15 years ago, as a Branch Head in an Insurance Company, when I discovered that term insurance made sense and wanted to share my discovery with my colleagues and relatives, they saw me as an impractical fool. अरे इसमें तो मरने में फायदा है , इसमें commission बहुत कम है , all of them chorused!. No returns, my learned Uncle dismissed me off.
That’s why I am getting impressed with the young professionals these days. Here’s a proof of that. A email from Praveen, my kid brother!:
Lately, I have explored Life Insurance policies and realized the pure term plans are the best way forward, with the highest Insurance amount at the lowest annual premium. Now that most private insurance companies offer to sell Insurance schemes online at very good prices, I am planning on taking up one of them in April.
Religare has the easiest online purchase mechanism and the best price as well. For Rs 4500 or so I could get a term plan for 25 years for 50 Lacs [How much is enuf?!].
However, I do know that no one can match LIC for guaranteed claims. Private players are quite behind in successful claims. But LIC charges 2-3 times the annual premium of private players for the term plan. So in this confusion, could you write an article on Term plans and recommend the best plans available? LIC also offers the longest insurance period at 30 years, compared to 25 of private players.
Now while the email clearly outlines a decision to go for online term insurance it also talks about the perception (erroneous?) that ” no one can match LIC for guaranteed claims. Private players are quite behind in successful claims ”
So while I applaud the buying decision, I do not agree 100% on the perception on the claims. The claim process takes a well oiled machinery which LIC has been running for 60+ yrs now. Moreover, insurance is a two way contract where if you are not hiding anything, the other party can’t refuse claims just like that. Some of the claims, I’m afraid are bad claims.
And you get a huge cost advantage for going online.
Some thoughts that I posted on the blog previously on this issue: Problems and Cheap term insurance
So would you recommend that Praveen goes ahead with the Religare online term insurance? Or do you have another factor to weigh in?
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