How to choose Best Term Insurance Plans in India

How to choose best term insurance plans in India-2013

How to choose Best Term Insurance Plans in India

Do you know the best term insurance plans in India? Do you think buying a term insurance plan from best insurance company would be sufficient? Do you have all the information on which you can decide the best term insurance plans? Today we would discuss about the factors which contributes in choosing the term insurance plans which are best.

What is term insurance plan?

Term insurance plan is life insurance which provides coverage at a fixed premium for a limited period of term. After the period expires, coverage at the previous paid premiums is no longer guaranteed and customer would forgo coverage unless renewed.

Why you should buy term insurance plan?

Term insurance plans are available with low premiums. Since there is no maturity amount attached, these term insurance plans are available with low premiums. These plans would provide coverage for higher insurance with low premium.

You can also read: My friend's friend who has been keep on investing and taking insurance, but missed to keep the family updated and they are now suffering.

How to choose best term insurance plans in India

Broadly there are 3 factors which would effect in choosing the best term insurance plans

1)   Check high claim settlement ratio: The important factor of selecting any term insurance plans or any other insurance plans is claim settlement ratio. Claim settlement ratio is nothing but the no. of claims the insurance company has settled over the total claims received. Say if an insurance company has received 100 claims, but settled only 90, it would be 90%.

  • If you are not there and your family is supposed to receive the insurance claim, but insurance company has rejected this. Then why you need to buy the term insurance plan? Hence it is important that you check the claim settlement ratio before taking the policy.
  • However there are various factors which would affect your claim rejection.
  • When you buy an insurance policy, do read all the terms and conditions. Your agent might be hiding certain conditions where later the claim might get rejected.
  • Disclose all factors like whether you are smoker and drinker. If you hide this and it would get detected later on when you are not there, there are 100% chances that your family claim gets rejected
  • When you are taking multiple insurance policies, you better disclose them. There are chances that the data might be incorrect in some of the policies and it would be a positive point to insurance company to reject any such claims at a later point of time.

​You can get the claim settlement data from IRDA website –> Annual reports (www. The latest report was released in Nov-12 pertaining to 2011-12 and below is the snapshot from the report. 

best term insurance plans in India-Claim settlement ratio-FY2011-12

2)   Do not look just low premium term insurance plans as best: If you are thinking of choosing a term insurance plan which offers with low premium, then you might be wrong. Low premium could be a factor but cannot be only factor. Low premiums term insurance plans might have several conditions attached to process the claim. Know them upfront, else your family would be trouble at later point of time.

3)   How good the insurance company is? There are several private insurance companies which came in the last few years. People still trust Life Insurance Corporation. If you see above data it says claims settlement ratio is 97.42% for LIC. Now you believe why people believe LIC. I do not say you should not go for private insurance companies. But how the companies are able to build trust among the insurers is the question we should ask. One of the methods of check is looking at the growth in insurance policies taken the insurers from an insurance company.

4)   Comparison of terms and conditions: Another factor can be, to look at the terms and conditions of various insurance companies offering term insurance plans and choosing the best one among them. This is a tricky one as there are no standard rules as to what is the impact of such terms and conditions.

5)   Take two term insurance plans: One way of diversifying the risk is taking two term insurance plans from two different insurance companies. In case there is a rejection from one company, you can still hope to get claim from another insurance company.

Conclusion: Choosing a best term insurance plans is easy once you know the factors which would affect it. I feel the above 5 factors would definitely help in choosing the good term insurance plans.

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Topic: How to choose best Term insurance plans in India


Article by Suresh

Suresh KP i.e. me have written 500+ articles on this blog. I love doing analysis and identifying the Best investment options.


  1. prashant says:

    sir my age 25 running n net slary is 18000pm.i I smoke only one cigarette a day or in two days and drink once in a month I plan to buy max life policy for 50l for 35 years as non smoker is it OK coz max will hav med test if I clear med test as non smoker. can I be 100 % sure that ll b no probllen in future. what else u suggest also plz tell me if I should take riders seperately or with same policy.

