Term Plans – The new flavour of market

Lot’s of Indians are shopping for term insurance plan online with insurers wooing customers through a wide range of offerings at lower prices.

Edelweiss Tokio, one of the latest entrants in India’s insurance sector, has launched a brand new online Term insurance — My Life+ that offers a 30-year term insurance of 1 crore for 25-year-old male at just Rs.5562 as annual premium.

In comparison, the annual premium for an identical plan by Reliance Life is around Rs. 6420, whereas the other insurers like HDFC Life and ICICI prudential are offering at over Rs. 9500.

LIC has also come up with its own e-term plans this year. In a term insurance, an individual pays the premium for a particular period. In case the insured person dies, his/her the family receives the insurance amount. In some cases, the lumpsum amount is paid and in others the family receives the partial amount immediately and the remaining amount is paid on monthly basis for a specific period.

“A person shopping for online insurance fills the details himself and so is probably going to fill correct details. There’s no agent commission concerned. That’s why the premium is lower,” said Deepak Mittal, CEO, Edelweiss Tokio Life.

The insurance term period offered is additionally on the increase. just in case of Edelweiss Tokio’s plan, one has the choice to pick a term period up to the age of eighty years.

Financial advisers, however, said increasing competition in the sector is resulting in lower premiums, which may not be sustainable. “There is more to insurance than pricing. One must be sure of the claim settlement procedure and the past track record of a company” said Arvind Laddha, CEO, Vantage Insurance Brokers.

Companies are planing to launch additional compare online insurance plans. “We have six online products pending approval with the regulator” said KS Gopalakrishnan, MD, Aegon Religare Life Insurance.

Future Generali Life Insurance is also planning to launch a new online insurance product next year.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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