Online Term Insurance Plan

What is a Term Plan?

As compared to traditional insurance plans, Term plan is a basic insurance plan wherein you pay a much lower premium to get a high sum assured. The other main difference is the death benefit which is provided only in case of death of the policy holder. It means that in case the policyholder survives the entire term of policy, nothing will be paid to the nominee hence there is no return on maturity of the term plan. A person of 35 years of age can buy a cover of Rs. 1 crore at around Rs.10,000/- per annum only.

Here is the table showing the best online term insurance plans in India (as on Oct-2015)

Company	Scheme Name	Policy Term (Years)              Min        Max	Min Age at Entry	Covers upto   (Max Age)	Sum Assured  (in Rs.)                                                             Min          Max	Premium (in Rs.)	Claim Setting % (2014-2015)
ICICI Prudential	iProtect	10     30	20	75	3 Lakh        NA	12,247	94.1
HDFC Life	Click 2 Protect	10     30	18	65	10 Lakh 10Crore	11,910	94.0
LIC	e-Term Plan	10     35	18	75	50 Lakh      NA	16,405	98.1
Max Life	Max Life Online Term Plan	10     35	18	70	25Lakh100Crore	8,314	93.9
Kotak Life	Preferred e-term	10    40	18	75	25           NA	8,287	90.7
SBI Life	eShield	10    30	18	70	20           NA	13,135	91.1
Bajaj Allianz	iSecure	10   30	18	70	20          NA	13,438	91.3
Aegon Religare	iTerm Plan	5    40	18	75	10          NA	8,202	81.0

Why is it available so cheap?

Because there are no agents involved; it is similar to your online shopping wherein no shopkeeper/distributor is involved . All the amount which company have to pay towards commission/other payouts and even the other administrative costs are much lower. The same amount is passed back to the end user. The other statistically proved reason is the longevity of those buying online as the population is mostly between in between 30s and 40s and also more alert and conscious about their security & well being.

Advantages:

Term plan has many advantages than your traditional policies as follows:

1. Lowest Premium (50-60% cheaper than offline) 
2. Highest Coverage
3. Faster process & Issuance 
4. Less paperwork involved 
5. Utmost Transparency 
6. Flexible in selecting a required plan
7. No medical checkup for certain age groups or up to Rs. 50 lakhs sum assured

Disadvantages:

Though there are lot of advantages as seen above for the policy buyer but ultimately it's your nominee who is going to apply for the claim if arises. You have to make sure that the technology/lodging claim online and other filing process should not become a bottleneck for them because nominee in most cases would be either wife or parents. They should not be made run from pillar to post to get their due claim. This happens mainly because there is no agent or mediator who can help in all the paperwork (online) to get it done especially in times when they are under emotional trauma due to the death of their loved one. Even local office of insurance companies won't be able to help because it is online and could be done online only.

Conclusion:

Online term plans are best if you can educate your dependents for the procedures and formalities involved in the claim and also keep them updated about your policy contract and jurisdiction. Enjoy your cup of coffee without comparing its cost to the term plan and don't fall prey to marketing gimmicks, be smart and buy smart.

Do you have a Home Loan and have idle investments too.Then time to know about Home Saver Option.

I am a corporate employee since 10 years. I started with a salary of Rs. 3,00,000 p.a. After two years, I started drawing Rs. 5,00,000 p.a. So, like any other individual, I wanted to fulfill my first wish in the list, owning a home. After many good discussion sessions with parents, relatives, friends, etc, I decided to buy a 3 bedroom flat for Rs. 30,00,000. When I applied for a loan, I got approval for Rs. 24,00,000. with 20 years tenure, paying Rs.25,000 as EMI. As years passed, my salary, savings,the interest rate of my home loan, and my EMI everything was on uptrend. The graph of expenses and expectations, as well, is going higher. My thoughts are :

• First, close my home loan as fast as I can.
• Next, have funds for unexpected expenses.

So, to close my home loan either I have to increase my EMI or reduce the tenure of the home loan. Since I am earning enough, I would like to increase my EMI. So what happens to my savings and other investments?  I don't want to  move any of my investments. I want to have funds for the reasons unknown. What options do I have then?