  2. c naik says:

    HI Suresh Sir,

    Kindly give your valuable suggestion on below…

    I have 6 nos of lic policies which i want to discontinue and planning to buy some good term plan/medical insurance plan and balance amount wants to invest in Mutua fund through SIP and Bank FD.
    I am not sure which from below policy to continue and whch one to discontinue…..your advice will help me to take corect financial decision.
    1) Jeevan Anand—1 lack SA and policy start dt: 2004( QTLY premiu-1539/-)
    2)Child carier—–1.5 lacs SA and policy start dt: 2008(QTLY premium-3792/-)
    3) Jeevan chaya–2.5 lac SA and policy started dt: 2008( HYL premium-7053/-
    4)jevansurabhi (20 years )-0.7lac SA and policy started dt:2007( HLY premium-3308/-)
    5)jeevan surabhi(25 years)-0.5lac SA and policy started dt: 1999(QTLY PREMIUM-991/-)
    6)Endownment ass.policy-0.6 lac SA and policy started dt: 1999(QTLY premium-585/-) surabhi

    • Suresh KP says:

      Naik, You are the best judge for surrending the policies. Total policies SA is Rs 7L which you can get with Rs 3,000 to Rs 4,000 yearly premium. You are paying Rs 47,500. Invest balance of Rs 43,000 per annum in mutual funds or bank FD’s, you would get good returns.

  3. rajkumar says:

    Hi Suresh! Great to read your blog. I am presently an NRI. I am going to switch over my job. S I will be there in India for 3 months break as ordinary resident. After that, again I will become NRI for around 10 years. I want to take LIC onlne E term policy while I am in India for 10 years.Is this possible? Will there be any problem for my family if any claim during my NRI status? And also medical will be covered for my wife and one daughert under 16  by my company insurance policy. My elder daughter will not be covered. Is it better to go full family medical insurance in India because my family mostly ( around 8 months) live in India?

    • Suresh KP says:

      Rajkumar, LIC eterm can be taken by resident Indians. currently this policy is not clear about NRI’s. You should stay away without having clariting on this. Please take full medicla insurance in India for your family.

  4. Dr Jain says:

    My financial adviser hasrecommended Kotak Assured Savings Plan for my son aged 26. I am not sure if this is the right plan for him. Please help me in deciding and suggest a suitable alternative in case it is not appropriate.

    • Suresh KP says:

      Hi Dr.Jain, If you are conservative investor, you can invest. However the returns would be nominal between 4% to 5.5%. But you need to ask one question to your advisor that what happens if you take term insurance plan and invest balance amount in any bank FD or mutual funds ? Just check this and let me know the reaction. Many of us knowingly or unknowingly get trapped into such plans. 

      • Dr Jain says:

        I did ask him and he said that the Kotak plan has the advantage of being tax exempt under sectrion 80c and 10(10D). In fact, he has suggested an additional term plan for 1 crore. 

        • Suresh KP says:

          Hello Dr.Jain But one point he missed to update is all money back plan insurance plans would have this feature i.e. 80C exemption in every financial year about premium paid and 10D about maturity benefit exemption and this is not just limited to Kotak. Regd your second sentence, you should have asked him why he is suggesting child plan when you are taking term plan for Rs 1 Cr. I would love to hear his response on this. Pls update. It is not just for fun, but your hard earned money you are investing.

          • Dr Jain says:

            I meant that in comparison to bank FD and mutual fund, Kotak Assured Savings Plan is more tax efficient. Don't you think so?

            And what do you mean by 'child plan'?

          • Suresh KP says:

            None of the insurance savings plans are tax efficient. They provide 4% to 5.5% returns per annum. Bank FD’s would provide 9% pre tax returns. Child plans would provide risk coverage in absense of working parent. Alternatively you can consider term insurance and invest balance amount in bank FD or mutual funds which are low risk investments.

  5. Dr Jain says:

    Can you suggest a good fund to invest Rs 3 lakhs for 15-30 days? Iguess it would be a liquid fund, but which one? Any other option would be welcome.

