Term Insurance Checklist
Important considerations to ponder prior to purchasing a term insurance plan in India.
1. Benefit for Terminal Illness
Certain policies will provide the entire coverage amount upon receiving a terminal illness diagnosis. In such cases, you can receive the funds even if death has not occurred and utilize them as you see fit. This is another valuable benefit to consider.
2. Benefit for Critical Illness
In the event of a severe illness diagnosis, there's a possibility of job loss, and your family may need to manage without your income. Nevertheless, choosing the critical illness benefit in your term policy can provide financial relief during such a crisis. It's important to note that critical illness benefits can vary, so it's advisable to delve into the details.
3. Verify the ratio of claims settled.
When acquiring a term insurance policy, it's crucial to ensure that the insurer promptly disburses claim settlements. To accomplish this, you should review the three-year average claim settlement ratio and the percentage of claims settled within 30 days. If both of these figures exceed 97%, then you can consider it a favorable choice. You can locate this information in the annual reports published by IRDAI.
4. Benefit for Accidental Death
Certain insurance policies provide the choice of enhancing protection specifically for accidental deaths. In such instances, you have the flexibility to select your coverage for natural death and accidental death separately. While we generally advise customers to opt for comprehensive coverage without dwelling on the distinctions of death types, having this additional option can be beneficial.
5. A substantial settlement ratio is also essential.
Certain insurers may approve smaller claims but reject a few higher-value claims to boost their claim settlement ratio. Therefore, it's crucial to assess the total amount settled as a percentage of the total claimed value. A figure exceeding 90% should be considered satisfactory. You can locate this data in the annual reports published by IRDAI.
6. Examine the quantity of complaints.
Should the overall complaints received (per 1000 claims filed) exceed 20, it's advisable to reevaluate your choice of insurer. You can access these statistics in public disclosures, as insurance companies are obligated to provide this information on their websites.