Run for cover!

Last year about this time I bought a term life insurance policy. I happened to pay its annual premium today and that’s how I got reminded to write about my experience and thoughts around buying a term plan, so that it may help those contemplating to get one.

Before I decided to buy a term life insurance policy, I was confused and wondered if I needed it at all. I am sure many of you would be in the same confusion and this blog may help you make an informed choice.

What prompted me to buy a term plan?

I am a concerned mother to a set of seven-year-old twins leading an active and outdoor life. I am a cyclist and am often riding on highways or difficult terrain. A freak accident while riding that could have been fatal got me thinking about the fragility of my life. My life is precious because the life and future of my children depend on mine, and to safeguard their future I could either keep home all day or take a term plan that covered them substantially. I chose the latter.

My apprehensions

Shopping online for shoes and shades is definitely different than buying insurance online! I was nervous as heck about buying a financial product online. How safe was the payment going to be? Was I making the right choice of product? Who will resolve issues if any? How would they do the required medical tests? Would I get the premium receipt in time for my tax submissions?

How I chose my term plan

I used TrueCompare to compare between the many term plans available in the market in terms of premium, claim settlement ratio. After some quick research online I shortlisted two term plans, one from HDFC Life and another from Aegon Religare. Both the plans could be bought online and cost near about the same. I, however, settled for HDFC Life Click 2 Protect Plus plan based on the fact that HDFC Life’s claim settlement ratio has been over 95%, second only to LIC.  I think what I got was terrific. – a life insurance policy cover of Rs 1 cr for about 12000 a year!

How much coverage is enough?

Value of human life cannot be estimated in terms of money, but for buying a term plan you have to. A parent of young school going children needs to have adequate life coverage in addition to the goal-based life cover to ensure his/her family maintains the current standard of living and the children’s education is not disrupted. As a thumb rule, the life cover should be at least 10X of one’s annual income in addition to the coverage amount needed for long term goals.

My online insurance buying experience

I must admit I was apprehensive through the buying process, but I was relieved in the next couple of days. Let me share my online buying experience.

The online process was smooth and took less than 10 minutes. The payment gateway was similar to any other shopping site and offered payment options including credit card, debit card, and net banking. Payment was done in a matter of minutes, I received the payment receipt in my inbox followed by a call confirming the policy and seeking an appointment doe the home medical test.

The medical test was smoother than I expected. The gentleman arrives with the home medical kit the very next morning. He took my blood pressure reading, blood sample, and ECG. Yes, a full-fledged at home. Isn’t that cool? The home medical test was done is less than 20 minutes and I received my policy document by courier within a week. And voila, I was insured and protected! I am glad I made the decision to take a term insurance and I am more glad I had the courage to get one online.

Why everyone should have a term plan

• Term plans are easy to process and simple to buy. It can be bought online without an agent
• The premium is not high
• The coverage depends on your term choice – 10, 15, 20 , 30 or even 40 years.
• The sum of the term plan depended on your requirements and liabilities.
• The claim settlement time is less than a month in most cases, hence your family is not strained in case of your death
• Eligible for tax benefits under Section 80C
• It acts as income replacement upon death
• Covers natural as well as accidental death

So, go ahead and buy your term plan today. You will not regret it.