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“Best Term Plan in the Market!”


Please read till the end to know the best term insurance in the market.
So you have decided to purchase the term insurance, which means who are opting for a risk transfer. There are 4 ways to manage risk, let’s go through them and try to insert them in our personal finance equation.
1. Risk Avoidance: We are a master in it and doing it for years. In individual life, one of the biggest risks is the uncertain death of the breadwinner of the family, avoiding this particular risk can hamper your financial world and it will take years to recover from this financial loss.
2. Risk Reduction: Driving your bike carefully, wearing a helmet, putting the seatbelt on, jogging every day and eating healthy & nutritious food every day are some ways to reduce certain health and life risk. You can reduce few risk but not completely, the uncertain nature of various risk exposes you to vulnerabilities.
3. Risk Retention: You have not avoided the risk nor reducing it, you are just bearing the future cost of the loss in present value. This is possible for risk like health issues if you have managed to save enough for a medical contingency, you may retain this risk, but still there will be a risk of exhausting this special fund in the case of severe illness.
4. Risk Transfer: After doing all the due diligence, you have decided to transfer the risk to an insurance company. In the case of an agreed event happening as per the contract, the insurance company will take care of the financial loss.

We are doing risk transfer for more than 2 decades now in the face of LIC’s policy. But it’s more of an unknowing risk transfer and we don’t know the importance and impact of the same. Furthermore, after years of miss-selling and series of financial awareness initiative, you came to know about the importance of risk transfer and the right amount of risk transfer. Therefore, you have decided to purchase a term insurance, but you are confused which one to get. If you type “Best Term Insurance” on google search you will get 27 crore search results and it’s enough to make you even more confused.
Before looking for the best plan do read this modified definition of life insurance:
“Life insurance is a contract between two parties, parties to the contract are insured and Insurance company. As per the contract first onus is on the insured to provide the relevant financial and health details to the insurer and disclose any information related to his health, which might be the major influence in taking the underwriting decision for the said policy. The contract will be for a certain period and Insured need to pay the premium as per promised intervals. Non-payment of the premium within due date plus grace period will be the reason for discontinuance of the contract/policy. In the case of suicide within less than 1 year of the policy initiation, the insurance company will not approve any claim whatsoever. Also, the insurance company has 3 years to find any misrepresentation or concealed information in the contract after which insurance company cannot deny the claim on any facts. At the time of the untimely death of the insured, diseased family needs to comply with the formalities like a FIR and post-mortem report in case of accidental death and treating doctor’s report and a certificate in case of natural death.”
You may check the details on How to make a claim from this website http://www.policyholder.gov.in/how_to_make_a_claim_life.aspx#
So, which is the best term insurance? The answer lies in the definition and the definition is my understanding of life insurance. You can buy a plan from any company, it might be your bank or it might be the company you feel is safe or a new player with cheap premium. What matters here is understanding the role of the party to the contract, if you are true in your role then there is no possibility of denial, consequently, if there is denial from the insurer and you are right on your stand, you have the court at your disposal.
Does claim settlement ration matters?
It doesn’t, the CSR is not term insurance specific and includes all kinds of policy which start from 50k to 50 Cr. An insurer will not form a team of the investigator to inspect a claim of 50k or 100k but he will for a significant claim amount like 50 lakh or a crore. You might get the term plan from the company which has a good settlement ratio, but it’s just like shooting in the dark. Go ahead with the insurer of your choice and furnish all the details which insurer ask with honesty.
Does taking 2 term plan instead of one will increase the probability of getting the claim amount?
Again a foolish thought, if one insurer accepted the claim other have to do it as well. Insurance companies are making a pool of information, which will work in the favor of the insurer. If you have 3 term plan from 3 different companies, at the time of the claim all of them will get to know as and when you apply for one, two and third. They will be working together in this case rather than working separately. Buying more than one policy is not the way to mitigate the risk.
At the end, you should know your rights and educate your family about the same as well. It’s not wise to purchase insurance policies and lock them in your office locker. Before taking such an important step do consult with your family and close friends and let them know what’s needed to be done in the case of untimely death.
You can download this life insurance requirement calculator to know the amount of risk cover you need. It follows the expense replacement method and works on basic fundamentals of it. Survivor expenses up to the life expectancy of your spouse, add liabilities if you have any, add important goals like a child’s education which needs to be funded apart from the survivor’s expenses and minus your assets.
Best of luck!!!

Download Insurance Requirement Calculator


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