After launching the cheapest ULIP plan in the industry, Aegon Religare has done it again. This time the company claims to have launched the cheapest term insurance plan in the industry. The company says that it latest term insurance plan – iTerm Plan – launched by it is cheaper by 50-60% than other similar term insurance plans available in the market. Let us have a detailed look at the plan. Features of the Plan

The plan was launched by the company on 5^th November 2009. As per the company brochure following are the features of the plan:

Death Benefit: In case of unfortunate death, the sum assured is paid to the nominee.

Maturity Benefit: There is no maturity benefit in case of this policy.

Tax Benefits: The premium paid under the policy will qualify for income tax deduction under Section 80C of the Income Tax Act.

The death benefit payable to the nominee under the policy is exempt from income tax under section 10(10D) of the Income Tax Act.

Comparison of Premiums

The below table shows the comparison of premiums of similar plans offered by other insurance companies in the market

Please Note: We have taken the premium rates from the respective websites of the insurance companies offering these products. The rates are as on 23-November-2009. For comparison purpose in all the cases we have taken an example of a 30 Years old male person. The sum assured in all the cases is taken as Rs 24 Lakhs and the tenure of the policy is taken as 25 Years.

Internet Channel

The product is very easy to understand even by those who don’t know much about insurance. Unlike other insurance policies that can be bought through insurance advisors / agents, this policy can be bought exclusively through the internet channel. The buyer needs to make the payment through the internet by credit card or online banking account. It is easy and convenient for the customer to buy the policy online, from the comfort of his home. Once the customer makes the payment, he receives the policy details instantly online. The policy offers the customer the combination of convenience and value.

For the success of this product Aegon Religare is banking on the growth of internet penetration and e-commerce transactions in India. As per the company, India has 60 million internet users with recorded e-commerce transactions amounting to Rs 1800 crores in Financial Year 2008. Aegon Religare is targeting this user base and the future growth in this segment to make this exclusive online product a big success. Also by making the product available only through the internet channel, the company has bypassed the advisors / agents and thereby passing the cost savings to the customers by offering the products to the customers at a lower premium. The company claims that the premium of this product is 50-60% lower than the premium charged by other insurers for similar term insurance products. The lower premium makes this product the most attractive available in the market.

Premium Payment Mode

The premium needs to be paid annually till the term of the policy. This policy does not offer the option of paying premiums monthly, quarterly or half-yearly.

Premium Payment Mode

The premium needs to be paid annually till the term of the policy. This policy does not offer the option of paying premiums monthly, quarterly or half-yearly like other insurance products.

Procedure to buy the Policy Online

The website guides the person step by step on how to buy the policy online.

· As a first step, based on the person’s current age, retirement age and the net monthly expenses the insurance amount required to be bought is calculated.

· Next based on the insurance amount and the gender of the person and based on whether the person is a smoker or a non-smoker the annual premium is calculated. At this stage the website also offers the option to compare the premiums of other companies offering a similar product

· Next the person needs to enter his personal details, communication address, sum assured, policy term etc. The premium amount is calculated and the eQuote number is generated.

· Next the person needs to complete the remaining formalities like medical history and other details and make the premium payment. The policy details are generated online.

Other features of the policy include:

Free Look Cancellation: In case the customer is not satisfied with the terms and conditions of the policy, he may choose to cancel the policy within 15 days of receiving the policy documents. The customer will be paid back the premium after some deductions like stamp duty, medical reports and proportionate premium for the period for which the risk was covered.

Grace Period: The customer is allowed to pay the premium within 30 days from the premium due date. If the customer does not pay the premium within the grace period of 30 days the policy will lapse and the insurance cover will cease. Such lapsed policy can be reinstated within the 2 year time period from the premium due date, the policy will terminate.

Policy Surrender: On surrender of policy, no surrender value is paid as the policy does not acquire any surrender value during the tenure of the policy.

Exclusion:

In case of death by suicide during the 1^st policy year, no death benefit is payable.

This article is written by Gopal Gidwani. He can be contacted at This e-mail address is being protected from spambots. You need JavaScript enabled to view it for any queries on Financial Planning, Tax Planning and Investments. He is an qualified Associate Financial Planner (AFP) in Investment Planning, Tax Planning, Insurance Planning and Retirement Planning