Have you secured your family’s financial future yet? If you haven’t, getting a sufficient Life Insurance cover could be a great way of going about it.
Alternatively, you could also consider getting an adequate Health Insurance cover or even invest in Mutual Funds for important milestones such as your child’s education, marriage, and your retirement expenses.
Additional Reading: Tax-Saving Investments to Grow Your Wealth
Although the above-mentioned investments are important for every individual, a Life Insurance cover is a must, especially if you are the sole breadwinner of the family.
But, why is it so important? Well, with Life Insurance, you are protecting the financial future of your loved ones in case anything unexpected happens to you. So, if you haven’t invested in a Life Insurance policy yet, there’s no better time than the present to do so.
Now that you know the importance of Life Insurance, you need to decide whether to opt for Term Life Insurance or Whole Life Insurance.
Do you know the difference between the two? Well, a Term Insurance policy, although lower in cost than a Whole Life Insurance policy, comes with an end date.
A Term Policy is taken for a period of time. If you happen to pass away during the maturity period of the policy, your beneficiary will receive death benefits. However, a Whole Life policy covers you for your entire life.
You’re probably wondering why anyone would opt for a Term Insurance plan if a Whole Life Insurance plan offers much more value.
We’ll tell you why!
Affordable Coverage
Compared to Whole Life policies, Term Life policies are cheaper. The premiums you pay will be much lower than that of a Whole Life policy since there is no cash value attached to it. Also, people with tight budgets usually don’t want to spend much on an insurance policy. In that sense, a Term Life cover is a great fit.
Income Replacement
A Term Life Insurance plan acts as a substitute for your income for a certain period of time. For example, if you are certain that you’ll be spending a part of your income towards raising your kids or making loan repayments, you can buy a Term Insurance plan for that particular period of time. The policy’s payout will be a replacement for your income in case anything unfortunate happened to you.
Simple & Flexible
Unlike cash value plans, Term Insurance plans are simple and easy to understand. All you have to do is pay the premium and get coverage for the chosen time period.
In addition to this, you can opt out of a Term Life policy whenever you want. Also, they can be renewed at the end of the policy term, or you can choose to convert it into an endowment policy during the policy term itself.
Tax Benefits
You can avail tax benefits under Section 80C on the premiums you pay on your Term Life policy.
Both Term Life and Whole Life policies are great options. However, if you’re young and have just started a family, you probably have budget constraints. Therefore, it is advisable that you opt for a Term Life policy for the time being.
There are a lot of Term Life plans offered by different insurers that are currently available in the market. Always compare between different options and pick the one that best suits your requirements.
Additional Reading: The Definitive Guide To Buying Term Life Insurance
To make things a little easier for you, we’ve identified 5 popular Online Term Life Insurance plans for the year. For this, we took into consideration IRDA’s 2016 list of insurers in the country based on their claim settlement ratio and picked the top five insurers. Then, we identified the best plans offered by these insurers based on their features and premiums.
The top insurers based on IRDA’s 2016 report are:
| Insurer | Claim Settlement Ratio |
| LIC | 98.33% |
| Max Life | 96.95% |
| Tata AIA Life | 96.80% |
| ICICI PruLife | 96.20% |
| Aegon Religare | 95.31% |
| HDFC Standard | 95.02% |
| Reliance Life | 93.82% |
| SBI Life | 93.39% |
The three parameters we took into consideration are:
- Claim Settlement Ratio – It refers to the number of policies that have been settled with the insurer paying the claim in case of death of the policyholder. A high claim settlement ratio means that the insurer is credible and reliable.
- Features – It’s good to have additional features attached to a policy. You never know when you’ll want to opt for a rider or any other feature.
- Premium – Although premiums shouldn’t be the only parameter to consider, they are important if you have a tight budget.
Based on IRDA’s report and the parameters mentioned above, here are five popular online Term Life plans, in no particular order, that you should consider if you’re planning to get a cover this year:
ICICI Prudential iProtect Smart
One of the first private sector Life Insurance companies in the country, ICICI Prudential iProtect Smart offers an array of products, each dedicated to the different requirements of individuals at different stages of their lives.
Here’s everything you need to know about the ICICI Prudential iProtect Smart plan:
- Minimum age – 18 years
- Maximum age – 60 years
- Maximum maturity age – 75 years
- Policy term – Minimum policy term is 5 years. Maximum policy term is 40 years
- There are three premium payment modes – monthly, half-yearly or yearly
- Claim settlement ratio – 96.20%
Additional options for this policy include an in-built terminal illness benefit and waiver of premium on disability. The policy also offers an additional payout (almost double the life cover you’ve opted for) in case of an accident.
Aegon Life iTerm
This is a simple Term Insurance policy that comes with in-built terminal illness benefit.