    • Suresh says:

      Hi Dr.Jain. Yesterday, I invested in 2 liquid mutual funds. 1) Reliance Liquid TP fund 2) IDFC Cash fund. I felt they are good for short term of 30 days to 6 months. You can review and invest.

  6. Dhananjaya says:


    I need to know specifically on following points in relation to term plan:-

    1. Term Plan :- Is it advisable to take more than one term plan then to opt for one with high value.

    2. Riders:- Is it advisable to take riders( e.g. critical illness + permenant / temporary disability  with the term plan ( pacage ) or to go seperately for each rider.

    3. Value of Riders:-  Is there any way of calculating the rider value or it is fix by IRDA.

    4. Proposed insurance agency:- I am in touch with Bharti axa ( Plan e protect ) for the term plan, how you rate this product.



    • Suresh says:

      Hi Dhananjay 1) Yes, consider taking two term insurance plans 2) You should include the riders as they would be useful thought you would be paying addl premiums 3) No, it would depend on the insurance company and varies for each and every rider 4) I have not reviewed this yet. Would do that in next few weeks. I would rate the insurance companies in this order with the settlement ratio 1) LIC, 2) HDFC 3) Birla SL 4) ICICI Pru etc.

  7. Ankit Rastogi says:

    Dear Sir,

    I have taken a term plan of aviva life insurance last year, now i have heared that aviva is going back from india what should i do should i contiue or not

  8. Nanda says:

    Hi Suresh,
    I have recently applied for a LIC term insurance (SA: 40 lakhs). Medical tests are completed and I’m expecting the policy to be issued soon.
    Recently I read somewhere that it is mandatory to declare all our old insurance policies in the application form. I have 1 endowment policy and 1 term insurance policy (from ICICI) but I haven’t mentioned about it in the LIC term insurance application form.
    Now what do I do? Can I change/update this even after the bond has been issued?


    • Suresh says:

      Hi Nanda, Yes you should do it as it is part of their terms and conditions. You can appraoch them now to update the form.

    • Karthik says:

      Hi Nanda,

      I'm planning to go for a similar plan. What's your age & your annual premium, if I may know?

      • Nanda says:

        Hi Karthik,

        I'm 31 years old. As stated, my SA for the term plan (term of 30 years) I've chosen is 40lakhs. The annual premium turned out to be Rs 14280.



        • Karthik says:

          Thanks Nanda.I'm planning to go for the same amount for 35 yrs (I'm 28) and it works out to 14600 (without tax). Fair call?

  9. Karthik says:

    Hi Suresh,
    Do you know if it is possible to buy an LIC Term Plan without the help of any agent? I registered on their website for buying a term plan, and I got a call today explaining the details of the plan, but it appears to be from a sales agent and not an LIC employee. Is there no other way for this?

    • Suresh says:

      Karthik, As per my knowledge, you can buy LIC policy by visiting LIC Branch. If you ask their representative to come to your place, they would not do. They would inform LIC Agent and he would do it. But it is common to go through LIC Agent for LIC polcies as an individual would not incurr any additional costs if he goes thru him/her. 

  10. Manish Jain says:

    Hello Suresh,


    I am also looking for term insurance and I am fortunate that I got your link which has indeed clear my all doubts pertaining to Term Insurance, could you please share link/website from where we can get the latest update of claim settlement ratio. could you please provide your reiew on TATA AIA, I mean is it worth to take TI from them.

    • Suresh says:

      Hi Manish, Unfortunately there is no consolidated list available. You should visit each and every insurance website to get the settlement ratio. I would analyse and provide a consolidatd list by next week. Also would review TATA term insurance. But can you pls give the exact name of TATA Term insurance so that I can provide my analysis in next 7 to 10 days?

