Term Plan — LIC + Private Insurance

POSTED BY Jipal Shah ON April 14, 2012 9:26 am COMMENTS (3)

I am in confusion regarding term plan, to go with private insurance companies or not.
It is a matter of family safety assurance. I dont know somehow I dont have complete faith in private companies.

My age is 32 years.

What I have decided to go with 20 lacs term plan with LIC (premium:5500,term:20 years). After LIC I will buy one more term plan of 75 lacs from Aviva or other private company for 30 years with premium around 7600 (Aviva:iLife).

So, I will end up with paying around 13,000 premium with 95 Lacs term plan. If I will directly go with 1 crore term plan with private companies which costs me (Aviva: 9000, HDFC: 12500, Kotak:13000, ICICI: 16000) so my consolidated premium is comparative.

And if in case of unfortunate event death, first claim settlement with LIC, will be faster. Then same LIC settlement acknowledment to private company for settlement.

Please advise on this approach.

Thanks !!

3 replies on this article “Term Plan — LIC + Private Insurance”

  1. Navneet Kumar Sharma says:

    I have take a TATA AIG Maha Life Gold plan for my daughter. In this I have to give premium up to 15 years and the amount is Rs. 9698 / – per year. I have already been paid 7 premium and this year got an ungaurnted bonus of Rs. 2200/-
    I am confused whether to continue this plan or surrender this year, please suggest

  2. Dear Jipal, in a sense you are predicting the future for your own family. If there is a claim, as per your own belief, LIC ‘ll pay the claim faster & other pvt. insurer ‘ll accept the LIC claim & ‘ll honor the claim. If you are personally comfortable with the Idea, please go ahead. What’s my addition for you?

    Please arrange a combo of 1C Pvt. Insurer + just 5L from LIC. For LIC, the prem. for 5L cover for 25Y is 2198 Rs. Hope it helps you.

    Apart from this, educate one family member + one close friend for the claim procedure to be followed in both term plans.



  3. Ramesh says:

    It is not comparative, since the periods are different (20 years vs 30 years).

    Second, if say LIC says it will not pay the claim, then? In any case, your family is stuck with dealing with 2 companies, which is kind of hassle. LIC claims are settled faster and surer is a myth.

    Take a single policy at the start. If you really need to bump up the Insured Value, then consider adding another policy.

    Aviva and Aegon are good companies, with decent business practices. Recently, one of my friends who had taken a policy of Aegon (online term plan) got his insurance cover increased automatically by the company, on the basis that their calculations have changed and they decided to pass the benefit to the end-customer. I have not come across any such example for any other company (yet).

    In the end, decide what you and your family is comfortable with after pondering over all Facts.


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