Is the cheapest term insurance the best

Is the cheapest term insurance the best

Many life insurance companies have hopped onto the online term insurance bandwagon. Since this is the simplest form of insurance on offer and a direct comparison of premium is possible. Couple of insurers have even entered a slug-fest on who offers the cheapest term insurance policy.

These insurance covers that offer a pre-set death benefit are cheaper than the regular term insurance plans purchased through insurance agents and brokers. The benefit of online term plans is that one does away with the insurance middlemen and thus saves up on the commission paid to the agent out of your premium paid. Online term plans help you save 1/3 to ½ the premium paid for offline plans.

But then is premium the only consideration to opt for a term insurance plan, where the heir of the insured would get the sum assured upon the death of the policyholder. It has been observed that the chances of claims being rejected are higher when the cost of life insurance isn't commensurate with the actual risk involved. Policyholder declaration of health and existing conditions too are responsible for claim rejection.

Few other essential factors need to be considered. Here are five parameters that you should assess apart from premium to zero down on an online term insurance plan.

Maturity age offered:

Insurance companies offer a maximum maturity age between 65-80 years of age. Higher the maturity age the better for you as higher the age more the chances of death and better the utilization of a term plan. LIC and SBI Life, which are public sector insurance companies, offer a 70 year maturity age, while HDFC Life offers a 65 year maturity age.

Higher policy term:

Term insurance policy term used to be 25 years earlier. The scene is now changing. Insurers offer a term of 35-52 years as well. The higher the term, the better for you as you need not purchase a second term cover at higher age if you exhaust the term of the first one purchased early in life. HDFC Life, Bajaj Allianz, SBI Life have a term of 30 years. LIC, Reliance Life, Aviva Life and PNB Life provide a term of 35 years, while Tata AIA Life and India First offer a 40-year term.

Actual premium:

The premium quoted online or through charts is just an indicative premium and your actual cost may escalate once your medical tests reveal your health condition. A smoker would have to cough up 25-30% more. So, find your actual premium before selecting options.

Claims rejection ratio:

This is an important factor to be examined before taking the online term plan. An insurer may be offering the cheapest term plan, but if it rejects 40% of the claims then your money paid over the years may be down the drain.

Companies with strong financial background and reliable in terms of claim settlement should be looked at. As per IRDA, public sector life insurer has a claims ratio of 98.14%, while HDFC Life ranks third in terms of claims settlement by paying 94.01% of the claims received.

Keep an eye on the claims rejection ratio too which is indicative of the number of claims that have been declined by an insurer.

Ease of claim handling:

Your heir should not be left running from pillar to post to make the insurance claim. Also, several insurers have a long list of pending claims. So, study the past record of the insurer before taking up the term plan. For instance, DLF Pramerica has a shocking 53.96% of its claims pending, while HDFC Life has only a mere 1.29% claims pending.

Caution:

To avoid claim rejection later follow these ground rules:

1. Provide correct details in the health declaration as hiding past history of diseases and essential health related information could lead to claim rejection.
2. Stop agent from filling wrong details or better still fill the form yourself.
3. Don't opt for the single premium plan even though a discount is offered as thanks to the uncertainties of life you may or may not need to pay premium for the whole term. The premium doesn't increase each year.
4. Inform the nominee you have appointed about the term policy you have purchased.
5. Don't fall for misselling offers of insurance agents that you will get back the entire amount you have invested, so the cost is zero. The money will be back upon death and the inflation cost as well as opportunity cost of money should be looked at from 15-20 years perspective.

How to claim PMJJBY & PMSBY

How to claim PMJJBY & PMSBY – Download Claim Forms Online?

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) are 2 super hit insurance schemes launched by Govt of India recently. Both the schemes are getting massive promotion to bring more people under insurance coverage, similar to Sukanya Samriddhi Scheme launched prior to that.

PMJJBY is a life insurance policy of 2 lakh for an annual premium of Rs 30 only and PMSBY is an accident insurance scheme of Rs 2 lakh for an annual premium of Rs 12 only. You might have read the benefits or key features of these 2 schemes so far, but did you check out how to claim these insurance policies when death or accident happened?

In this article I will share the claim settlement process, how to download the claim forms and related information about Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).

If you follow newspaper daily, then you might have noticed the attached printed forms in any newspaper. You can simply cut those forms and keep with you to use in future whenever insurance claim required. I am following TOI regularly and sharing the same from that paper.

You can also download the claim forms from individual bank’s website or collect the claim forms from the bank branch itself, in which you have opened PMSBY and PMJJBY. Bank people will help you to handle the claim form also.

In other way, one can also download the claim settlement forms of PMSBY and PMJJBY from jansuraksha.gov.in. Click on individual schemes and you will find 2 forms listed. One is application form and other one is claim form.

The forms are available in various languages, like Bengali, English, Hindi, Malayalam, Kannada, Tamil, Telegu. You can download the claim form in your preferred language.

How to claim PMSBY and PMJJBY?

