"AT present, only term plans are sold online as advice on saving component is not required" GN Agarwal Chief actuary, Future Generali India Life Insurance Company

TERM plans sold online by life insurance companies are 7-8 per cent cheaper than those sold through insurance agents. The companies are passing on the expenses saved in distribution costs to customers for term plans sold online.

Companies such as ICICI Prudential Life, Kotak Life, Future Generali, Aviva Life and Aegon Religare Life have started selling term plans exclusively designed for online customers.
"At present, only term plans are sold online as advice on saving component is not required. We have passed on the commission saved to the customers," said GN Agarwal, chief actuary, Future Generali India Life Insurance Company.

Term or pure insurance products do not have any investment component and do not have any maturity benefits. If the policyholder outlives the tenure of poli cy, he doesn't get any return on premium.

To a 30-year-old male for a policy tenure of 25 years and sum assured Rs 1,00,00,000, ICICI Prudential Life charges Rs 9,900 premium, Aegon Religare charges Rs 10,400, and Aviva charge Rs 8,269 for a policy tenure of 20 years.

Andrew Cartwright, chief actuary, Kotak Mahindra Old Mutual Life Insurance, said the term rates have dropped significantly over the years.

"Some companies are not focusing on term insurance, and hence not worried about being competitive, and that they have not revised their rates recently.
Rates will also vary depending on which segment of the market is being targeted. We offer cheaper rates for females and non-tobacco users. Other companies offer better rates for large ticket sizes recognizing that the standard of health care is better for wealthy individuals. For small ticket sizes, a bigger portion of the premium is taken up by expenses, because the process of issuing and servicing the policy is not proportionately lower," said Cartwright.

One can also buy riders such as critical illness, disability riders or accident cover along with term plans to save costs.
Source :- mydigitalfc