Online term plan and Live mint news article

POSTED BY Sunny Gandhi ON December 7, 2012 12:17 pm COMMENTS (7)

Hi Manish and Team,

I am planning to buy the Online term insurance plan. However, I came across this recent article which mentions online term plans are not scientifically priced and this will get reflected in the claims settlment ratio. Please refer to Question no. 5 in this link

I would like to know your thoughts on this?

Many thanks,


7 replies on this article “Online term plan and Live mint news article”

  1. There is a medical test …at least we have it…Team from insurance company visited home and collected sample for different tests like sugar,lipid profile etc..they as well check BP ,take out ECG…

  2. online policies target internet savvy folks. The underwriting rules are different than offline policies if I am not wrong Deepti Bhaskaran did a story in one mint that they assume the online policy holders will be of better health than offline policy holders because of greater consciousness. This has no basis because the internet generation has its own set of pressures and problems. The point being made is the difference bet online and offline is not just agent commission. It is the business model which is flawed

    Anyone who giving or taking 1 crore policy without a medical check is plain mad.
    Naturally if there is death there will be investigation. Agents no nothing about claims dept workings.

    I can start smoking the day after I take a policy. I have no legal obligation to inform the company about this. yet if I die from lung cancer down the line what would happen?
    I test +ve for diabetes a week after the policy comes into force the list is endless.
    Family members may know of an illness only upon death doesnt mean the holder withheld it.

    The difference bet genuine withholding and lack of knowledge is a grey area. After two years the insurer legally has no choice but to assume the policy holder was truthful.

    These grey areas persist offline policies as well. but because the loss incurred is so much more (low premiums)in the case of online policies the investigation will be tougher.
    hence a risk, This is how I interpret this onemint article.

    There are always way to get the money from ombudsman etc but who will suffer not you the holder but your wife and children.

    btw I thought people should not advertise their products in this forum!?

  3. Not understood how will it affect claim settlement ratio..Company can’t deny claim because they don’t afford it..there are consumer forums / insurance ombusman to help you out…Even suicidal cases can not be denied after completion of 2 years.

    If it affect claim settlements really then not only online but Offline policy holders will also be affected.

    It should not affect claim settlement ratio but there will be steep increase in premium rates for new comers if sales of online policies grow with great pace and this will happen within next 2-3 years.

    I think LIC will extract out premium rates from experience of others and then only launch online facility.

    Thats what I think…

  4. Dear Sunny,

    We understand the responsibility you fulfil when you buy life insurance. We are committed to honour all your claims quickly and fairly.

    For our online term plans, total claims received till Oct’2012 is 12 out of which 9 claims worth 7.35 crore were approved. Average time taken to settle the 9 claims was 7 days from submission of all documents.

    Three claims worth 76 lakh were rejected since the policy was taken less than one month before the demise and prevailing illnesses had not been disclosed by the policyholder.
    ICICI Prudential Life Insurance aggregate claims data is publicly available on our website.

    Please visit for the most recent reported claims figures. The same data is also linked to at the IRDA website (Please choose L-40 for claims data).

    You may consider ICICI Pru iCare, a term plan from ICICI Prudential Life Insurance which can easily be purchased online and allows you to get a cover of up to 1 crore without any medical tests. This makes it very easy and quick to get protected.

    To find out more about this product and to see if it suits you, please visit

    Consumers have chosen ICICI Pru iCare as Product of the Year 2012 in the Life Insurance Category based on survey of over 30,000 people by Nielsen.

    Please understand that we only offer suggestions based on your requirements, however choosing a policy most appropriate for you remains at your discretion.

    Warm Regards,
    Life Insurance Help
    ICICI Prudential Life Insurance

  5. bharat shah says:

    @ Free Financial Calculators
    i don’t comment on your thoughts. but like point out difference : life insurance companies are regulated by IRDA, whereas financial advisers are free birds at least in india! so be a little bit more cautious to select a financial planner/advisers!

  6. This is the reason why I did not go for on an online plan. However every financial expert today advices”

    Choose any term plan, buy the cheapest, just fill in the form honestly.

    I am no expert but the whole thing does not smell right to me. I am as uncomfortable as you are.

    The next time a financial planner says buy the cheapest term plan maybe we should ask:

    certified financial planners charge from 5K to 20K should we just go the cheapest since every one is equally qualified?

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