Term plans - Price And More

Online term plans are evoking great interest among consumers and insurers. For consumers, these online plans are quick, easy to buy and come at a lower premium than what they would have paid if purchased through an agent. 

Since these term plans offer no benefits on maturity, the attractive pricing has been the unique selling proposition or the USP of these plans, leading to a price-war. However, as a consumer, there are many other factors, besides the price, that are worth considering before you sign on the dotted line. Before buying the policy, over and above the premium payable, you must also know the following -

§  Claims settlement ratio: In a term plan and more so for those purchased online, the claims settlement ratio i.e. the number of claims settled out of every 100 claim requests made to the company is of critical importance. A higher ratio not only speaks about the customer services of the particular insurer but also assures you that your beneficiaries/ nominees will not face any problems in case of an unfortunate eventuality.

§  Claims intimation TAT (turnaround time): This is the time period within which the beneficiary/nominee must inform the insurer in written form about the death of the policyholder. During a crisis, it may not be possible to inform the insurer of the same. Therefore, you must check with the insurer about the time period within which the insurer must be informed. See to it that the policy provides a reasonable amount of time.