Term Life Insurance in India — How Much Cover You Actually Need and Where to Buy It

## The only insurance rule you need to know Buy term insurance for protection. Buy mutual funds for investment. Never mix the two. This one rule, followed consistently, saves most middle-class Indian families ₹20,000–50,000 per year in unnecessary insurance premiums while giving them 3–5x better life cover. ## How much cover do you need? Simple framework (DIME method): - **D**ebt: All outstanding loans (home, car, personal) - **I**ncome replacement: Annual income × remaining working years (use 15–20 years) - **M**ortgage (if not in debt): Cost of housing family doesn't currently own - **E**ducation: Children's education fund Add these up, subtract liquid assets and existing cover = your gap. ## Claim Settlement Ratio — what it means The CSR is the percentage of claims an insurer pays out. Top performers (FY 2023-24): - LIC: 98.7% - HDFC Life: 99.5% - Max Life: 99.6% - Tata AIA: 99.5% All major private insurers now have 98%+ CSR. Don't pay a premium for LIC's slightly lower CSR — private insurers have caught up. ## Online vs offline term insurance Online direct-purchase term plans are typically 30–50% cheaper than the same plan bought through an agent. There's no difference in coverage or claims — the insurer pockets what used to go to agent commission. Always buy online. ## Practical checklist - [ ] Disclose all health conditions honestly (non-disclosure = claim rejection) - [ ] Add nominee carefully — include children if spouse is also not working - [ ] Inform family about the policy and claim process - [ ] Keep premium payment up to date — lapsed policy = no cover