One cannot afford an error when buying a online term plan. That’s because by the time one realizes it was wrong, she/he is already dead and gone and it is the nominee who would go through the pain of getting the claim amount. While most insurance companies will settle without any issues, some others may take a while or have reasons for rejection which one may not have considered significant at the time of buying the online term plan. And it is not worth making that mistake, right?
So here is the process we recommend when buying an online term plan in India.

How you can follow these steps to buy the right Online Term Plan
Step | What, How and Why |
1. Your Needs | This is the first point to consider and unfortunately this is exactly what every online term plan buyer does NOT do!!! They jump straight into the product based on what their friend or colleague bought, not realizing that what is right for others may not be right for them. Don’t make that mistake else you will turn out to be under-protected or overprotected, and sometimes you could land up with a term plan that may not be ideal for your family. So whether you are securing your income through an online term plan, or covering a large home loan, or trying to do both, you need to be clear about what it is your exact need and then choose the online term plan type, amount and period to suit that need precisely. |
2. Get your Basics Right |
Hey, do you know that you do not need a term insurance plan to cover your beyond Retirement? Why? Because your income and liabilities (not expenses) stop at Retirement and you need protection only if something were to happen to you BEFORE you retire, not after. How much of cover do you need? About 10-15 times your income, plus your loans and liabilities. Not more, not less certainly. |
3. Compare Premiums | You can easily compare term insurance plans and there are a whole lot of them available in the market – almost about 50 online term plan options to choose from. There are different types of term insurance plans so you need to make sure you compare the right types. |
4. Know the Company | It is important you choose a company you are comfortable with as a brand. It should by YOUR choice – not based on someone else’s recommendation – you are more likely to get it right that way. Would you marry a girl just if someone else recommends the person to be the best for you? 🙂 |
5. Check Claims Settlement Ratio | Very important to consider when you purchase an online term plan. Choose a company with at least 80% claim settlement ratio. We have some great articles on claim settlement ratio and we strongly recommend you read them. |
And finally… BUY ONLINE | So easy, so cheap, so convenient and it cuts out the agent who could leave your application form incomplete or put in a wrong fact/detail – that would be suicidal! Here’s where you can compare and buy term insurance plans. |
Good luck with your online term plan purchase and let us know if you need help.
Thanks Cherian, but we would not recommend that Babu should stop his policy. He can continue the policy without any worries.
Babu, just to add to MintWise’s good answer below, if you want, you can stop paying for this term plan and buy another one anytime. Do it before the next premium is due.
Dear Babu,
Your concern is valid but in our view, there is absolutely no reason to worry. Without getting into too much detail, the IRDA (Protection of Policyholders’ Interests) Regulations 2002, modified in 2014, ensure that consumer interests are always protected in the changing environment of insurance in India. We would like to believe that the merger will in fact bring out the best in two strong players and the ability to be able to service you as a customer will grow manifold.
As far as CSR is concerned, the kind of differences you mentioned are insignificant. The real test of claims ratio as far as you are concerned is the honesty you have applied to your own application form. If you have taken care of it, your claims ratio would be 100%. Else it would be 0%. There is nothing in between.
I am 42 years old, NRI, working in Oman. I have taken an online
term policy from Max Life insurance last year when I was in India
on my annual leave.
As I am pre-diabetic and taking oral medication, I have disclosed
my health factors sincerely in my proposal form. Even though
my medical examination results were normal, I have been asked
to pay an extra premium @ 50% based on my health declaration.
Now, I came to know that the Max Life Insurance company will
be merged with HDFC Life within an year and the policy will be
serviced by HDFC Life thereafter.
As you are aware, Max Life is having a CSR of 96.2% and the
claims pending for more than 3 months are only few with them.
Where as HDFC Life’s CSR is only 95% and they have more
than 280 claims pending with them for more than 3 months.
Based on the above facts only, many people decided to choose
Max Life as their preferred life insurance partner. However, more
than 75 lakhs policy holders of Max Life are now going to be taken
over by an insurance company with lower CSR.
In current market scenario, merger can happen between any
private insurers in India, in accordance with the acceptance of
respective Board of Directors. But what will be the consequences
to be faced by the policy holders in such corporate consolidations.?
Can I expect to continue with the same kind of quality treatment
and policy contract after the merger of these companies.? Is there
any regulation by IRDA to protect the interest of policy holders in
such mergers.? Being honest in every aspect, can I continue to pay
the premium and go ahead with my existing insurance contract.?
Expecting your valuable comments.