  11. DR JAIN says:

    Hi, my son, who will be 26 in November, non-smoker, has 3 policies:

    1. Max Life Insurance whole life -ULIP for 9.3 lakhs, annual premium 15000, taken in Aug 2005

    2. Birla sunlife saral jeeval policy for 6.6 lakhs, annual premium 60000, taken in Sept 2009

    3. Aviva life shield advantage plan A for 42 lakhs, annual premium 14705, taken in Feb 2011

    I feel this cover is too less and premia are too high. Please advise what to do.


    • Suresh says:

      Hello Dr.Jain. Looks last one is the only term insurance plan and first two are ULIP’s. As indicated earlier in several articles, ULIP’s charge high charges in initial years. You should check fund performance for atleast 3 to 5 years before taking final call whether you want to close or not. Now coming to your other requirement whether insurance cover is less, you can consider taking term insurance plan from LIC or HDFC click 2 protect or Birla SL Term insurance plan etc.

    • DR JAIN says:

      Thanks for the prompt reply. I may come back to you for advice after checking the fund performances as the policies are already more than 4 years old.

  12. Chittaranjan says:

    Hi Suresh,

    Can you pls tel me what is a SIP and how to invest in it?




    • Suresh says:

      Chittaranjan, SIP is Systematic investment plan where you invest in mutual funds every month (fixed amount). It is similar to RD. However instead of investing in bank, you invest in mutual funds

  13. supriya says:

    Hello Suresh,

    I compared a few term insurance plans online and found out that for my age aegon religare is offering the lowest premium but as you said the claim settlement ratio is as low as 66.06%. also HDFC life is giving an online plan with 96.17% conversion ratio. Do you think I can opt for it, as the premium is just 1000 rs more than aegon. I wanted to go for LIC, but the premiums are high. 


    I had one more question that what is solvency ratio? and how should it effect our decision of buying a policy?



    • Suresh says:

      Supriya, LIC, HDFC, Birla….. this is how the settlement ratio appears. You may prefer such insurance companies based on that. Let me do some more research on solvency ratio before I write to you.

  14. sachin mudgil says:

    Sir I’m 23 years old and just joined a company and having salary 3 lakhs per annum. Please suggest me best lic plan for 15 to 20 years.

    • Suresh says:

      Sachin, My suggestion is take LIC Term insurance plan where you would get good risk coverage, but low premium. You can try LIC Anmol Jeevan/Amulya Jeevan.

  15. sadiq says:

    I am 30 yrs old NRI working in gulf. Iam looking for pure term policy online with & without medical. As i cant visit as of now I am looking for a policy which can be enrolled in.Please do reply soon.

    • Suresh says:

      Sadiq, There are several companies which are offering online life insurance like Aviva, Aegon Religate, HDFC etc. Please login to their website and fill the info and their agent would call and provide you better clarify about documentation part.

  16. Hariom says:

    Hello Suresh,

      I'm a 25 year old working Software engineer planning to go abroad for higher studies by next year. By my estimate I would need a student loan of 20-25 lakhs. I plan to take term insurance with the above liability in mind with a cover of 1.3 crores for a period of 30 years. As per your suggestion above I would like to take 2 term insurance plans to be on the safer side when it comes to settlement. Could you tell me how should I go about choosing the plans? Should I take 2 term policies each with cover of 65 lakhs? If so then which 2 term policies would you suggest? I heard another advantage of taking 2 policies is that it will be good to discard one policy after 5-6 years when the liability reduces. Is it the right way to go about while buying such policies. Please provide your expert guidance on this. 


    • Suresh says:

      Hi Hari, Your thoughts are correct. To minimise the risk, you should opt for 1+ term insurance policies. There are several good term insurance policies, however I prefer in this order. LIC Amulya Jeevan, HDFC Click2 protect, ICICI Pru term insurance plan, Birla Sun life term insurance plan etc. The reason I recommend in this order is “Settlement ratio”. The companies I speciifed settlement ratio is high comparing to others. 

  17. krushna says:

    Hi Suresh,

    I am planning to take term assurance policy HDFC click2protect. This policy does not have rider benifit. My question is if policy holder death by accident or terrorist attack or un-natural. Is the nominee will get sumassured money. Is the policy is taking care suicide death also(just asking for more knoledge).  means any type of death is policy will take care ?