Yes, for those under this dilemma, home saver scheme is an option. Where you can deposit your surplus funds in an account and this account will be used to pay your principal amount of your home loan or reduce the interest amount you pay  and this in turn, helps you to reduce the tenure. But the interest you pay will be relatively higher than you pay for a normal home loan. At present, there are five banks which offer this scheme. Each bank's scheme has its own name. And, each scheme has its own advantages and dis-advantages.

Let us get into the details of the options that the banks offer:

SBI Max Gain  Scheme

It enables the customers to earn optimal yield on their savings by reducing interest burden on Home Loans.

• Interest Calculated - Base Rate + 0.25% to 0.30% (At Present 10.00%)
• Eligibility - Salaried individuals 
• Minimum Amount - 20 lakhs
• Allowed to withdraw - Yes

IDBI Home Loan Interest Saver option

Home Loan Interest Saver provides you the facility of linking your Home Loan account with the Flexi Current Account (The interest liability of your home loan comes down to the extent of surplus funds parked in the operative current account. You will be allowed to withdraw or deposit funds from this operative current account as and when required. Interest on Home loans will be calculated on outstanding balance of loan minus balance in the Current Account based on EOD balance. 

• Interest calculated - Base Rate + 0.15% (At Present 10.15%)
• Eligibility - Salaried individuals Who crossed 22 yrs of age.
• Allowed to withdraw - Yes

Citi bank Home Credit Vanilla option Fast Track option

Citibank offers you 2 options in Home Credit loans that you can choose depending on your needs:

Home Credit Vanilla Option :

Home Credit Vanilla option gives you the option of maintaining liquidity. An overdraft line is set on the Home Credit account and interest savings arising out of the Home Credit facility go towards increasing this line, which is always available for withdrawal by you.

Home Credit Fast Track Option :

Home Credit Fast Track gives you the option of repaying your home loan faster. Interest saves are adjusted towards reducing your loan outstanding, which effectively reduce the tenure of your loan and help you close your home loan faster.

• Interest Calculated - 9.95% p.a. to 10.35% p.a.
• Eligibility - Salaried individuals with at least two years experience.
• Minimum Amount - 25 Lakhs
• Allowed to withdraw - Yes

Standard Chartered Home Saver option

The surplus money in your Linked Transaction Account will be used to offset the principal of your home loan.Effectively, interest will be paid only on the difference between the outstanding loan amount and your surplus funds.

• Interest Calculated - 9.95%  to 10.10% p.a.
• Minimum Amount - 5 Lakhs

HSBC Smart Home

Your Smart Home is operated through a Smart Home account that acts as a Current Account with an overdraft limit equal to the amount of the loan disbursed. Your home loan interest is calculated, on the principal outstanding minus the savings deposited in your Smart Home account every month, over and above your EMI. So,you can reduce the quantum of interest paid and thereby reduce the tenure of your loan.

• Interest Calculated - At Present 10.10%
• Eligibility -  21 years
• Minimum Amount - 5 lakhs 

What Makes Smart Home or Home Saver option different from a Normal Home Loan / Advantages with Home Saver Option 

• The interest component or the principal amount on your home loan decreases hence the tenure also decreases.
• You can withdraw money when needed without any prior notice to the bank.
• You are forever on a safe side as you save money for unexpected  necessities. 
• It also helps to reduce tax burden. 
• Calculations are done on a daily basis.

Dis-advantages with the Home Saver Option

• The interest you pay on your home loan is more than you pay for a normal home loan. 
• You might always withdraw the idle money from the account for unnecessary expenses.
• If you are not sure of savings during the tenure you might end up paying more interest on your home loan.
• Banks (some branches) usually lengthen this loan process as the benefit is more to the customers than to the bank.

Punjab National Bank Flexible Housing Loan

Provides the borrowers the advantage of substantial savings on the interest component on account of facility to deposit the surplus funds in the overdraft account and withdraw the same as per the choice ad needs.

• Interest Calculated - BR + 0.5% (At Present 10.05%)
• Eligibility - Below 50 years
• Allowed to withdraw - Yes

Best fit for - Salaried employees and self-employed individuals whose income is not constant.

Before you opt for a Home Saver option, please do know the eligibility and all the terms and conditions about the calculations to avoid confusion. For those who are confident of savings and for those whose return on other investments is lesser, can really try to work on this option.