The first thing one have to ensure that, both the schemes are offering 2 different types of claims. So in case you are facing some accidental disability then you should approach PMSBY and in case any unfortunate death, one have to approach with PMJJBY. Check out the few basic steps to follow while claiming any of these 2 insurance scheme.

• For Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), you have to provide the death certificate with the claim form. If the death is not natural, then you might have to submit the postmortem report.
• For Pradhan Mantri Suraksha Bima Yojana (PMSBY), you have to provide couple of documents to prove the accident & disability. Original copy of FIR of the accident. Means you should file a police case immediately in case such accident happen. In case of permanent disability, submit disability certificate from civil surgeon.
• You have to submit the discharge voucher from hospital with the prescribed format.
• Submit the claim as early as possible to your bank where you have opened these schemes. Bank will file your claim within 30 days of claim receipt.
• As per process, banks will process your insurance claim in 30 days and disburse the amount to your nominee. But in real-time this time may vary depending on the complexity of the claim.

This may not be such simple to claim any of these insurance schemes, as the number of people approaching in coming years will increase like anything. And then Govt may have to be ready with more efficient process, if any problem with the current process.

In case you have any query related to Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) claim settlement process, you can call national toll free number – 180011001 / 18001801111 or state toll free no. 18004258933.

If you have not enrolled for PMJJBY and PMSBY, then you can do that before 31st August 2015, as no Certificate of Good Health is required.

HDFC Life Health Assure Plan

HDFC Life Health Assure Plan

Features:

• Health Plan with unique benefit of 3 years premium guarantee i.e no change despite claims in any given year.
• Life long renew-ability without fresh medical declaration at each renewal if no policy alternation.
• Multiplier benefit where cover increases by 50% in year if there is no claim. Doubles the cover in 2 years!
• Provides option to restore 100% of your Sum Insured in case the benefit is exhausted in a policy year.
• Offers more flexibility while selecting room, as there is no sub-limit on room rent.

Benefits:

• Covers parents and parents-in-law in family floater.
• Cashless Claim Service at specified network hospitals across India.
• Comprehensive Mediclaim plan including Hospital Cash*, Wellness* and Maternity Benefit - all in one plan!
• Wellness Benefit for Gold Plan option - get Health Check up vouchers in 2nd policy year of every 3 year term.
• Simplified underwriting with short medical questionnaire.

Features and Benefits of HDFC Life Health Assure Plan:

Choice of plan option 

• You can select either Silver Plan Option or Gold Plan Option. Your sum insured will be as per the plan option.

Choice of plan type 

• You can choose either Individual or Family Floater.

Family Floater 

• You may cover your spouse, children, both parents and parents-in-law.
• Premium Guarantee for 3 years even if you make a claim.

Guaranteed Lifetime Renewability 

• If you pay the premiums in time and the policy continues without any break in cover, then the plan offers guaranteed renew-ability for lifetime. See the product brochure for details.

Benefits include the following as per the plan option selected

• In-patient hospitalization benefit
• Day care benefit
• Pre and post hospitalization benefit
• Emergency ambulance benefit
• Donor expense benefit
• Maternity benefit
• Hospital cash benefit

Optional Benefit:

• Restore Benefit
• Room Rent Enhancement

The plan provide you an option to choose from our 2 more optional benefit:

Restore Benefit:

Restores the original sum Insured if the due to claims made benefits (sum Insured & multiplier benefit if any) are exhausted in a policy year. This is an optional benefit and can be opted at inception by paying extra premiums. See the product brochure for details.

Room Rent Enhancement:

Option to eliminate the sub-limits of 1% on room rent as long as standard private room is selected and provides you with more flexibility to choose room. This is an optional benefit and can be opted at inception by paying extra premiums. See the product brochure for details.

• Cashless Claim Service at specified network hospitals across India
• Hassle free Claim Reimbursement Process

Wellness benefit for Gold Plan Option - get health check up vouchers

Multiplier Benefit:

• Annual limit increases by 50% of sum insured after one claim free year and 100% after 2 consecutive claim free years
• No extra premium for increased cover due to multiplier benefit

Premium Guarantee:

• Premium guaranteed for 3 years policy term, during which no change in premium due to increase in age of live insured and even in case of claims
• Premium reviewed at the end of policy term and new premium based on the attained age of lives insured and the then prevailing premium rate table

Renewability for Lifetime:

• Assurance that the cover will not stop in old age
• No need of fresh medical underwriting at each renewal if policy is continued without break

Coverage for all your loved ones:

• Cover your spouse, children, both parents and parents-in-law with family floater plan type

Comprehensive Coverage:

• Inpatient hospitalization benefit
• Day care benefit
• Pre and post hospitalization benefit
• Donor expense benefit
• Emergency ambulance benefit
• Hospital cash benefit (Gold Plan Only)
• Wellness benefit (Gold Plan Only)
• Maternity benefit (Family Floater Gold Plan Only)

Notes: There is no benefit on maturity. This product does not offer any benefit on death. Subject to continuity of policy with no break in cover, at the then prevailing premium rates and the then prevailing product terms and conditions.

