What to consider when buying an online term plan

You should not only consider the premiums, but also tenure of the cover, riders and so on

The internet is a cheaper alternative in case of many things, even when it comes to insurance term plans. In the last few years the prices of term plans have almost halved, hence making it financially viable to switch to an online term plan.

A term plan is a plain vanilla product that only charges the cost of insurance from you. So if you die during the term of the policy, your beneficiaries get the sum assured; if you survive the term, you get nothing back.

The premiums of online term plans are cheaper as companies don't require to spend on distribution and infrastructure. This is passed on to the customer.

Most insurance companies have these online plans. Each offering different rates of premiums. For instance if you are 30 year old male, who is looking for a 30 year term plan and looking for Rs 1 crore sum assured you have various options.

These are the five cheapest online term plans for a 30 year old male, who is a non-smoker and is looking for a 30 year term with Rs 1crore sum assured:

Online term plan	Premiums	Maximum Age at Maturity	Policy term
Aegon Religare Life -  i-term	8,202	75 years	40 years or upto age 75
Bharti Axa Life – e- protect	8,202	60 years	10, 15, 20, 25 and 30 years.
Aviva Life – I- life	8,279	70 years	10—35 years
HDFC Life -  click2protect	11,910	65 years	10, 15, 20, 25 and 30 years
Kotak Life – e-preferred	12,921	70 years	Minimum: 5 years      Maximum: 30 years

So if you are looking at buying an online term plan there are certain other factors to look out for. Harsh Roongta, CEO, apnapaisa.com says that riders are also an important point to note. “However, most online term plans do not have detailed riders for their plans. The product differentiation is not good enough”, says Roongta.

One should look at the claim settlements ratio and the brand one is buying from. In addition, it’s important to check the services rendered by the life insurer you choose,” says Suresh Agarwal, Executive VP, Kotak Mahindra Life Insurance. That is out of a 100 claims how many has the company settled. He adds that a claims ratio of around 90 per cent is good enough. One can get this data from the Irda website.

Roongta also adds that one should check if the tenure of the cover suits your age because not all insurers offer a similar policy term.