The cheapest term life insurance

[Chawanni]

I often advice people not to combine insurance and investment and the
only insurance product which offers such a possibility is term life
insurance.
First let's try to find out what's term life insurance. Wikipedia has
a very good definition for it http://en.wikipedia.org/wiki/Term_life_insurance.
In simple, term life insurance provides you only insurance and you
don't get anything at the end of policy term ( on survival ). Hence
those who opt for it treat insurance as a cost ( or expense ) rather
than an investment.

Recently I came across this page on the personalfn website
http://www.personalfn.com/insurance/termplan.html . This page lists
down the premium charged by different life insurance companies in
India for term life insurance. As you would notice the lowest premium
is charged by SBI Life Insurance ( which is owned 74% by the State
Bank of India ).

An year back, when I was evaluating Indian Life Insurance companies to
purchase a term insurance plan, I had chosen SBI Life. In hindsight,
that looks like an intelligent decision.
To be precise, I had bought the option under which the "Sum assured
increases by 5% annually" so that the Sum assured can atleast keep
pace with inflation. But after I had purchased this policy I got a
shocker. The 5% increase per annum is not compounded as I had thought,
but is rather caluclated as simple interest on the original sum
assured. Still SBI Life Shield looks the best that is on offer
presently, since no other Inusrance company offers this facility of
increase in Sum assured annually.

Disclosure: I am not associated with SBI Life in any way, except for
the fact that I have purchased SBI Life Shield, their term insurance
plan last year. If you are aware of any other Life insurance company
offering a lower premium for term insurance in India, please do
comment and I will update this post accordingly.

The original article can be found here:
http://chawanni.blogspot.com/2009/01/cheapest-term-life-insurance.html