What is a suitable Term Insurance plan I should buy?
Hi , Iam 39 years planning to purchase a Term insurance for coverage amount of Rs 3.30 crores with policy duration age upto 65 to 70 years. Also willing to customize the policy with monthly premium payment frequency , option for increasing cover , riders with separate sum insured and payout option of lump sum with monthly income. Interested to purchase the policy through online. Kindly suggest a suitable insurance scheme name with company details for purchasing the desired policy.
Have you considered any products online as of now? Could you share what's been your research till now. It will help to fill the gaps or answer any specific queries you may have from your product search and comparison.
Also, please share few more details-
- What is your family size? Spouse, kids?
- What is the nature of your profession. Where do you currently live.
- Do you have any liabilities such as car/home loans etc or are you planning to take a loan in the near future (5 yrs)
- What is your goal of buying term insurance?
BTW you can get a lot of insights on how to think about term life insurance in this ridiculously simple guide to term life insurance - https://www.beshak.org/term-insurance/e-book/buy-guide
Hi Anuj ji , initially I was inclined towards the brand only (LIC Tech Term). After knowing that every insurance company is legitimate & governed by IRDAI regulations , I was tilted from traditional brand to a insurance company with strong financials having more customized products and features than that of the traditional branded PSU company at the same cost. The identification of the financially strong company Iam getting confused. 1. Myself 39 yrs , spouse 38 yrs and two daughters 9 & 5 years.
2.Working for a Public Sector Bank & living in Thiruvananthapuram , Kerala.
3.Having liabilities of around 42.50 lakhs (Housing 35 L & Car loan of Rs 7.50 L)
4.My dependents are non earning family members & hence in need of a Financial security to them.
Hello Leo pold,
We do not recommend specific plan and company options at this point.
You need to shortlist insurance plans that suit your requirements for customization you have mentioned in your question.
From these shortlisted plans you can go for company you are comfortable with in the long term.
Term Life is a very simple policy - remember if you ensure all the declarations you make during the purchase are comprehensive and clear - every insurance company will pay your claim.
Also do check out the Term Insurance Guide: https://www.beshak.org/term-insurance/e-book/buy-guide
Mahavir Ji , Thank You for sharing the insight of Term Insurance which is very useful and I will ensure to declare all declarations properly during the purchase. The Term Insurance Guide is extremely useful.
Dear Leo Pold,
Term insurance is, really, is simplest and yet most important financial product. While I may not be able to recommend you on which product to buy, I have a few pointers that could help
- The duration should be in line with the time you intend to earn i.e. until retirement
- I wouldn't recommend the products which return on premiums on survival - they make the product expensive without much value add
There are host of factors to be considered in arriving the size of insurance cover. The good news is https://protectmewell.com/ has done all the heavy lifting and now you can find/validate size of your insurance cover including some of the riders in less than a minute. It is non-intrusive (i.e. doesn't ask for email id or phone no), unbiased, scientific and free for the time being!
I hope this helps. Happy to answer any follow-up questions
Sumit Ji , Thank You for sharing your valuable suggestions more specifically the duration (period of coverage) and product selection. I will follow it unfailingly. Visited the site and finalized the size of my insurance cover.
can I decrease the tenure of my term plan as I made a mistake by making it till age 85, what do you think?
Thanks for your reply Leo.
Mahavir and Sumit are experts in life insurance and they've provided their inputs.
Here's what I would have followed.
- There's the current liability of loans, plus there would be the need to protect the interests of children for their higher education and well being.
- You must ensure you are able to pay EMIs on time, so you should first cover yourself for short-term risks, such as health & accidents. Death is a lesser challenge, living face the greater risk. So I would suggest you (a) save an emergency fund for income shocks, and (b) have a decent health cover of 5 lakhs family floater which has 100% no-claim bonus and in-house claim processing. So you ensure you can pay EMIs.
- I am not sure what's your income, but you seem to be moderately leveraged. After solving for your expenses, savings and health insurance, just see what kind of money you can spare. I would prefer to look at the top 2 life insurers by premium for a term insurance plan. Yes you read it right. Most pvt insurers are fragile, so you don't want to stand on a weak table. Picking a life insurer with a strong balance sheet is important, and such insurers are expensive compared to market.
- As Sumit mentioned, pick a term plan for the duration that you would be earning. Ensure it has MWP option, which means the life claim money goes to your dependents and not to the banks in the event if something were to happen. And don't waste premium on riders. They have very low probability of adding any value.
- Lastly, but online directly from insurer, save yourself some premium and don't pay agent commission. Ensure that you provide accurate medical history at the time of proposal, and make sure that it is recorded in emails or on paper so that you have the track.
Once you have the policy, ensure that your family knows about your policy every time of renewal. Keep the first policy certificate safe, some strange rules exist in life insurance, which may need 1st policy copy in the event of a claim.
Do come back if you have any followup question and it would make me happy if you can share which product you will finally buy. Would make me knowledgeable to know your purchase journey.
Thank You Anuj ji for your exhaustive reply for making me very clear etc.
Finally I opted for Max Life Insurance Ltd with increasing cover and coverage upto 65 years. Ensured MWP option and included Waiver of Premium rider.
This is an amazing and well informative forum.