I have a term insurance policy. When I compared the premiums charged for online term insurance with that charged by private companies, I realized that the amount that I am paying is very high and I can get the same cover at a lower premium. Why is there a differences in the premiums? Do private companies have a lower settlement ratio? Should I move to cheaper plans? -Sandip Khetle You are asking all the right questions. Online term plans are cheaper by about 20-30%, primarily because the insurer does not pay distributor commissions on these products. Private companies have a lower settlement ratio than government-owned insurers. However, I do not believe that this is driving the low cost of online term plans. In you are Internet-savvy, then move to a cheaper online plan. Make sure you purchase your new policy and have it in your hand before lapsing your existing plan. Since you will not have an advisor to help you fill out the proposal form, make sure that all details are filled in completely and accurately. Incomplete or inaccurate information is a major reason for claim repudiation. I am 26 years old and I want to buy a life insurance policy. My annual income is Rs. 7 lakh. My parents and my brother (15 years) are dependent on me. I will get married in October this year. Should I buy a term plan, endowment plan or money-back policy? What should be the sum assured? What are the things that I should keep in mind before buying a policy? -Umesh First, buy a term policy to provide maximum security to your family. You should purchase a sum assured of about Rs. 70 lakh, which is 10 times your annual income, for a tenor of 30 years, which is the maximum term insurers provide. This term plan will cost you about Rs. 6,000-8,000. You could consider investing into equity through a growth-oriented unit-linked insurance plan with a tenor of 10 years or more.

1. Ask Mint Money | Online term plans are
cheaper as there are no distributor fees
Make sure you purchase your new policy and have it in your hand before lapsing
your existing plan. Since you will not have an advisor to help you fill out the
proposal form, make sure that all details are filled in completely and accurately
Kapil Mehta, Managing director and principal officer, SecureNow
Insurance Broker Pvt. Ltd
Published in Mint Dated 24th April, 2012
I have a term insurance policy. When I compared the
premiums charged for online term insurance with that
charged by private companies, I realized that the amount
that I am paying is very high and I can get the same cover
at a lower premium. Why is there a differences in the
premiums? Do private companies have a lower settlement
ratio? Should I move to cheaper plans?
-SandipKhetle
You are asking all the right
questions. Online term plans are
cheaper by about 20-30%,
primarily because the insurer
does not pay distributor
commissions on these products.
Private companies have a lower
settlement ratio than
government-owned insurers.
However, I do not believe that this is driving the low cost of
online term plans.
In you are Internet-savvy, then move to a cheaper online plan.
Make sure you purchase your new policy and have it in your hand

2. before lapsing your existing plan. Since you will not have an
advisor to help you fill out the proposal form, make sure that all
details are filled in completely and accurately. Incomplete or
inaccurate information is a major reason for claim repudiation.
I am 26 years old and I want to buy a life insurance policy.
My annual income is Rs. 7 lakh. My parents and my brother
(15 years) are dependent on me. I will get married in
October this year. Should I buy a term plan, endowment
plan or money-back policy? What should be the sum
assured? What are the things that I should keep in mind
before buying a policy?
-Umesh
First, buy a term policy to provide maximum security to your
family. You should purchase a sum assured of about Rs. 70 lakh,
which is 10 times your annual income, for a tenor of 30 years,
which is the maximum term insurers provide. This term plan will
cost you about Rs. 6,000-8,000.
You could consider investing into equity through a growth-
oriented unit-linked insurance plan with a tenor of 10 years or
more.
I had taken five life insurance policies 17 years ago. All the
policies will mature within the next three to four years. I
want to surrender these policies due to a financial crisis.
What should I do so that there is minimal loss?
-Peter
Since your policies were all purchased before 2000, they are
traditional policies issued by Life Insurance Corp. of India. Some
of these policies had a loan provision that allow you to borrow
from the insurer with your policy as collateral. Check your policy
contract for this feature as this may be your best option. If the
loan facility is not available, then read each of your policy

3. contracts carefully to understand if there is a surrender penalty.
Surrender your policies in increasing order of surrender charges.
Kapil Mehta is the managing director & principal officer,
SecureNow Insurance Broker Pvt. Ltd