5 key Factors You Should Consider While Purchasing Term Insurance Plan

For most individuals, purchasing term insurance has become a necessity more than a choice. Nowadays, term insurance has gained huge popularity among customers and more and more individuals are keen on purchasing the policy. With a continuous increase in demand from customers, the insurance companies offer an extensive range of term insurance policy.

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However, choosing the right policy can always be a herculean task for policy buyers. With different options available in the market, it is quite easy for policy buyers to get attracted to the insurers, which offer a lower premium.

However, one might end up buying insufficient coverage, by just focusing on a lower premium. Thus, buyers need to consider the following factors while purchasing a term insurance policy.

Note: Know more about what is term insurance first before reading this article.

Term Plans

₹1
Crore

Life Cover

@ Starting from ₹ 13/day⁺

₹50
LAKH

Life Cover

@ Starting from ₹ 8/day⁺

₹75
LAKH

Life Cover

@ Starting from ₹ 12/day⁺

Estimate the Coverage Amount you Need

An individual should consider choosing the term life insurance coverage that will be adequate enough to take care of the family’s financial need in case of any uncertainties. The best way to choose the right coverage is to calculate the following.

First, estimate the monthly expenses of the dependent’s family and multiply it by 150. The multiple of 150 factors in future inflation.
Second, add all future liabilities like personal loans, home loans, credit card bills, etc.
Third, deduct the liquid assets that you have like mutual funds, FDs, stocks, etc.
Fourth, consider the future expenses that may occur as the future financial goal like your child's education, marriage, etc.
Also, don’t forget to add the retirement corpus that you would like to leave for your spouse.

By calculating all these factors, you will be able to evaluate the amount of coverage you need to secure the financial future of your family.

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Determine the Policy Tenure

Once the coverage amount is determined, it is important to know the term period of the policy you would need it for. You should not choose a smaller tenure as the policy will lapse before the completion of the financial obligation. Similarly, you should not choose too long policy tenure as the premium charge will increase with the increase in age and you will end up paying a very high premium.

Note: You can easily calculate the term plan premium by using the term insurance calculator online tool.

It is important to choose the right policy tenure. The right way to estimate the tenure of a term insurance plan is to determine the liquid net worth after subtracting the liabilities. The age at which your liabilities will be covered by your liquid net worth should be the right age till which you need coverage.

Choose the Riders Carefully

Term insurance policies offer different rider options to enhance the coverage of the policy. Thus, it is important that you go through the term insurance benefits offered under the rider option before choosing the one. There are four different types of riders offered by the term insurance policy. These are:

Accidental death benefit rider
Critical illness rider
Waiver of premium rider
Accidental disability benefit rider
Income benefit rider

Don’t Forget to Check the Claim Settlement Ratio of the Insurance Company

It is the most important factor to consider while purchasing the term insurance policy. The claim settlement ratio shows the efficiency of the insurance company. The higher the claim settlement ratio of the company will be, the more efficient it will be at settling the policy claims. Thus, you should always consider purchasing a policy from a reputed insurer, which has a higher CSR ratio. By this way, you will be ensured that the claim filed by the nominee of the policy will be paid in case of an eventuality.

Consider Purchasing a higher Coverage

Whether you buy a 1 crore term insurance plan or not, it is important to know that the coverage you choose for your term plan should be 10-15 times your annual income. As a comprehensive and simplest form of life insurance product, the term plans offer the advantage to purchase a higher coverage amount at a minimal premium rate. Thus, make sure that you follow this thumb rule while purchasing a term insurance plan and also consider the other significant factors like health conditions, age, dependents, annual income, etc. By considering all these factors equally and by comparing the quotes of the plan online you will be able to select the most remunerative plan as per your suitability and requirement.

The Bottom Line!

The insurance experts always advise purchasing the policy at a young age, as with the increase in policy tenure the premium of the policy also increases. By considering these factors you can choose the term insurance policy that fits your requirement right and ensure the financial security of your loved ones.

Note: Check out the best term insurance plan in India and choose one that suits your requirements.

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˜The insurers/plans mentioned are arranged in order of highest to lowest Sum Assured(SA) offered by Policybazaar’s insurer partners offering term insurance plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Rs. 400/month is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 400/month (Rs.13/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 230 is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 8/day is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 12/day is starting price for a 75 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 497/month is starting price for a 1.5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 487/month is starting price for a 2 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 626/month is starting price for a 3 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 905/month is starting price for a 5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,267/month is starting price for a 7 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

*The full refund of premium is available on availing the one-time option of refund of premium. Total premium paid for policy (paid for add-ons) will be the special exit value, payable on availing the one-time option of refund of premium if you wish to completely exit the policy.

+Rs. 447/month is starting price for a 1 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs.679/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 910/month is starting price for a 3 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,374/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,924month is starting price for a 7 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

Women

+Rs. 400/month is Starting price for a 1 crore term life insurance for an 18 year-old Female, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 461/month is the starting price for a 1 crore term life insurance for an 24 year-old female, non-smoker, with no pre-existing diseases, cover upto 54 years of age.

1,642/month is the starting price for a 1 crore term life insurance for an 44 year-old female, non-smoker, with no pre-existing diseases, cover upto 74 years of age.

Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited

We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881

For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale

Policybazaar Insurance Brokers Private Limited | CIN: U74999HR2014PTC053454 | Registered Office - Plot No.119, Sector - 44, Gurgaon, Haryana – 122001 | Registration No. 742, Valid till 09/06/2027, License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the insurers.

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