- Minimum age to get the policy – 18 years
- Maximum age to get the policy – 65 years
- Age limit (Maturity) of policy – 75 years. There is an option of getting coverage till 80 years
- Minimum policy term is 5 years
- Premiums can be paid monthly, semi-annually, annually or as a single payment
- Minimum sum assured – Rs. 25 lakhs (at the discretion of the insurer)
- Claim settlement ratio – 95.31%
The biggest advantage is that this policy comes with an inbuilt terminal illness benefit. So, if you get diagnosed with any terminal illness during the policy period, you’ll get 25% of the sum assured as advance payment for treatment.
You can nominate multiple beneficiaries to this policy and allocate varying sums to each individual. Women and non-smokers can avail special discounts on the premium rate for this product.
Max Life Online Term Plan Plus
This plan provides comprehensive protection for your family and comes at an affordable price as well.
- Minimum age requirement to get this policy – 18 years
- Maximum age at entry – 60 years
- Maximum maturity age after which policy can’t be renewed – 75 years
- The policy term for this plan varies from 10 years to 40 years (subject to the maximum maturity age limit)
- Minimum sum assured is Rs. 25 lakhs
- Special discount rate is offered to non-smokers and women
- NRI applicants can avail this Max Life Insurance plan
- Claim settlement ratio – 96.95%
Accidental death benefit rider and waiver of premium rider are available at affordable prices with this plan. This basic cover plan comes in two other advanced variants too – with monthly income and with increasing monthly income.
HDFC Life Click2Protect 3D Plus
This is a pure protection plan that secures your family’s future at an affordable price. Wondering what 3D stands for? It refers to three of the biggest uncertainties we, as humans, face in life – disease, disability, and death.
- Minimum age for entry – 18 years
- Maximum age for entry – 65 years
- Maturity age (maximum) – 75 years (except for lifelong protection and 3D lifelong protection options)
- Policy term – Pick any term from 5 years to 40 years (except for lifelong protection and 3D lifelong protection options)
- Premium payments can be made yearly, half-yearly, quarterly or monthly, or as a single payment
- Minimum basic sum assured is Rs. 10 lakh
- Special premium rates for women and non-tobacco users
Under this online Term Insurance policy, you can choose from six different lumpsum plans – life option, extra life option, 3D life option, lifelong protection option, 3D lifelong protection option and the return of premium option.
PNB Metlife Mera Term Plan
Secure the future of your family in a cost-effective way with the PNB Metlife Mera Term Plan. Here’s what you need to know about this plan:
- Entry age limit – 18 years to 65 years
- Policy maturity age – 75 years
- Minimum sum assured is Rs. 10 lakhs
- Tenure – 10 to 40 years
- Claim settlement ratio – 85.36%
- Option to choose either individual or joint life cover
- Option to include multiple nominees
- Special premium rates for women insurers and non-tobacco users
This PNB Term plan offers four payout options – full lump sum payout, lump sum with regular monthly income, lump sum with increasing monthly income, lump sum with regular income till your kid turns 21 years.
Bonus Read: 5 Questions You Should Ask Yourself Before Buying Life Insurance
Here’s a list of additional benefits available with each of the plans mentioned above*:
| Plan | Accidental Death | Accidental Disability | Critical Illness | Monthly Income | Waiver of Premium |
| ICICI Pru iProtect Smart | Yes | – | Yes | Yes | Yes |
| Aegon Life iTerm | Yes | Yes | Yes | – | Yes |
| Max Life Online Term Plan Plus | Yes | Yes | – | Yes | Yes |
| HDFC Life Click2Protect 3D Plus | Yes | Yes | Yes | Yes | Yes |
| PNB Metlife Mera Term Plan | Yes | Yes | Yes | Yes | – |
*The above-mentioned plans may have different sub-plans under them. The additional benefits on each of the sub-plans will vary.
Wondering how much premium you will be paying for each of the above plans? Here’s a quick look at the amount you’ll be shelling out as premium on a monthly basis for basic cover:
Scenario 1: Male, 30 years, Non-smoker. Policy term – 35 years. Lump Sum – 1 Crore.
| Plan | Premium (Monthly) |
| ICICI Pru iProtect Smart | Rs. 1,017 |
| Aegon Life iTerm | Rs. 694 |
| Max Life Online Term Plan Plus | Rs. 828 |
| HDFC Life Click2Protect 3D Plus | Rs. 946 |
| PNB Metlife Mera Term Plan | Rs. 841 |
The premium rates may vary depending on the factors affecting underwriting of a policy.
Scenario 2: Male, 30 years, Smoker. Policy term – 35 years. Lump Sum – 1 Crore.
| Plan | Premium (Monthly) |
| ICICI Pru iProtect Smart | Rs. 1,383 |
| Aegon Life iTerm | Rs. 976 |
| Max Life Online Term Plan Plus | Rs. 1,073 |
| HDFC Life Click2Protect 3D Plus | Rs. 1,482 |
| PNB Metlife Mera Term Plan | Rs. 1,049 |
The premium rates may vary depending on the factors affecting underwriting of a policy.
There are a number of different Term Insurance plans available. Compare between different plans and choose the one that best suits your financial situation.
And that’s not all. You can even compare and choose from a range of Health Insurance, Car Insurance, Two-Wheeler Insurance and Cancer Insurance plans as well.