Purchasing an online term plan | Value Research Insurance plans that are available online are preferable because they are cheaper than the ones sold by agents
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Purchasing an online term plan

Insurance plans that are available online are preferable because they are cheaper than the ones sold by agents

I had taken LIC Amulya Jeevan policy (offline term plan of ₹25 lakh) six years ago. I am paying a premium of ₹7,300 per year. Since then a lot has changed in the term plans market due to arrival of online plans. I can get around 40 Lakh coverage for LIC Online Term Plan or around 80 Lakh coverage for any other term plan from private insurance companies if I take a new policy at my current age. Should I surrender this policy and purchase a new online term plan? Also is there any rationale/advantage in taking the new online term plan from LIC than private players?
- Chetan Ladha

Online plans are surely cheaper than offline plans due to absence of agents. You may go for a new plan. But first get a new cover before surrendering your existing insurance plan.

Insurance cover must be decided after considering your liabilities, expenses, income and standard of living. Do not buy just any sum. Basic aim of life insurance is to provide financial freedom to your loved ones in your absence. Your family will suffer if you do not insure yourself adequately. Calculate the required insurance cover then go for a term plan. For details refer to our article - How to Really Buy Insurance

LIC's biggest advantage is that it is a government-backed entity. But all private insurance players adhere to IRDA regulations and all of them maintain desired solvency ratio. You need not worry if you are disclosing all material information correctly. Besides your preference for LIC, you may consider online term plans from HDFC or Aviva.


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