Let’s face this we only die once and if we die with the wrong amount of life insurance there’s no-due over then our family will suffer. No one can replace, a father, a mother, a husband or a wife, what life insurance can do though is replacing the economic value of a human life. So, what’s your life worth economically to your family?

Not sure…..

Then answer this if I want to give you money right now for the full death benefit of all the life insurance you own would you agree to work the rest of your life for No Pay

If your answer is No way then probably you don’t have enough coverage, if you’re saying give me cash now well then maybe you maybe have enough

Getting the right amount is critical once an individual knows how much he wants then what kind of life insurance does he need?

There are many different types of life insurance available

A term, Life Endowment, Variable life, Unit Linked, Permanent life, Permanent par life, Permanent Long par life, Universal Life, Whole life, Maximum protection policy, Investment Plans, Convertible term life, Cash life value with profit bonds and not forgetting off course Return on Premium policy …Confused Yet

Well, there is no need to panic, life insurance products offer protection which can be temporary or permanent as well as structured savings and investment plans (Which are optional).

1. Term Life Insurance (Temporary life Insurance):

Certainly most affordable i.e. least expensive. It covers a person for a specific period of time, usually 1 to 30 years. Premium of term life insurance policy depends on an individual age, how much coverage required and policy term.

2. Permanent or whole Life insurance:

Whole life insurance give financial protection against your death throughout your entire life. It offers more protection and Peace of mind because it doesn’t run out. In addition to protection, insurance policies can include a way for you to save every month through your premiums.

3. Endowment Insurance:

It offers financial protection for your loved ones for a specified period of time and pays out guaranteed lump sum amount once a contract ends

For instance: if you saving for your college fund or putting away for your retirement an endowment insurance policy can pay-out the agreed amount when you reach 60 but if you die before that your loved ones receive the full amount you’re insured for. This way no matter what happens to you your savings are protected

4. Investment-linked life insurance:

It uses some of your premium to purchase units in funds. The value of policy is therefore in part determined by the performance of these investments, if your investments work well, the value of your policy is increase and vice versa. However the sum your family will receives upon your death is exactly the sum you agreed in the policy and is not affected by the fund’s performance.

Now the question is how to choose the best life Insurance plan.

To decide which Insurance plan to go for, consider the following factors:

1. Claim Settlement Ratio:

CSR is the number of claims settled by a life insurance company for every 100 claims received by it in a year.

Above data is as per the IRDAI website

2. Premium:

Compare the premiums of term insurance plans with similar features and evaluate which one offers you more value for money.

3. Tenure:

Maximum tenure of the plan that will cover for than 40 years

For instance: TotalSecure+ from Edelweiss Tokio offers a maximum plan tenure of 62 years. This can cover you well beyond your retirement age of 60 years up to a maximum age of 80 years.

4. Claim Pay-out Option:

Measure all the different kind of pay out option offered under various term plans and choose the one that suits your requirement

For instance: Max life have 3 plans to claim

a. Basic life cover: 100% of the sum assured is paid on death

b. Basic life cover + Level monthly income: 100% of the sum assured is paid on death + 0.4% of the sum assured is paid per month, for 10 years

c. Basic Life cover + increasing monthly income: 100% of the sum assured is paid on death + increasing monthly income is paid for 10 years.

5. Variants of the plan:

Term insurance plans of some companies are offered in various variants giving flexibility to the person to choose the variants that suit their requirement.

Suggestion: Before any Individual purchase a particular insurance policy, make sure to compare plans either via the official websites of insurers or through trusted third-party insurance websites and choose one that gives you optimum coverage and meets your exact needs.

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