27th April 2025, Gaurav Kumar Singh
Buying term insurance is one of the smartest financial decisions you can make for your family’s future. But with so many insurers, plans, and features available today, it’s easy to get confused.
Don’t worry — we’ve got your back!
Here’s a simple yet comprehensive checklist to help you compare term insurance plans and choose the one that’s right for you.
1. Coverage Amount (Sum Assured)
Ask yourself:
How much will my family need if I’m not around?
A good rule of thumb:
• 10–15 times your annual income, or
• Enough to cover outstanding loans, family’s monthly expenses, and major future goals (kids’ education, marriage, etc.)
For example, if your annual income is ₹10 lakhs, aim for ₹1 to ₹1.5 crore cover.
2. Policy Tenure
Tip: Cover yourself at least till your retirement age (60–65 years).
This ensures your family is protected during your most financially active years.
Also, if you plan to retire early or have major financial goals by 50, choose a tenure accordingly.
3. Premium Amount
Term insurance is affordable, but premiums vary across insurers even for the same coverage.
What to check:
• Compare the annual premium for the same sum assured and tenure.
• Choose a plan that balances cost with features — the cheapest isn’t always the best!
Pro tip: Buy early — the younger and healthier you are, the lower your premium.
4. Claim Settlement Ratio (CSR)
This shows how many claims an insurer pays out of 100.
A high CSR (above 95%) means the insurer is reliable and settles most claims.
Example (as per IRDAI Annual Report 2023–24):
• LIC: ~98.5%
• Max Life: ~99.5%
• HDFC Life: ~99.3%
Always check the latest CSR from the IRDAI website.
5. Payout Options
Choose how your family will receive the money:
• Lump sum: The Entire amount at once
• Monthly income: Fixed payout every month
• Combination: Part lump sum + part monthly income
This helps avoid misuse of a large lump sum and ensures regular income for your family.
6. Riders (Add-Ons)
Enhance your coverage with optional riders, such as:
• Critical Illness Rider: Lump sum payout on diagnosis of illnesses like cancer or heart disease
• Accidental Death Benefit Rider: Extra payout if death occurs due to an accident
• Waiver of Premium Rider: If you become disabled or critically ill, future premiums are waived, but coverage continues
Note: Riders increase the premium slightly, but they provide extra protection.
7. Claim Process Simplicity
In a crisis, your family shouldn’t struggle with paperwork.
Check:
• Is the claim process online or offline?
• Is a dedicated claim support team available?
• Are there any hidden conditions?
Read real user reviews on PolicyBazaar, Google Reviews, or the IRDAI grievance portal.
8. Medical Tests and Underwriting
Some insurers ask for medical tests, especially if:
• You are above 35 or 40 years old
• You are a smoker
• You are opting for high coverage (₹1 crore+)
Don’t avoid medicals. In fact, policies issued after proper tests are more reliable at claim time.
9. Premium Payment Options
Choose what suits your budget:
• Annual (once a year)
• Monthly/Quarterly (smaller payments)
• Limited Pay (pay premiums for 10–15 years, get cover till 60+)
Limited pay is useful to finish paying before retirement or job changes.
10. Online vs Offline Purchase
Online term plans are usually:
• Cheaper
• Quicker to issue
• Easier to compare
Buying online directly from the insurer or via trusted aggregators like PolicyBazaar, Coverfox, etc., also helps in comparing multiple plans in one place.
Term Plan Vs Endowment Plan. Which is better for you?
Quick Comparison Table Format
You can use a table like this when comparing:
| Feature | Plan-A | Plan-B | Plan-C |
| Sum Assured | ₹1 crore | ₹1 crore | ₹1 crore |
| Tenure | 35 years | 30 years | 40 years |
| Annual Premium | ₹9,500 | ₹10,200 | ₹8,800 |
| CSR | 99.3% | 98.5% | 99.0% |
| Riders Available | (CI + ADB) | Only ADB | CI + Waiver |
| Claim Process Reviews | 4.5 stars | 4.1 stars | 4.7 stars |
| Payout Option Flexibility | Yes | No | Yes |
Final Words: Don’t Overthink. Just Start.
Buying a term plan isn’t about predicting death — it’s about protecting life. Use this checklist, compare smartly, and get covered as soon as possible.
Your family will thank you — even if they never need to use it.
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THE MIND UPGRADE 