    • Suresh says:

      None of the policies generally provide suicide death. Yes, accidential death or other ones which you have provided should also come as seperate riders. None of the insurance policy will contain all the expected features. They would have their own features and limitations.

    • samay meena(DEVELOPMENT OFFICER ) says:

      hi KRUSHNA

      i'm development officer in LIC of india and would like to tell LIC give your money in Un- natural death .. remember Mumbai Terrorist Attact LIc give claim to every one

      and latest in uttrakhand Lic even settel there claim withion 1 month

  18. Abhinav Tyagi says:

    Dear Suresh,

    I am a 29yr old smoker & take drinks also very ocassionally. I was looking after a term plan & after days of surfing & discussing with my colleagues I chose Aviva I-life. Initially they told me a premium of Rs. 7601 for 55 lacs SA. But i insisted on medicals. After the medicals were through they raised my premiuim to 11500 p.a. on account of over-weight. Just wanted to confirm that now if i pay the extra premium after getting my medicals done, wheteher the chances of claim rejection are less? Whats the guarantee that even after declaring 100% correct info & getting medicals done assures my family of no hassles in claim settlement.  Should i choose Aviva's term plan? 

    • Suresh says:

      Abhinav, If you have declared all the details correct and insurance company has accepted it, there would be less or zero chances for your claim reject in future pertaining to what you have already submitted. The only issue is, the private insurance companies have been there for the past few years and they are yet to be tested in terms of “Settlement ratio”. LIC has 98% settlement ratio among the lakhs of claims every month. Aviva has lower settlement ratio comparing to LIC, HDFC, Birla Sunlife etc.

  19. Manik Darole says:

    Hi Suresh, indeed an informative post, thanks for giving us the clarity on this.

    Suresh, i am a 42 year old male, smoker. I intendt to take a Term plan for 5Crs, preferably the one with monthly premium options. Kindly suggest which two plans i should take? (based on your input to take 2 different term plans)

    thanks for your revert,


  20. ROHIT SONI says:

    Hello Suresh,

    Thanks for the wonderful article. Now I am 37+ years old working professional. I need to buy a term plan to insure my family. I have enquired HDFC and they are quoting Rs. 9,494/- for 50 Lacs for 25 years for Click2Protect plan without any riders while Aegon Religare is quoting Rs. 10,567/- for 50 Lacs for iTerm plan with two riders AD and CI. Now I am not able to decide for which plan should I go? Kindly help to making my decision.


    Rohit Soni

    • Suresh says:

      Rohit, though the features look good for both of them. You can ignore the premium difference as it is small variance. But see the settlement ratio. How many insurance settlements % is done by both of them. LIC, Birla sunlife, ICICI Prulife, HDFC life ranks higher in the order. Hence if you ask me honest opinion, I would go for HDFC among the two indicated by you. 

  21. BIKASH KHETAN says:

    Dear Suresh,

    I am a 33 years old  NRI residing in Dubai. I am interested in an online term plan in a reliable company with the maximum age coverage, more than 35 years or atleast 35 years and which also gives critical illness cover along with it.

    Kindly suggest a good company which gives coverage for an NRI as most of the companies as enquired do not cover NRI.


    • Suresh says:

      Hi Bikash, There are some insurance companies which are offering online term insurance plans like,,, You can review and consider one of them.

  22. Him says:

    Dear Suresh,

    Have gone thru your detailed post and would like to know which is the term insurance i should opt for:

    I am 40 yrs old and don't smoke and drink. Please advise top two policies suited for my requirement and what is premium for 30 L policies. I know that premium chnages with Policy amount, but is theere any discount on high amount policy.

    would appreciate your understanding and reply.

    Regards, Himanshu


    • Suresh says:

      Himanshu, I just replied to few of such queeries. You can check HDFC Click 2 protect or ICICI Pru term plan or LIC Amulya Jeevan. Yes, if you take higher insurance amount, the premium would reduce. 

