Skip to main content

Online term Insurance plans appear too good to be true

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 

Despite scepticism on their financial prudence, they are not a threat to costumers

IRDA is fastidious about companies adhering to the mandated liquidity and solvency ratios. So, new businesses can't be garnered indiscriminately

The slew of online term insurance plans launched by various industry players is certainly evoking awareness among prospects and interest among the financial planning community.

While term plans were already touted as the best solution for ones insurance requirements, online term plans are that much more preferable, considering the (nearly unbelievably) low premium they charge. However, for every five enthusiasts, there is one Doubting Thomas who believes that if something looks too good to be true, it probably isn't.

According to them, the main reasons for such scepticism are: In their quest for market share, companies are sacrificing financial prudence. This race to the bottom may help them increase the number of customers but the nominees of these customers will encounter problems while making a claim, as companies will pull every trick out of the book to deny claims.

The problem will be compounded by the fact that no agent will be present to guide the nominees. Hence, they will have to run from pillar to post to get a hearing.

Companies will be diluting underwriting requirements to gain customers. This would backfire at a later stage, as evidenced by an outsized increase in the Adverse Claim Experience. This may even jeopardise the financial solvency of these companies.

While I will not profess to know all the answers, here is my view: Companies are not indulging in any hara-kiri by launching such policies, as none of them is charging a premium below the mortality charges incurred. Also, these charges themselves are trending downward (as the new mortality tables depict).

The Insurance Regulatory and Development Authority is fastidious about companies adhering to the mandated liquidity and solvency ratios. Hence, new businesses cannot be garnered indiscriminately by throwing caution to the winds. This mode of distribution is extremely cost-efficient for companies and they are merely passing on the savings to the customer. Another article on this subject deals with this aspect.

While a customer satisfaction survey is possible in a term insurance policy, (owing to the customer not being there to answer it), only a foolhardy company would sacrifice goodwill by denying genuine claims. Also, if there is suspicion of fraud, the claim would be withheld anyway until the investigation is complete. In such a case, no agent can hasten the process.

I have opted for online term insurance policies from two different companies and I must say the medical underwriting standards are not lax by any yardstick. Also, the onus is on us to be as truthful as possible in the application form. If we are not, the threat of discovery at a later stage will always hang over our head like the Sword of Damocles. In such instances, it is we and not the insurance company who is doing our nominees the greatest disservice.

Finally, if it is of any comfort, the Life Insurance Corporation of India is set to launch its own online term policy. That, I guess, should set all doubts to rest

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

Submit filled up application Collection canter near you

Popular posts from this blog

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...
Read more

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...
Read more

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...
Read more

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...
Read more

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now