Warren Buffet’s Rule No.1: Never lose money.
Rule No. 2: Never forget rule no.1
So, how do you ensure your entire life’s wealth doesn’t vanish within a few years of your demise?
Term Insurance!
Here’s the ULTIMATE GUIDE to select a TERM LIFE INSURANCE plan.
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(1/10)1) Policy duration
Your term plan is your financial replacement. You only need it till your kids are financially dependent.
So, go for a plan that covers your family till your kids are well-settled. It’s much cheaper & premiums shoot up if your plan is beyond the age of 70.
2) Policy Cover
Keep these things in mind:
Annual income
EMIs & loans
Daily expenses (rent, bills, other insurance premiums)
Kids’ school & college fees
Existing life insurance
at 6% inflation, your 1CR cover will be equivalent to 4.5L in the next 50 years.
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PS Check your ideal term cover using @Ditto Insurance ’s Term Cover Calculator- bit.ly/3NJijIJ
3) Riders
You can make your term plan more comprehensive by getting these add-ons a.k.a riders
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3.1) Life Stage–
Allows you to increase your cover by a certain amount during life-changing events like marriage or kids.
3.2) Waiver of Premiums–
This allows you to keep your policy without having to pay premiums in case you get disabled in an accident.
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3.3) Critical Illness–
The insurer will pay you some amount early to battle a critical illness.
Now, how do you pick the insurer?
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1) Claim Settlement Ratio (CSR)
The ratio of the no. of claims the insurer settled & the claims they received.
You should choose an insurer with higher chances of claim settlement.
If CSR >= 99%, you have a winner;
Above 90% is pretty good.
But below 70% is surely a no-go.
2) Amount Settlement Ratio (ASR)
Similarly, you’ve got the ASR i.e. amount settled by the insurer/amount claimed.
You’re going to want an insurer that mostly settles your claim in full.
Any ASR above 90% is good enough;
Above 98% is a hit!
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3) Complaint Volume
If the total number of complaints per 1000 claims is higher than 20, you might have to re-evaluate your options.
Now, that's most of what we consider while picking a term plan for you.
But..
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IT’S STILL BEST TO ASK THE EXPERTS
If you’re thinking about getting a term plan, get on a FREE call with Ditto’s IRDAI-certified insurance advisors - bit.ly/43VEb9x
Backed by #Zerodha, they offer 100% honest & spam-free insurance advice.
#Partnership
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R.K.
@ipo_mantra
A Proud Indian | Active in #IPOs since 2006 | Founder of IPO Mantra | SEBI Unregistered | Tweets on #IPO, #Stocks & #StockMarket | Contact: ipomantra@gmail.com
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