The statement, “Your family means the world to you”, is true irrespective where you live and what you do for a living. We all strive hard to offer them comfort, security, and happiness. But life is full of uncertainties and it is financially wise to provide for them. One such financial product that every working individual, with a dependent family, should opt for is a Term Insurance plan.

Among the plethora of term insurance plans currently available (with their variants), in today’s issue we have decided to evaluate the protection plans (term insurance) offered by Birla Sun Life Insurance (BSLI).

BSLI offers 3 plans under the protection plan category:
 

1. Protect@Ease Plan: It is a traditional online term insurance plan. The plan offers an option to enhance the sum assured by 5% simple p.a. or 10% simple p.a. at inception depending upon one’s needs. On every policy anniversary, the sum assured will increase by 5% or 10% of the initial sum assured without any increase in the premium amount. It also provides an option to jointly cover one’s spouse in the same policy and enhance one’s cover at key milestones in one’s life. It provides built-in terminal illness benefit.

Here’s how the aforesaid plan differs from the existing plans offered by BSLI —BSLI Protector Plus Plan and BSLI Future Guard Plan
 

2. BSLI Protection Plus Plan: It is a traditional life insurance plan. The plan offers an option to enhance the sum assured by 5% simple p.a. or 10% simple p.a. at inception depending upon one’s needs. On every policy anniversary, the sum assured will increase by 5% or 10% of the initial sum assured without any increase in the premium amount. The plan also offers a built in Total and Permanent Disability (TPD) cover.
    
3. BSLI Future Guard Plan: It is a traditional non-participating life insurance plan offering “return of premium” option.

To make it simpler to understand here is a comparative table, to understand these plans…
 

An overview of Birla Sun Life Insurance's Protection Solutions
Parameters	Protection Plus Plan	Future Guard Plan	Protect@Ease Plan
Objective	Traditional term life insurance plan. Option of increasing sum assured with an in built Total and Permanent Disability (TPD) cover.	Traditional non-participating life insurance plan with return of premium option on maturity.	A traditional online term insurance plan with an inbuilt terminal illness benefit.
Entry Age	18 to 65 years	18 to 65 years	18 to 65 years
Policy Term	5 years to 30 years; subject to maximum age of 70 years	10 years to 30 years; subject to maximum age of 75 years	5 to 40 years; subject to maximum age of 80 years
Plan options	Option 1: Level sum assured Option 2: Increasing sum assured	Plan A:  100% return of your premiums paid Plan B: 110% to 150% return of your premiums paid depending on your policy term	Option 1: Level sum assured Option 2: Increasing sum assured
Sum Assured	Minimum: Rs 30,00,000 Maximum: No limit	Minimum: Rs 5,00,000 Maximum: No limit	Minimum: Rs 30,00,000 Maximum: No limit
Premium payment term	Regular pay	Regular pay	Single pay; limited pay - 5 to 7 years; regular pay
Premium payment mode	Monthly, quarterly, half yearly and yearly	Monthly, quarterly, half yearly and yearly	Monthly or yearly
Riders	1) Accidental death and disability rider 2) Critical illness rider 3) Surgical care rider 4) Hospital care rider 5) Waiver of premium rider 6) Accidental death benefit rider plus	1) Accidental death and disability rider 2) Critical illness rider 3) Surgical care rider 4) Hospital care rider 5) Waiver of premium rider 6) Accidental death benefit rider plus	1) Accidental death and disability rider 2) Critical illness rider 3) Surgical care rider 4) Hospital care rider 5) Waiver of premium rider 6) Accidental death benefit rider plus
Total and Permanent Disability (TPD) benefit	50% of the sum assured at inception subject to a maximum of Rs 50,00,000 will be paid to the life insured.	No TPD benefit under this plan	No TPD benefit under this plan
Joint Life protection option	No joint life protection option under this plan	No joint life protection option under this plan	Option to cover spouse under the same plan. The sum assured applicable for the spouse shall be equal to 50% of primary life insured's sum assured. This option shall only be available where the sum assured of primary life insured is greater than or equal to Rs 60,00,000.
Enhanced life stage protection	No enhanced life stage protection benefit available under this plan	No enhanced life stage protection benefit available under this plan	This feature is available only for: 1) Level term assurance option and 2) Regular pay policy and 3) The attained age of life insured is less than or equal to 50 years while exercising this option. This option is not available if Joint Life Protection is opted. 1) In case of first marriage - Enhanced protection of 50% of sum assured at the inception of policy (subject to a maximum of Rs 50,00,000) 2) Birth of first child - Enhanced protection of 25% of sum assured at the inception of policy (subject to a maximum of Rs 25,00,000) 3) Birth of second child - Enhanced protection of 25% of sum assured at the inception of policy (subject to a maximum of Rs 25,00,000)
Death benefit	It will be higher of: 1) 10 times of annualised premium 2) 105% of all the premiums paid as on the date of death 3) Sum assured at the time of death	It will be higher of: 1) 10 times of annualised premium 2) 105% of all the premiums paid as on the date of death 3) Sum assured at the time of death or Maturity sum assured	For regular and limited pay: It will be the higher of: 1) 10 times of annualised premium 2) 105% of all the premiums paid as on the date of death 3) Sum assured at the time of death For single pay: It will be the higher of: 1) 125% of single premium for all ages 2) Minimum guaranteed sum assured on maturity; or 3) Absolute amount assured to be paid on death
Option of receiving the death benefit by the nominee	1) Lump sum payment or 2) Staggered payment	Lump sum payment	1) Lump sum payment or 2) Staggered payment
Maturity Benefit	No maturity benefit under this plan	Plan A:  100% return of your premiums paid Plan B: 110% to 150% return of your premiums paid depending on your policy term	No maturity benefit under this plan
Surrender Benefit	No surrender benefit under this plan	The policy will acquire a surrender value after all due premiums for at least three full policy years are paid.	No surrender benefit under this plan
Policy Loan	No option to avail policy loan under this plan	No option to avail policy loan under this plan	No option to avail policy loan under this plan

Note: The table is for illustration purpose only
(Source: Product Brochures of all the three plans)

According to BSLI's life insurance calculator, the annual regular pay premiums for a non-smoking male aged 34 years for a sum assured of Rs 1 crore for a policy term of 30 years under different plans are as follows:
 

Sum Assured Option	Annual Premium (Rs) (inclusive of taxes) (excluding premium for riders) (rounded off)
Level term assurance	11,724
Increasing sum assured—5% increasing level	18,952
Increasing sum assured—10% increasing level	26,203

Note: The table is for illustration purpose only
(Source: BSLI Online term plan premium calculator)

To Conclude…

The premiums offered by BSLI are competitive vis-à-vis other term insurance plans offered by other life insurance companies. Avoid purchasing a return of premium policy. The returns are paltry when you compare it with the time horizon. Always go for a pure term insurance plan with lump sum payment on death of the life insured.

The amount of premium should not be the only criteria to choose the insurer. Make sure to look at crucial factors such as operational years of the company, claim assistance of the company, the number of branches of the company, customer service, methods of paying the premiums etc. before you pick an insurer.

The recent amendment to Section 45 of the Insurance Act, 1938 makes it mandatory for all life insurance companies, operating in India, to settle all death claims (irrespective of mis-representation or mis-statement) after 3 years of the policy being in effect. This amendment reduces the importance of the claim settlement ratio, as one of the parameters that individuals use to choose the life insurance company.

Also, make sure you evaluate your needs and don't mix investments with insurance. They are best kept separate. While you evaluate your needs, make sure to use scientific measures on human life value to calculate the amount of insurance you would require before signing on the dotted line.

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