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Analysis report on
Term insurance

Project by

Mithun Surpur

Intern @ www.investorsareidiots.com
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The right Life Insurance policy goes a long way in providing risk cover for the
insured as well as saving hard earned money.

The Term Plan project carried out for www.investorsareidiots.com involves the
analysis of the various term plans provided by Life Insurance Companies.

This project answers some questions on buying term insurance

a. Who has to buy a term plan?

b. What is the use of term plans?
c. Types of term plans?

The parameters used for answering the question on term insurance are.

Types of term plans.

Types of premium paying term:
There are 3 ways in which you can your premium
A) Regular. B) Single. C) Limited.
Entry Age: What is the age at which you can enter the policy?
Sum Assured: What is the amount of premium assured in the policy?
Maturity Benefit: Is there any maturity benefit for the policy?
Surrender Benefit: The benefit available if you surrender the policy
Accessibility: How can you buy the policy?
Additional Rider Benefit: The rider available along with the policy?
Alteration to Premium: Is there a possibility to increase or decrease the
premium?

I am thankful to www.investorsareidiot.com and project guide Mr. Ketan Verma

for helping me at every step to do project on term insurance.
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ANALYSIS REPORT ON TERM INSURANCE

What do you mean by Term Insurance?

Term plans are the purest form of insurance products and they are very
affordable with their low cost and high coverage. Term plans are not attached
with any savings or investment product. In a pure term plan product, if the policy
holder dies the nominees will get the money that has been promised by the
insurance company as the Death Benefit for the policy holder. In a pure term
policy there is no maturity or surrender benefit. In the market, many variations of
Term Plan are available, which provide maturity and surrender benefit.

Insurance Premium would usually consist of 3 parts, namely Mortality Charge,

Administrative Expenses and Investments. Mortality Charge is the charge paid to
the insurance company by the policyholder for providing him with the assurance
of the Death Benefit. Expenses are administrative costs for documentation and
investments are the amount invested for providing the Maturity Benefit, if any, to
the customer.

Since Maturity Benefit is usually zero in Pure Term Insurance Plans, there is no
requirement for Investment. Hence Term Plans are the cheapest plans in the
industry with the highest possible cover. Thus, any person will be able to take a
high cover for the protection of his family at a very nominal cost if he opts for a
Term Plan.
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Who has to buy it?

The usual customers for this plan would be someone who is the only earning
member of the family and has a number of dependents or someone who has
taken a loan. It is also beneficial for high net worth individual, who needs a very
high cover.

In certain plans the coverage can be increased after taking the policy and hence
can be availed by young individuals who do not have much liability now.

What is the use of Term Plan?

It helps to provide income to the family in case of the policy holders death. The
family remains protected in financial terms even after death of the policy holder.

Types of Term Plans

Level Term Plans: The life coverage remains the same throughout the policy
tenure
Increasing Cover Term Plan: The life coverage increases steadily at a
certain fixed rate of about 5% every year
Decreasing Cover Term Plan: The life coverage decreases steadily at a fixed
rate till it reaches the threshold limit.
Home loan Cover Term Plan: The plan is used for covering the home loan
liability
Income Plan Term Plan: The plan provide monthly income for the family
post the death of policy holder
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Analysis:
In this assignment we analyzed the term plans available in the Indian Market.
Presently there are 24 companies in Life Insurance Business in India

The parameters we used while analyzing the term plan are

Type of term plan.

Type of premium paying term:
There are 3 ways in which you can your premium
a) Regular. b) Single. c) Limited.
Entry Age: The age at which you can enter the policy
Sum Assured: The amount of premium assured in the policy
Maturity Benefit: Maturity benefit for the policy
Surrender Benefit: The benefit available on surrender of the policy
Accessibility: How to buy the policy?
Additional Rider Benefit: The rider available along with the policy
Alteration to Premium: Is there possibility to increase or decrease the
premium?
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Bajaj Alliance life Insurance

Bajaj Alliance Life Insurance has 3 plans in Term insurance, they are iSecure,
New Risk Care II and Term Care all of which are plain vanilla term insurance.
Out of these 3 plans iSecure has a better option when one compares the sum
assured, maturity age and accessibility.
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HDFC Standard Life

HDFC Standard Life has 3 plans under level term plan. Click 2 Protect is available
online. The HDFC protection loan is to insure the family from home loan in case
of any unfortunate demise.
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ICICI Prudential
ICICI Prudential has 7 plans in term insurance of which five are level term plans,
one return of premium term plan and one home loan term plan.

The home loan term plan is to insure policyholders family from home loan
liability in case of anything unfortunate happens to policyholder.

ICICI iCare is only term plan available online.

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ING Vysya Life Insurance

ING Vysya has two plans in term insurance segment. The difference between
plans is with respect to sum assured and return of premium
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Life Insurance Cooperation

LIC has 4 plans all are level term plans. No online facility is available
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MAX Life Insurance

Max Life has two term plans one level term and other premium return.
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Met Life India

Met Life provides 5 types of term plan in which there are 3 level term plans, one
return of premium and one home loan term plan. Protect Plan is an online
product.
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KOTAK Mahindra
Kotak offers 6 term plans, 5 are level term plans and one is micro insurance term
plan. E-Term and e-Term preferred are online products.
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SBI Life Insurance

SBI has two income term plan, two level term plan and one return of premium.
All plans are offline.
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Reliance Life Insurance

Reliance Life has 5 term plans.3 level term plans and two loan recovery loans.
E-Term Plan is online product.
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Aviva Life Insurance

Aviva Life Insurance has 6 tem plans, 5 of the Level Term Plan and one return of
premium.
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Conclusion:
Term Insurance plan is one of the critical investments in persons life. While
choosing a term insurance plan an individual has to consider his Age, family
income, dependents, liabilities and time period of cover. There are more than 100
term plan available in the market.

While choosing a term plan it is preferred to choose plain vanilla term plan and
online as you get more sum assured and longer coverage time with minimum
amount of money. As the term plan is not an investment for future but it is a
product which helps your family when you are no longer there to protect them
financially.

There is one plan which is unique term plan, and worth considering:

LIC Two year temporary assurance policy: is designed to insure

policyholder, who wants risk cover for a maximum of two years.