Key Points:

Lack of Term Plan Promotion: - Websites like "Sabse Pehle Life Insurance" do not prominently advertise term life insurance. It's often hidden in glossaries. - IRDAI’s regulatory efforts have yet to make term plans a mainstream focus for insurers.

Consumer Behavior: - Indian consumers generally prefer insurance plans with returns (e.g., ULIPs, endowment plans). - Without guaranteed returns, term insurance appears less appealing despite its cost-effectiveness.

Profitability for Insurers: - VONB Margins (Value of New Business): - Term Plans: 50% - ULIPs: ~10% - Endowment/Par Plans: 12-15% - While term plans are the most profitable long-term, they pose short-term liabilities due to higher payouts on claims.

Challenges in Selling Term Plans: - Insurers struggle to convince customers to invest in plans without direct monetary returns. - Cultural and behavioral hurdles persist, similar to the resistance in buying mandatory vehicle insurance.

Best Practices for Buying Term Insurance:

Avoid Return of Premium Plans: - They are costlier without significant added value.

Trusted Insurers: - Opt for reliable providers like SBI Life or ICICI Pru. They might not be the cheapest but offer credibility.

Buy Online: - Online plans are 15%-30% cheaper than offline policies.

Accurate Application: - Disclose lifestyle habits (smoking, drinking) honestly. - Ensure accurate medical details to avoid rejection or higher premiums.

Medical Tests: - Prepare for medical exams by avoiding heavy foods and alcohol 1-2 days before.

Riders and Add-ons: - Include accidental death and disability riders for comprehensive coverage.

Exclusions and Terms: - Review policy exclusions and opt for coverage until 65-70 years, avoiding plans that extend to 80-100 years.

Direct Purchase: - Buy directly from the insurer’s website, not through third-party sellers.

Personal Recommendations:

• Example Plan: SBI Life eShield Next (pure term plan without hybrid features).
• Caveats: Avoid hybrid products (e.g., life + mediclaim) as they are costlier and less efficient than standalone options.

Takeaway: Term insurance is highly beneficial but requires careful research and honest application. Stick to pure plans and reputable providers for the best outcomes.

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