What questions you might personally have?

• Is Life insurance necessary? – Life insurance is not just an option, it is a necessity for most families. It provides financial protection in case of sudden death and ensures your dependents do not face financial hardship. Without it, your family may struggle to cover daily expenses, education costs, or loan repayments.

• Do we really require a term plan? – A term plan offers maximum coverage at the lowest premium. Unlike investment-based plans, it focuses purely on financial protection. It ensures that in the event of your untimely demise, your family receives a large lump sum to cover future needs.

• Why should I buy one? – Life insurance provides peace of mind knowing your loved ones are financially secure. It safeguards your family’s lifestyle, helps them pay off debts, and ensures your children’s education and future are not compromised.

• How much cover is sufficient for me and my family? – The right coverage depends on your income, lifestyle, and financial responsibilities. Experts recommend at least 10–15 times your annual income so your family can maintain their lifestyle without financial stress.

• From where should I buy insurance? – You can buy life insurance directly from companies, agents, or online aggregators. Online policies are usually cheaper and transparent, while agents can provide guidance and personalized service.

• Are there any other products insurance companies offer? – Yes, apart from term plans, companies offer ULIPs, guaranteed return plans, child plans, retirement plans, and health insurance riders. Each has unique benefits depending on your financial goals.

Understanding Life Insurance

Life insurance is a financial tool designed to protect your loved ones when you are no longer around. By paying regular premiums, you ensure that your family receives a lump sum amount (sum assured) in the unfortunate event of your death. This money can help them cover living expenses, education costs, loans, and future plans.

In today's unpredictable world, the importance of life insurance cannot be overstated. The 2019 pandemic highlighted how uncertain life can be, making it essential to prepare emotionally, psychologically, and financially. Life insurance ensures your family’s financial security even in difficult times.

Example

Consider a family of four relying solely on the husband’s income of ₹1 lakh per month. If he passes away unexpectedly, the family will face financial hardship, struggling with bills, school fees, and daily needs. However, with life insurance, they would receive a substantial payout to cover expenses and continue their lifestyle without immediate financial stress.

How much cover is sufficient?

If your family’s yearly income requirement is ₹12 lakh, and a fixed deposit provides 6% annual return, you will need at least ₹2 crore of life cover. This ensures your family can generate ₹12 lakh every year to sustain their lifestyle without disturbing the principal amount.

Things to Check Before Buying

• Claim Settlement Ratio – This shows how many claims an insurer settles out of total claims received. A higher ratio (above 95%) indicates reliability and trustworthiness of the insurer.

• Solvency Ratio – This measures the insurer’s financial strength. A solvency ratio above 1.5 indicates that the company has sufficient funds to honor all future claims.

• Customer Base – Companies with a large customer base are generally more stable and experienced. It also means many people trust them with long-term financial security.

• Way of Working – Understand whether the company provides hassle-free claim processes, responsive customer service, and digital support. A smooth claim experience is vital for your family during tough times.

Other Insurance Products

• Guaranteed Plans – These provide fixed returns after a certain period along with life cover. They are low-risk and suitable for people who want assured maturity benefits.

• ULIP – Unit Linked Insurance Plans combine insurance with investment. Part of your premium provides life cover, while the rest is invested in equity or debt funds for long-term wealth creation.

• Bonus Linked Plans – These policies provide life cover and also distribute bonuses declared by the company. Over time, the bonus amount adds to your total benefits, making it a mix of security and savings.

While there are many products available, term insurance remains the most essential. It offers the highest cover at the lowest premium and ensures your family’s financial safety comes first before any investment goals.