Which is the best life insurance plan in India ?

Find out which is the best life insurance plan in India?

Reema wanted to buy the best life insurance plan but was thoroughly confused; she had so many plans to choose from. Her mailbox was overflowing with so many and different offers from various insurance companies!

If you are in the same situation as Reema, please read this article.

Which is the best life insurance plan in India?

There is no correct answer to this question. Since every person has unique needs, he will opt for a plan that meets them. Nevertheless, lets' look at some factors that can make your policy the best life insurance plan.

1. Affordability

If you can afford your plan during its entire duration, then it makes it the best possible plan. Let's understand this in detail.

Let's assume you buy a term plan for 20 years. The premium payable is Rs. 15,000/- annually. Now can. you pay this premium regularly without fail for all those 20 years? If yes, then go in for this plan. Your premium should fit your pocket. 

On the other hand, a plan having an abnormally high premium, say Rs. 100, 000/- can out off many young people. But if you have a high salary job, then you may buy this plan.

Generally, term plans are more affordable than full life plans. The premium of a typical term plan comprises two parts- mortality charges plus administrative expenses. 

2. Easy to buy

Just as you buy mobile phones, clothes, plane and train tickets easily, you can buy life insurance plans also easily. These days, it is super easy to buy term plans easily. Also, you can calculate the sum assured and other factors while evaluating these plans. Most insurance aggregator websites have calculators on their webpages that can help you find out your benefits from the policies. 

You can buy life insurance policies in two ways:

a) Offline-You can buy your life insurance policy through a broker. In this case, you don't have to pay any brokerage. He comes to you advises you about the various plans available and based on his advice.

b)Online- Now it is very easy to buy a life insurance policy offline as well. Besides ease of use, online purchase of life insurance costs less also. Typically, you save anywhere between 5% to 20% when you take this route. Most insurance companies will be too happy to pass the brokerage to you indirectly if you purchase your insurance on the net.

Also, read- How to buy insurance online?

3. Offers rebate

A good insurance plan offers a rebate to policyholders choosing a higher sum assured. Some life insurance companies also offer rebates to non-smokers, people not having diabetes/high blood pressure, women, and a few other groups. If you belong to one of these groups, then you may choose a plan that gives you rebates.

4. Flexibility in paying premia

Is your life insurance plan flexible? Does it allow you to pay your premium according to your budget and convenience? If the answer is yes, then go in for that life insurance plan. 

5. Beyond Vanilla Term Plans

Most policyholders don't think beyond plain vanilla term plans. But you'd be surprised to know that there are some term plans that offer maturity value equivalent to the return of all paid premia. These plans are called Term Plan with Return of Premiums (TROP). 

In simple language, this means that some term plans pay the policyholder a certain sum if he/she outlives the term. 

Also, read- Is insurance an investment?

6. Claim-Settlement Ratio

Finally, while selecting your ideal life insurance plan, you may check the claim-settlement ratio of the insuring company. This means finding out what percentage of claims submitted were settled by the company and in how much time? You may choose that company which processes claims faster.

To summarise, there is no ideal life insurance plan for anyone. However, you may choose one depending upon the factors listed above. 

Do you have any queries on investment? Please leave your questions in the comment box below.