Solvency Ratio: 227%
  4. Miscellaneous:
  • Additional hospital benefit rider
  • Premiums paid are tax exempted under section 80C
  • Maturity amount received (to nominee) is tax exempted under section 10(10D)
  • In general:

Note: Manish has written many fantastic articles on term plan. Please read them too.

Note: All the data has been pulled from their respective sites.


2 comments:

  1. So what's the take now from the same friend? :)

    Thanks

    Ashal

    ReplyDelete
    Replies
    1. He thanked me... however, now he says that you have not compared on the points like customer care, size of the company, latest issues (he gave me an example of Aviva), etc... In short, he will procrastinate....

      Delete