In line with the trend of insurance companies, over the past few months, increasing their focus on traditional endowment and term insurance plans, Birla Sun Life Insurance added two pure protection covers – Birla Sun Life Protector and Birla Sun Life Protector Plus to its portfolio recently.
These are pure terms plans — that is, they offer no maturity benefit to the policyholder if s/he survives the term. However, term cover is deemed as a must-have for individuals, as it is the cheapest form of life insurance and serves its fundamental purpose – of providing for the insured's dependants financially in the event of his/her demise.
The characteristics of both the variants (Protector and Protector Plus) are largely similar. While Birla Sun Life Protector is for those looking for a cover of between . 5 lakh and . 49,99,999, Protector Plus offers cover beyond this limit. There is no upper limit on the sum assured under Protector Plus, but it would depend on the company's underwriting guidelines.
Both plans offer the option of increasing the sum assured every year. The riders attached to the products are similar as well — critical illness, accidental death and disability, hospital care, surgical care and waiver of premium. Insurance seekers can choose policy tenures of between five and 30 years.
The key difference between the two plans, apart from the amount of cover provided, is the discounts in premiums, which are linked to the insurance-seeker's health. While women have to pay lower premiums than men in both the plans, Protector Plus rewards nonsmokers for maintaining a healthy lifestyle.
Under Birla Sun Life Protector, a 35-year-old male will have to shell out an annual premium of . 4,920 for a . 20-lakh sum assured (level) for a 20-year tenure; a woman, on the other hand, will have to pay a premium of . 4,170 for the same cover, provided all the other parameters are the same. Likewise, under Protector Plus, the annual premium for a 35-year-old male (smoker) for a cover of . 1 crore will be . 21,150 (. 16,900 for men staying away from tobacco), while a woman will have to pay . 17,100 (. 13,850 for non- smokers).
UPSIDE:
Term plans offer the cheapest way of ensuring dependants are taken care of in the event of the death of the insured. Hence, they are recommended by all financial planners as a must-have.
DOWNSIDE:
Underwriting norms followed could be very stringent, which means that not everyone who can afford the premium can hope to buy the policies, specifically Protector Plus, since it leans heavily on the insurance-seekers' state of health.
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