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Ask Mint Money | Premiums on online term plans are substantially cheaper

Ask Mint Money | Premiums on online term plans are substantially cheaper
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First Published: Tue, Apr 19 2011. 10 16 PM IST
Updated: Tue, Apr 19 2011. 10 16 PM IST
I am 31 years old. I have a term life insurance of Rs50 lakh. I want to buy another Rs50 lakh term plan. I just want basic death benefit from a life cover and am not interested in investment or returns. Which policy do you recommend? Is it better to have life insurance policies from two separate companies?
—Sachin
There are a number of term plans available in the market, including online term plans that offer a substantial discount on the premium payable. At your age and profile, it would be advantageous for you to buy a policy online and look for a plan that offers you the best rate and buy it. Having multiple life insurance policies from multiple providers can sometimes create complications for nominee in case of a claim.
I have been paying a premium of Rs31,750 per annum for a life insurance policy since 2003 and my sum assured is Rs5 lakh. I now realize that a term policy is better. Should I surrender the existing policy at this stage? Will I get the entire premium amount back?
—Sandy
Since you have been paying the premium for eight years now, I would suggest that you continue for the entire premium-paying term rather than surrender at this stage. However, if you still wish to surrender, before making any decision, contact the agent or the company and determine what the surrender value of the policy is. You could augment the sum assured (on your existing plan) by opting for a term plan which is also available online at substantially cheaper rates.
I am 65 years old and have paid the first instalment of Rs50,000 for an unit-linked insurance plan (Ulip). The present value of my investment after about four months is around Rs40,000. Is it worthwhile to continue at my age, considering the reduction in value in such a short period?
From your query, the nature of your policy or the purpose for which you bought it is not very clear. I would suggest you read through the policy document and check for the charges and the benefits that the plan offers. If the benefits are good enough and serve your purpose in meeting your financial goals, I would suggest you continue with the policy. From our point of view, a Ulip always needs to be bought for the long-term, 10 years or more; only then will it serve its purpose.
Queries and views at mintmoney@livemint.com
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First Published: Tue, Apr 19 2011. 10 16 PM IST