Bharti AXA comes up with cheapest Term Insurance plan

February 21, 2012   ·   4 Comments

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In the race to find the customers, Bharti AXA has revised their premium rates for Term insurance plans like HDFC.  Bharti AXA Life iProtect is now the cheapest online term life insurance plan. The premium is cheapest which means that price war is still hot. It is a good deal for non-smokers, but little expensive for smokers. Race to bottom is surely beneficial to customers if the companies can keep their promises if they can settle when the policies will come for claim.

Comparison with other Term Insurance Policies:

http://stockssavvy.comAviva i-Life was the cheapest term life insurance till now with the revamped Aegon Religare iTerm closing the gap. HDFC Life Click2Protect was recently launched to compete in the online term market. The much-awaited online term plan this year will be from LIC. It is expected to hit the market soon.

Bharti AXA Life iProtect is now the cheapest online term life insurance plan for non-smokers. There is wide difference in the premium between smokers and non-smokers. The premium for Rs 50 lakh Sum Assured (SA) for a 27-year old non-smoker male based in Mumbai for a policy term of 25 years is Rs 3,700 (excluding taxes). On the other hand, the premium for a smoker in the same case will be Rs 6,150 (excluding taxes).

Recent entrants DLF Pramerica U-Protect and Edelweiss Tokio Life Protection have premiums which are the lowest in offline term plan space. Their premium is Rs 5,956 and Rs 5,984 respectively for the same above parameters. Both the products are offline as of now.

Online term life plan options for Rs50 lakh sum assured for 27-year old non-smoker male based in Mumbai for policy term of 25 years. Premium inclusive of taxes

Advantages of Bharti AXA iProtect

  • Cheapest term life insurance
  • For SA above Rs50 lakh, premium discount is given
  • This policy offers reduced premium for non-smoking policyholders
  • Family care benefit: This benefit becomes applicable after two year consecutive premiums have been paid. Under this benefit, a part of SA equal to Rs1 lakh is provided to the nominees within 48 hours of submitting all the required claim documents. The 48-hour time limit is subject to some conditions like working day, etc
  • The press release specifies no medical test till Rs50 lakh. The brochure silent on the medical test

 

Disadvantages of Bharti AXA iProtect

  • The maximum age at maturity is 60 years. Many other plans are available till the age of 70 to 75 years.
  • Policy term can be for 10, 15, 20, 25 and 30 years. E.g. A policyholder of 42 years will be offered maximum policy term of 15 years which will end when the person is 57 years. It will not be easy to get another term plan from different insurer at that age.
  • Minimum sum assured is Rs25 lakh

 

The question is whether online sale without any agent makes up for such a gigantic difference in the premium? It cannot justify the enormous variation; even though that’s the standard answer you will read or hear from the insurance company. Is there an assumption of the online buyer living a healthy lifestyle, having access to proper healthcare and hence will live longer? Time will tell if the assumptions stand true. The mortality experience of the product will tell if the premiums collected are enough or insurance company has a hole in its pocket.

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Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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  • Hitesh

    Sir, as all are aware that settlement of claim is more of LIC rather than any other Companies. So can we keep a trust on these private Companies term plan. As whats the guarantee of disbursement. As on last year 15 private insurance companies where in loss, so is it so to buy LIC term plan by paying higher premium rather to go for these cheapest term plan

  • rajsingla

    @Hitesh,

    You raised an excellent point here. Whether to buy term insurance from these companies? whether to trust or not?

    Lot of companies are in heavy losses & companies are trying hard to make people buy their policies. Few of these companies will sail through & few will burst out per sure & with that their policies will too.

    While taking insurance, we are trying to cover the risk.The reliability factor whether the company will exist after 20-30 years needs to be ensured. Just looking the premium should never be factor to buy a policy.

    Some people have come with their unique approach by buying a 50:50 insurance cover from LIC & private companies. Again, there is certain amount of risk attached it too.

    Personally, i have a term insurance from LIC & i advise/recommend my clients to go for the same.

  • Hiteshloonia

    Sir, as per your study, do you think that religare or aviva or bharti , we should keep a trust and go for it. N your opinion is good that you may go for 50:50 criteria. Or, we have heard about the online policy to be launched by LIC , so whether we should wait or not. N taking term plan online , whether it is recommended or not.

  • rajsingla

    @Hitesh

    If you want to go with private players then ICICI is the one which is having the best claim-settlement in private players. Though still it doesn’t come close to LIC.

    LIC online term insurance can take time as LIC still have not clearly stated that when the policy will come in the market.

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