Introduction
In principle, term insurance comparisons should be relatively straightforward. It’s a commodity after all. The insurance company is expected to pay a certain sum to the nominees in the event the policyholder passes away. And there isn’t any room for confusion either since death is final in most cases. However, in reality, it can be extremely complicated considering the number of life insurance companies plying their trade in India and the variety of features and add-ons they market alongside their term insurance product.
So to fully understand the difference between two term insurance products we have to be nuanced in our approach and we have to set some ground rules.
For starters, both policies, Click2Protect Life and iProtect Smart are marketed by different insurance companies. Click2Protect Life is marketed by HDFC Life and iProtect Smart is marketed by ICICI Prudential. So even before we compare the products, we must evaluate the insurers first.
Second, we have to look at pricing. Unfortunately, we cannot capture this data fully considering the final price can depend on many factors including your age, location, smoking habits etc. This means we are limiting our comparison in some ways and it isn’t a perfect evaluation.
Finally, it’s important to talk to an actual advisor before you make up your mind. So we recommend booking a call with us before you go ahead.
And with that introduction out of the way, we can get to comparing the actual policies themselves.
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Compare Insurances Insurance Parameters |  | |
|---|---|---|
| Claim Settlement Ratio (avg. of last 3 years) | 99.2% | 97.5% |
| Amount Settlement Ratio (avg. of last 3 years) | 87.3% | 92.1% |
| Annual Business | ₹27,490 Cr. | ₹17,198 Cr. |
| Complaints per 10,000 claims settled (avg. of last 3 years) | 2 | 14.3 |
| Zero Cost Option | ||
| Waiver of Premium | Available (Both Critical Illness and Permanent Disability) | Available (Only on Permanent Disability) |
| Accidental Death Benefit | ||
| Total Permanent Disability | ||
| Terminal Illness | ||
| Increasing Cover | ||
| Cover amount Top-up |
Insurer Comparison
Claim settlement ratio is perhaps the most important metric to look considering it tells you how many claims an insurance company pays out for every 100 claims they receive. When you average the claim settlement numbers for 3 years and express it as a percentage, you will see that HDFC Life has a claim settlement ratio of 99.2%, which we believe is a fairly good number. And HDFC Life has a claim settlement ratio of 97.52% which is slightly above average. So on this front, HDFC Life slightly edges ICICI Prudential.
Sometimes you can’t just look at the claim settlement ratio because it can be misleading. For instance, imagine 9 people make claims worth 1 crore each and the 10th person makes a claim totalling 5 crores. The company can simply pay out the smaller claims of 1 crore each and deny the bigger 5 crore claim and still maintain a claim settlement ratio of 90%. So you will need to look at the total amount settled as a percentage of the total value claimed. And when you average this number for 3 years and express it as a percentage, you will see that ICICI Prudential has an amount settlement ratio of 92.1%, which we believe is a fairly good number and HDFC Life has an amount settlement ratio of 87.3% which is slightly above average. ICICI Prudential slightly edges HDFC Life here.
While it’s important to look at the claim and amount settlement ratios, it’s also important to look at the scale of business. Because truth be told, it’s very easy to post 90%+ settlement numbers when you are selling only a few thousand policies and garnering a few hundred crores in premiums as opposed to putting up the same performance while selling hundreds of thousands of policies doing tens of thousands of crores in new business. So it’s important to look at the scale of the business. And when you consider total premiums generated across the last three years and average it across, you will see that HDFC Life has generated new business premiums worth ₹27,490 Crore and ICICI Prudential has garnered new business worth ₹17,198 Crore. This tells you that both companies operate at a massive scale, even though there’s a slight difference.
HDFC Life received 2 complaints while ICICI Prudential received 14.3 complaints for every 10,000 claims registered. You also need to know that HDFC Life’s numbers are considered very good based on industry standards, while ICICI Prudential’s numbers are below average.
Feature Comparison
If you’re ever diagnosed with a debilitating illness, you would want your insurance policy to pay a fixed sum so that you can deal with any monetary obligations you may have. This is called a critical illness benefit. And with the two policies in question, it seems both extend pretty good critical illness riders. However in both cases the payout is subject to several conditions, and payment of an extra premium.
Payouts for critical illnesses aren’t made immediately. Instead, most policies expect you to survive for a certain duration before they make the payment. In this case, however, iProtect Smart will initiate the payment immediately after the diagnosis is confirmed while Click2Protect Life will initiate the payment 30 days after the diagnosis is confirmed.
Some policies will pay out the critical illness (CI) benefit from the total term cover available (Accelerated payout) while also offering you the option to avail it on top of the total term cover available. In this case, however, iProtect Smart makes the payout from the total cover available, by carving out a small portion from your corpus, while Click2Protect Life will pay out the critical illness benefit on top of the total term cover available, offering you a little extra security. So if both policies were selling this option at the same price, iProtect Smart would be a better alternative here. However, if there’s an additional cost involved while picking iProtect Smart, Click2Protect Life would be a better choice in our opinion.
Most policies impose a waiting period before they make the Critical Illness Benefit available. And in this case, both policies impose 180 days waiting periods before making the benefit available to retail policyholders.
Some insurers will return all your premiums if you forego your policy before maturity, during a period specified by the insurer. In essence, you get all your premiums back, while also being protected under the term plan during this time. And it seems iProtect Smart extends a zero-cost option, while Click2Protect Life doesn’t offer this benefit.
Click2Protect Life waives off all future premium payments if you are ever disabled (in an accident) or diagnosed with certain critical illnesses, while iProtect Smart only waives off all future premium payments if you’re disabled (in an accident).
Some policies offer you the option of adding extra protection for accidental deaths. In which case, you get the option of choosing your death and accidental death cover separately. And while we recommend customers choose a comprehensive cover without worrying about the specifics of death precisely, you should find comfort in the fact that both policies extend this option anyway.
Total Permanent Disability
Some policies offer you a monthly income or a large lumpsum in the event you are disabled totally for life. However, it seems only Click2Protect Life extends this option.
Some policies will disburse the entire cover amount the moment you are diagnosed with a terminal illness. So even in the absence of death, you can still get the money and use it any way you wish. In this case however, iProtect Smart extends this benefit while Click2Protect Life doesn’t.
Final Conclusion
After evaluating the insurer’s profile, their claim settlement numbers and the individual policy features, we believe iProtect Smart is a clearly better alternative when compared to Click2Protect Life.