  23. dharmendra says:

    for 31 years old,which is the best term plan

    • Suresh says:

      Dharmendra, There is no hard and fast rule for term plan. It would depend on an individual requirement, age, risk coverage, premium amount etc. There are several good plans like HDFC click2 protect, LIC Amulya Jeevan, ICICI Pru term plan etc. 

  24. Prakash says:


    Recently I am thinking to go for term insurance plan, But I am very very limited knowledge about investment.  I just contacted HDFC click 2 protect plan,  My age is 39 yrs old.  I want to take ur suggestion which one is better ?

  25. Muthukumar says:

    Hi suresh

      Nice article. Let me share my experience with Aviva ilife online term policy.Everything was nice until i got a mail stating that my premium was hiked 50% as they diagnosed me having diabetes according to my medical synopsis. I got a copy and found that my sugar values were quite normal! I asked Aviva for specific answer to my query that how they decided i have diabetes. They  replied now that iam  prediabetic!  as i had impaired fasting blood glucose.My medical synopsis sent by Aviva reads my fasting blood glucose as 80mg/dl which is very much normal.Again qoting the values i asked what value is considered normal by Aviva.They replied again by cut and paste the same words they sent earlier without stating specific values. I am clear that my health is very much normal and i dont want to be fooled .What should i do now suresh? 

    • Suresh says:

      Muthu, Sad to hear this. Every insurance company has its own style of working. As per IRDA rules, they clearly state that insurance is subject matter of solicitation. Hence, you cannot question about their their rules. My suggestion is forget about that company and try other options like HDFC click2 protect or LIC Amulya Jeevan or ICICI Pru term insurance plan.

  26. Alok says:

    Hello Suresh,

    Thank you for sharing these valuable information.

    I am 32yrs old person and I am looking for a term plan to cover 1 crore for my family. I heard about SBI life for which annual premium would be around 18000 for 30 years but I could not find any information for LIC term plan and its premium which covers 1 crore.

    Could you please advice if there is any such LIC plan and its premium details.

    • Suresh says:

      Alok, LIC Amulya Jeevan is the term insurance plan. However LIC premiums are very high due to high settlment ratio. You can also check HDFC Click 2 protect plan. 

      • Binod sakunia says:



        Glade to know your knowledge in insurance sector. I also want to take Term insurance policies for my family.Kotak Mahendra Bank is at my premises.Hence Hope to get cooperations in future. Please let me know out of your experience about term insurance from Kotak Mahendra 

        Binod Sakunia

        • Suresh KP says:

          It has low claim settlement ratio. Go for HDFC or ICICI term insurance. Pls see this article.

  27. Devendra says:

    Rellay valuable content; thanks for sharing it.

  28. Bharat says:

    Dear Suresh,
    For 33 year old person, 30 year term insurance plan for 50 Lakhs cover below are the yearly premium rates..

    LIC: 20K approximately
    SBI-Life: 12K approximately
    Tata AIA: 10K approximately

    Why LIC premium is almost twice of the private insurance companies?

    I have asked for T&C from these companies, yet to go through those. Since it is not a survival benefit, is it better to consider LIC as a first choice, so that family members will not have much of hassle in claiming process and funds will also be safe for longer period?

    I will appreciate your valuable comments.
    Thank you.

    • Suresh says:

      Hi Bharat, Last week, I wanted to buy HDFC life insurance policy and when I compared the premiums with LIC, the premium of HDFC is almost 50% less. But still I thought for a moment which to chose the best one. I am not thinking about the premum.  The major factor is the claim settlement ratio. LIC claim settlement ratio is 98%. This is one of the major factor an insurer is looking for. If you are not there, your family needs the insurance amount. For a private insurance company whose claim settlement ratio is less, in future, our family could be one of them whom the settlement would not be done. Hence this is the major factor an individual thinks before taking policy. While other parameters also can be considered, but people trust LIC. 

  29. Jagadesh says:

    Dear Suresh,

    Thanks for all your posts and investment ideas. I am a beginner and you posts are really helpfull. Really appreciate your knowledge in this area and promt respose for all questions.

