A life insurance plan ensures your loved ones do not struggle to meet fundamental financial needs in case of your untimely death. It is an investment for your family’s security and a hassle-free future, where you pay premiums to avail the benefits. In a typical Indian household, where many rely on a single income, this can be an ideal investment. This monetary support can pay the bills, education, loan payments, and long-term goals such as retirement.

There are many types of life insurance plans, depending on personal needs and goals.

 

?       Term Insurance – offers high life cover with a low premium for a few years.

?       Endowment Plans – savings plus protection with maturity benefits.

?       ULIPs – insurance where part of the premium is invested in market instruments.

?       Whole Life Plans – coverage for the whole life.

?       Child and Retirement Plans – to save money for significant milestones such as education or retirement.

 

Of these options, term insurance is the most often selected by people who prefer to prioritise protection over an investment.

Term insurance is a simple way to get high coverage at an affordable price. It offers financial security to your family if you are not there to support them.

 

Premium insurers like Axis Max Life Insurance offer term plans that cater to specific needs, such as alternative income, debt protection, or securing your child’s future. The focus here is on providing enough protection without paying for extra features that may not be needed.

If you are planning to buy a term insurance plan in India, the steps below can help:

You will need to calculate how much coverage you will need to take care of the basic expenses and accommodate all your family's future goals.

?       Monthly expenditures

?       Educational expenses

?       Loan payments

?       Contingency funds

 

 

 

This table gives all of you an initial income basis to help you choose an approximate amount of life cover protection.

Choose a good period for years that your family are reliant on your income. This usually covers the number of years to pay a loan, length of time to raise a child or until retirement. If a person is in their early 30s with a still outstanding 25-year home loan, for instance, then a 30-year term policy may have many advantages to them. Taking out life cover for the time when they are most financially vulnerable is something to consider.

Before purchasing a term insurance plan in India, check the claim settlement ratios for any insurer. For instance, Axis Max Life Insurance has a claim settlement ratio of 99.70% for the year, according to the IRDAI report. That is a compelling number and indicates a strong track record of handling claims. Along with claim settlement ratios, you should compare policy features, rider options, and service standards.

You have the option to include riders such as critical illness coverage, accidental death benefit, or permanent disability coverage. Riders can deliver enhanced protection and are worth investigating based on your lifestyle and medical history. For instance, if you are in a physically demanding job, a permanent disability rider could be useful, while others may opt for critical illness as protection from risk to your health.

 

Most insurers will enable policy purchases online, which is convenient. However, it is crucial to read the entire insurance policy document before your purchase. You should know what it includes, what it excludes, and how to submit a claim. Do not limit your review to the summary pages only.

People often unknowingly do the wrong things when buying life insurance. Here are a few:

 

?       Under-insuring - Don't opt for lower cover just because it is cheaper! Ignoring riders - Sometimes, a little extra cover for accidents or illness is worthwhile.

?       Leaving out medical details - It is important that you provide the right health and lifestyle information.

?       Delaying your purchase - The younger you are when you buy life insurance, the lower the premium will be.

The sooner, the better. Young people are regularly purchasing substantial coverage with minimal premiums, but as you make commitments to dependents or loans, this becomes increasingly important. The sooner you plan, the less it will cost to secure your family's future.

 

The sooner you purchase the coverage, the longer you can enjoy long-term coverage without concern for medical eligibility in future years and the medical implications associated with it.

The old tax system allows, under section 80C (only under the old tax regime), for a deduction on premiums paid up to ?1.5 lakh. The payout you receive from your family is usually not taxable under section 10(10D).

 

 

Claim - If the life insured dies during the policy term, the nominee must immediately inform the insurance company to claim the benefits. They will need to submit documents, including the death certificate, identification proof, and policy documents. Follow up periodically until the claim is settled.

Life insurance provides your family with peace of mind and financial security. This is an investment that you make, not focusing on returns but security towards your loved ones.