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The options for those looking to fulfill insurance needs on their own are widening. Kotak Mahindra Old Mutual Life Insurance launched its online term insurance product this month. As the company doesn't incur expenses to reach out to a customer to sell the product, including the agent's commission, it is priced 10% cheaper than the term insurance cover available through the company's agents and distributors.

The buying procedure is almost similar to the rest of the online products namely ICICI Prudential Life Insurance's iProtect Term Insurance and Aegon Religare Life Insurance's iTerm plan. While ICICI Prudential and Aegon Religare Life Insurance offer only yearly options of payment, Kotak has monthly, quarterly, halfyearly and yearly options of payment. The maximum age at maturity under ICICI Prudential's iProtect is 75 years, 65 years under Aegon Religare's iTerm, but 70 years under Kotak Life's e-insurance.

The company also offers a facility of tele-underwriting wherein customers are asked questions and in case answers are satisfactory, then no medical tests are required. For sum assured of 30 lakh, no tests or tele-underwriting is applicable. If you need medical tests, you will have to go to the hospital to get the tests done. Rest of the documents are picked up from your residence.

Though Kotak Life and ICICI Prudential offer a maximum term of 30 years, Aegon Religare Life offers a maximum term of 25 years. The premium for the lower term is higher for Aegon Religare than the other two players in the non-smoker category. But is lower than the Kotak premium in case of a nonsmoker. Aegon Religare does not distinguish between a smoker and a nonsmoking female, while deciding the premium. Kotak Life actually prices premium for smokers higher than any of the online players.

Unique Option:

One feature offered here is the step-up life cover, where you are in a position to pay higher premium and realise you need a higher sum assured, you can opt for it. However, there are charges for taking the step-up option, which is dependent on the premium and the term. In case the policy is taken for less than 15 years, then you have to pay 3% of the basic premium, while 5% of the basic premium is levied in case the term is above 15 years. No medical tests are required if you opt for the step-up option.

Why Go For It?:

If you are a non-smoking woman, then the online term cover of Kotak Life is the cheapest in the market.

Why Not?:

The policy pegs risk for smoking customers much higher than other similar options. Premium for smoking men and women is higher by 7-26% vis-à-vis other players.

Source: The Economic Times