Term Insurance

I acknowledge Money Purse YouTube channel for this post. 

By considering the following key points, you can make an informed decision when selecting a Term insurance policy that aligns with your financial goals and provides comprehensive coverage for your family's future.  

1. Optimal Sum Assured Calculation:

Calculate the sum assured based on the remaining years of earning potential or anticipated expenses. For example, if you're 34 with a potential earning span of 26 years, ensure the sum assured covers the total anticipated earnings or expenses over that period.

2. Extended Tenure Consideration:

Choose a term insurance tenure that provide coverage up to 70-75 years only. This minimizes the risk of the nominee wishing for your demise to claim the insurance amount.

3. Regular Pay vs. Limited Period:

Opt for a regular pay option rather than a limited period, although total premium paid is less in limited period scheme. The additional amount in limited period payments can be strategically invested to yield additional benefits over time.

4. Married Woman Property (MWP) Form Submission:

Submit the Married Woman Property (MWP) form to safeguard the term insurance amount in case of debt at the time of death. This ensures that the insurance proceeds are not claimed by creditors, providing financial protection for your family.

5. Inclusive Riders:

Ensure the inclusion of riders such as accidental disability and critical illness benefits. These add-ons provide additional financial protection in the event of unforeseen circumstances, offering comprehensive coverage.

6. Informed Decision Through IRDA Annual Reports:

Download the annual reports from the Insurance Regulatory and Development Authority of India (IRDAI) website. Analyze historic data on claim settlement ratio, amount settlement ratio, claim rejection ratio, and solvency ratio of various insurance companies (Chapter 6: Statements). This information empowers you to make an informed decision based on the track record and reliability of the insurance providers.