|
|
 |
|
|
LIC term cover set to get cheaper by Bima deals
|
|
|
LIC term cover set to get cheaper |
|
|
|
|
|
Insurance
|
|
|
The country’s largest insurer, Life Insurance Corporation of India, plans to reduce its term insurance rates. Term insurance policies refer to those covers where the insurance company makes a payout only upon the death of the insured. “We are in the process of reviewing our rates and will do so after this financial year,” said D K Mehrotra, LIC chairman. He added that although LIC’s rates for term insurance are higher than that of private insurers, the corporation has a much better track record in claim settlement. According to Mehrotra, there is a big increase in the awareness for life insurance protection. Apart from competition, the awareness has been generated because middle-class buyers with loans want to ensure that their liabilities are taken care of. At present, a 30-year-old who purchases a 25-year LIC term cover pays Rs 14,600 annually for a cover of Rs 50 lakh. This is much higher than the premium charged by private life insurance companies which are in some cases up to 40% cheaper. Several companies offer much cheaper cover online. However, LIC officials say that the corporation has a better track record in claim settlements. They also point out that term insurance rates cannot be compared directly because in high value policies the actual premium would depend on medical underwriting and the parameters for “normal” rates vary across insurers. The rates for term insurance are revised periodically after reviewing changes in life expectancy of the insured population. As life expectancy has been rising because of medical advances, the cost of cover has been constantly declining and are in some cases a fourth of what they were at the time of opening up of the life industry in 2000. While rates are expected to keep declining until life expectancy rises to 85-the highest level of life expectancy-prospective buyers cannot wait. This is because prices rise with the age of entry. According to the IRDA’s annual report, the claim settlement ratio of LIC was better than that of the private life insurers. Settlement ratio of LIC increased to 97.03% in 2010-11 as compared to 89.04% for private life insurers. Similarly, LIC had a low rejection rate of 1% as compared to 8.90% for private insurers. In absolute terms, private life companies rejected 9,966 claims, while LIC had rejected 7, 384 claims despite having a much larger share of business than private insurers. A senior LIC official said that claims are typically rejected if any material fact which would have impacted the insurer’s decision on pricing would have been withheld or mis-represented. In the case of LIC such claims are settled on an ex-gratia basis if the misrepresentation is not related to the cause of death.LIC NAV
Related Articles -
Life Insurance, LIC, LIC Policy,
|
Rate This Article  |
|
|
|
|
|
Do you Agree or Disagree? Have a Comment? POST IT!
| Reader Opinions |
|
|
|
|
|
|
|
|
|
| Author Login |
|
|
 |
Advertiser Login
ADVERTISE HERE NOW!
Limited Time $60 Offer!
90 Days-1.5 Million Views
|
|
TIM FAY
After 60-plus years of living, I am just trying to pass down some of the information that I have lea...more
|
|
|
|
|
LAURA JEEVES
At LeadGenerators, we specialise in content-led Online Marketing Strategies for our clients in the t...more
|
|
|
|
|
ALEX BELSEY
I am the editor of QUAY Magazine, a B2B publication based in the South West of the UK. I am also the...more
|
|
|
|
|
GENE MYERS
Author of four books and two screenplays; frequent magazine contributor. I have four other books "in...more
|
|
|
|
|
SUSAN FRIESEN
Located in the lower mainland of B.C., Susan Friesen is a visionary brand strategist, entrepreneur, ...more
|
|
|
|
|
STEPHEN BYE
Steve Bye is currently a fiction writer, who published his first novel, ‘Looking Forward Through the...more
|
|
|
|
|
SHALINI MITTAL
A postgraduate in Fashion Technology. Shalini is a writer at heart! Writing for her is an expression...more
|
|
|
|
|
ADRIAN JOELE
I have been involved in nutrition and weight management for over 12 years and I like to share my kn...more
|
|
|
|
|
JAMES KENNY
James is a Research Enthusiast that focuses on the understanding of how things work and can be impro...more
|
|
|
|
