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Reasons Why The Cheapest Term Insurance May Not Be The Best

When it comes to Term Insurance, all of us try to save money by opting for a cheap insurance. After all, term insurance doesn’t offer any maturity benefits, so why get a costly plan? However, cheaper rates should not be the sole criteria for deciding which term policy to buy. Have you wondered what your ‘cheap’ term insurance will do when you pass away? What if your insurer rejects the claim or imposes any other restriction?

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Note: Know more about what is term insurance first before reading this article.

There are four more factors to be considered than JUST premium to ensure term insurance works well when its need would actually arise:

1. Higher Policy Tenure - Insurers are now term policy, with tenure of 35-50 years. With an increase in the life expectancy ratio, it is better to opt for a higher term and save yourself from the hassles of buying a new plan in case the first term insurance expires.

2. Maturity Age - Most of the term insurance plans have a maximum maturity age between 65 and 80 years. As your age increases, you become more susceptible to ailments and therefore, higher the maturity age, the better it is. For instance, ICICI Prudential and HDFC term insurance plan have a maturity age of 65 years and 75 years, respectively.

3. Claim Rejection- This is one of the most important factors to be considered. An insurer might be offering the cheapest term plan but what if its claim rejection ratio is over 50%? In that case, the money paid over the years may go down the drain.

Life Insurer Details

Table: Death claim ratio of insurance companies:
4. Low Claim Pending Ratio- High claim pending ratio points towards a company’s inefficiency in settling claims. While considering claim spending ratio, check the age of pending claims. As per IRDAI guidelines, all claims should be settled within six months.

Table 2: Number of pending claims with respect to leading insurers for the year 2013-14:

Source:- irda.gov.in

Term insurance is meant to financially secure your family after your death. To ensure that they are not left in the lurch, choose the right term insurance policy that not only costs less but also guarantees fast claim settlement at the time of need.

You may also like to read : 6 Important Term Insurance Riders And term insurance benefits

Note: You can easily calculate the term plan premium by using the term insurance premium calculator online tool.

Note: Check all the best term insurance plan in India.


Premium By Age

˜Top 5 plans based on annualized premium for bookings made on https://www.policybazaar.com  in the first 6 months of FY 24-25.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

+Rs. 487/month (Rs.16/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.

Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited

We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881

For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale

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+Rs. 820/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.

+Rs. 1,443/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.

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