    I am 28 years old and i have taken 2 life insurence policies without having much knowledge. Please find below the policies detail,

    Birls Sun Life SaralWealth GA Base -Term 20 Pay 20

    Gross Annual Premium :41,760.0
    Mode of payment : monthly
    Policy start date : Aug,2010
    Sum assured : 240000
    Fund value : 85000

    Reliance Life Insurance Classic Plan-RG

    Gross Annual Premium :30,000
    Mode of payment : Yearly
    Policy start date : Jan,2011
    Sum assured : 300000
    Fund value : 960000

    Could you please let me know if  it is good to continue with these policies. BSLI appears not to be performing well compared to Reliance. I reall dont have much idea.Kindly suggest me how to proceed with. Please let me know if there is any option to switch the plans if this is not good to continue. Thanks in advance.    

    • Suresh says:

      Jagadesh, These are ULIP policies. ULIP polices charge heavy admin charges in the initial years. 1) Birla Saral wealth which provides 6 times risk cover of annual premium paid. The important part is in case of unfortunate death of insured, nominee would receive sum assured + fund value which is an enhancer. They would charge premium allocation charge of 17% to 30% from your investment amount for 1-3 years. Means, if you paid Rs 123K for 3 years, depending on the term you have taken they would have deducted upto 30%. This is the reason for low fund value. However from 4th year, these charges are zero. Means you should not surrender the policy now, else you would be the looser.   4) Reliance life insurance classic plan is also market linked plan, however the admin charges are very less around 2% to 3% depending on term and age of insured. So, your investmetn amount has moved from Rs 90K to Rs 96K.  What would have happened if you would have taken term policy for Rs 5.50 lakhs (Rs 3L + 2.5L), you would have paid less than Rs 5,000 per annum. You would have invested balance annual premium which you are paying (Rs 70K minus Rs 6K) for Rs 65,000 in a mutual fund or would have done a simple bank FD. Going forward, avoid taking any ULIP or money back or endowment policies. You can consider taking term insurance and invest balance in other better investmetn optoins.

  30. Vel says:

    Dear Suresh

    In case of online term plan, how would it affect if the applicant has Diabetes for more than 10 years?

    Can you please let me know? Would they reject? Would they offer the Term Policy?


    • Suresh says:

      Vel, It depends upon the insurance policy. Some insurance policies upfront say that all pre-existing diseases cover after say 1 year or 2 years. Choose those plans.

  31. p.vignesh says:

    An agent from the SBI life insurance had approached my family and asked us to insure 40000 per year for 5 at the end, an amount of 3,15000 is assured…Can i believe this or could i opt for other insurance companies?

  32. T P Dutta says:

    I have heard that LIC is going to launch their online term plan few years back…..have they able to launch the same as yet??? Pls. inform me as I am waiting for their online plan for long….

  33. Shweta says:

    What Suresh says is correct. Terms and conditions need to be read perfectly and every risk must be evaluated. Above all, you must be honest in  providing every detail without any threat of insurance companies revealing data to others. Your data will be guarded. Arun Sachdev seems to be Aviva loyal. Here is Aviva I-Shield link for more information.

  34. Arun Sachdev says:


    Thanks for the detailed article. It has some really important keypoints to remember. Also, you are right in saying that not all term plans with low premium are good. Well my family has always been an Aviva believer and all of us have insured ourselves with Aviva. Heard Aviva has launched a term plan online 'i-Shield'. Planning to go for it since this online term plan gives back 110% of the premium if we survive the policy term. Sounds good to me.
    What should be the criteria while choosing an online term plan. Please share your opinion. Might help me take up the policy, Thanks.

    • Suresh says:

      Arun, there are no specific rules about online term plan. You need to be honest in providing all the relevant details when you are filling up the form, else during the claim, it would get rejected stating some terms are not adhered to. My suggestion 1) Read the terms and conditions carefully 2) Fill the complete details with honest. If you smoke, write you smoke, do not hide anything.

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