Also see HDFC Life Click2Protect Plus Plan

Eligibility:

Plan Type-Individual
Plan Option-Silver sum Insured	3 lacs
Gold sum Insured	5 lacs
Plan Type-Family Floater
Plan Option-Silver sum Insured	3-5 lacs
Gold sum Insured	7-10 lacs

You have Flexibility to customize a plan as per your and your family's needs

Plan Details:

Age and policy term limits for HDFC Life Health Assure Plan Are as Follows:

Minimum entry age for Adults and Policy holder	18 years
Minimum entry age for Dependent Children	91 days
Maximum entry age for both	70 years
Policy Term	Whole Life
Premium frequency	Annual

Age has to be taken as of "last birthday" basis

Commission for Life Insurance:

As per RBI circular: RBI/2009-10/225 dated November 16, 2009, following are the details of the comparative commission earned by HDFC Bank from Insurance (Life), whose products are being distributed:

Commission, Brokerage and trail from Life Insurance:

Category	First Year Commission		2nd year Renewal commission
	Min	Max	Min	Max
Health	2%	25%	0%	7.50%
Pension	2%	7.50%	0%	2%
Protection	2%	35%	0%	0%
Savings & Investment	0%	35%	0%	3%
Group Product*	2%	2%	0%	0%

Note: The commission varies depending upon the Product in each category, tenure, amount of premium and premium paying term.

For Group Products commission payable is 2% of the premium with a ceiling on the maximum payout as defined by Insurance Regulatory and Development Authority of India (IRDAI) from time to time.

Source : insurancboom.com

HDFC Life Click2Protect Plus Plan

HDFC Life Click2Protect Plus Plan

Features:

• Provides comprehensive protection to you and your family with the choice of plan options.
• Choose from – Life Option, Extra Life Option, Income Option and Income Plus Option.
• Provides policy term of 10 to 40 years as per the cover required with option of regular, limited and single Premium Paying Term option.
• Discounted premium rates for non-tobacco users.

Benefits:

• With Life Stage Protection feature, you can increase your insurance cover on certain key milestones of your life without fresh medical test
• The plan provides option to secure your family’s future by way of lump sum benefit and monthly income under various plan options
• Enjoy tax benefits under sections 80C and 10(10D) of Income Tax Act, 1961.

Features and Benefits of HDFC Life Click2Protect Plus Plan:

Death benefit under the plan is:

a. Single Premium Policy: Higher of:

• 125% of single premium
• Sum assured

b.Regular Premium Policy : Higher of:

• 10 times the annualized premium
• 105% of all the premiums paid as on date of death
• Sum assured

Life Option:

• The death benefit specified above is paid as lump sum on death

Extra Life Option:

• In addition to the death benefit mentioned above, an additional benefit equal to sum assured is payable in case of death due to accident

Income Option:

• 10% of the Death Benefit paid as a lump sum upon death
• remaining 90% of the Death Benefit shall be paid as monthly income over next 15 years (0.5% of Death Benefit every month for 15 years

Income Plus Option:

• 100% of the death benefit specified above shall be paid as a lump sum upon death
• In addition, a monthly income equal to 0.5% of the sum assured shall be payable for a period of 10 years
• The monthly income can be level or increasing at 10% p.a. as chosen by the policyholder

Life Stage Protection Feature:

This is only available with Life Option. Under this option, you can increase your cover at key milestones like marriage, first child birth and second child birth without a fresh medical test. Please refer to the product brochure for details, term and conditions of this feature.

Also see Cancellation or Change in name of nominee in life insurance policies

Eligibility:

Minimum – Maximum entry age	18 – 65 years
Minimum – Maximum maturity age	28 – 75 years
Minimum – Maximum policy term	10 – 40 years
Premium Paying Term	Regular, limited or single
Premium Paying Frequencies	Annual, Half- yearly, quarterly or monthly
Minimum – Maximum Sum Assured	Rs. 25 lakh – No limit subject to satisfactory underwriting

For more details on risk factors, terms and conditions, please read the Product Brochure carefully and/or consult your Relationship Manager before taking a decision.Age has to be taken as of "last birthday" basis.

Commission for Life Insurance:

As per RBI circular: RBI/2009-10/225 dated November 16, 2009, following are the details of the comparative commission earned by HDFC Bank from Insurance (Life), whose products are being distributed:

Commission, Brokerage and trail from Life Insurance

Category	First Year Commission		2nd year Renewal commission
	Min	Max	Min	Max
Health	2%	25%	0%	7.50%
Pension	2%	7.50%	0%	2%
Protection	2%	35%	0%	0%
Savings & Investment	0%	35%	0%	3%
Group Product*	2%	2%	0%	0%

 Note: The commission varies depending upon the Product in each category, tenure, amount of premium and premium paying term

*For Group Products commission payable is 2% of the premium with a ceiling on the maximum payout as defined by Insurance Regulatory and Development Authority of India (IRDAI) from time to time.