SBI Life launches an online term plan

MUMBAI: Private life insurer SBI Life has recently announced the launch of its new online term plan eShield. It is a pure protection policy, where the proceeds are handed over to the policyholders' nominees in case of their death.

The product comes with two plan options - level cover and increasing cover. It also offers the option of adding the accidental death rider benefit to these two plans. While the chosen sum assured stays constant throughout the policy tenure under level cover, it increases at regular intervals in case of the latter. The basic sum assured under increasing cover will go up at the rate of 10% simple interest after every fifth policy year. However, the premium will not be hiked.

Accidental death benefit, as the name suggests, will come into the picture if the policyholder dies in an accident. This cover amount will be equal to the basic sum assured or Rs 50 lakh, whichever is lower.

Like other online term plans in the market, this product, too charges a lower premium compared to its offline counterpart. For instance, a 25-year-old, non-smoker male choosing the level term cover and a policy term of 20 yeas will have to pay an annual premium of Rs 6,360 for a Rs 1-crore cover under eShield. On the other hand, the same individual will have to pay Rs 10,158 for SBIBSE -0.58 % Life's other term product Smart Shield, all other parameters remaining the same. Also, additional discounts are offered to women and non-smokers.

Upside: Term policies are considered the ideal protection covers as they safeguard your family's financial interests at a minimal cost. The product structure, too, is simple to understand. And, the premium goes down further in case of online term policies.

Downside: The minimum sum assured under the policy is Rs 20 lakh, which means that those with a lower life cover requirement will not be able to buy this product

 TOUHID HUSSAIN 

PGDM 2nd SEM