Term Insurance in India: The 7-Point Checklist Before You Buy

Term insurance is the cheapest, purest form of life cover — and also the most misunderstood. A ₹1 crore cover for a 30-year-old non-smoker costs under ₹12,000/year. Yet 8 out of 10 Indians are underinsured.

How much cover do you actually need?

A simple rule: 15–20× your annual income. Earning ₹10L/year? Buy ₹1.5–2 Cr cover. Have a home loan? Add the outstanding loan amount on top.

The 7-point checklist

• Buy pure term, never ULIPs or 'return-of-premium' policies — they compromise the cover.
• Cover till age 60–65, not till 85 — insurance is for income replacement, not inheritance.
• Claim settlement ratio > 97% AND claim amount settlement ratio > 95%.
• Disclose EVERYTHING — smoking, alcohol, medical history. One hidden fact voids the policy.
• Add critical illness + accidental disability riders if premium allows.
• Buy online — 30–40% cheaper than agent-sold plans, same policy.
• Nominate correctly: register nominee, share policy details with spouse & parents.

Common mistakes

Buying only ₹50L cover 'because that's what the bank offered'. Waiting till 40 to buy — premiums double every decade. Cancelling term after taking a home loan — bank cover is limited to the loan, your family still needs income replacement.