Why, what and how's of buying a Term Insurance

Hey everyone,

Just starting my financial journey. Amid all the talk of investments and portfolios, let’s not overlook the basic risk of uncertainty: death. It’s crucial to have insurance to protect against illnesses and death.

With epidemic claims rising, major insurers are increasing premiums. If you haven’t bought insurance yet, now’s the time. Here’s what I did and why:

  1. Term Insurance: Stick to plain term insurance. It covers early death risk of investment returns.
  2. When to Buy: Start early to lock in lower premiums for life.
  3. Coverage Amount: Aim for 10-15x your income. Consider options like an increasing cover for future needs.
  4. Policy Duration: Choose till retirement (60-65 years) to avoid steep premium hikes later.
  5. Payment Duration: Pay till maturity to avoid overpaying upfront.
  6. Riders: Skip unless critical. I opted for future premium waivers.

I chose Max Life’s plan with an increasing cover, paying annually. Act soon as premiums are set to rise. Hope this helps!

Thank you for sharing your ideas. It’s fantastic that you are starting your financial journey with an emphasis on insuring your future through insurance. Term insurance appears to be a good option for protecting against uncertainties such as illness and early death, especially given growing rates. I will absolutely consider starting early to lock in reduced premiums. I appreciate the advise.

Under IRDA, insurance businesses operate. If a company fails, IRDA assumes control and transfers the policies to another insurance provider. It won’t affect your policy. There are two potential exclusions. First of all, it is nearly impossible for multiple insurance firms to fail at the same time! Second, organizations like the IRD and RBI are helpless if the nation is in a failed state and is insolvent. once more extremely unlikely. The third scenario involves a nuclear disaster, but that won’t be discussed in this article. The bottom line is to choose firms based on their claim performance rather than worrying about their going bankrupt.

I went with a whole life policy instead of term life. Maybe we can discuss the pros and cons of each?