The most critical step in buying term insurance is calculating the requisite amount of Sum Assured. A standard thumb rule as recommended by experts is to take a Coverage of atleast 10 times his gross annual income. However, while arriving at exact Sum Assured, one should also consider factors like lifestyle, needs of the dependents, age of the dependents and future increase in earnings. To determine the adequate coverage, kindly contact us as customercare@policyworld.com
The next important step is to select the right insurance company based on:
- Claim settlement Ratio: It is the ratio between the number of claims settled by an insurance company and the numbers of claims filed by the policyholders. It is always advisable to go for the insurer with the highest claim settlement ratio.
- Solvency Ratio: It refers to an insurer’s ability to take care of its debts. A good solvency ratio indicates that the Insurance Company has a strong ability to meet its short-term and long-term liabilities.
While filling up the forms, it is very essential to declare all the relevant information correctly. Any misdeclration/hiding of information may lead to the rejection of the claims. The following information is very essential for the Insurance Company to decide whether to issue the policy:
- Health Information including major operations/surgeries, health issues, pre-existing diseases etc.
- Lifestyle Habits like Consumption of tobacco, alcohol etc.
- Family History including history of health of parents and siblings and their death status and reasons thereof.
- Income details including all the source of income.
Average Sum Assured per person in India is approximately 1 lakh, which is very less. Insurance cover should be taken in such a manner that the surviving family continues to enjoy their current lifestyle upon unfortunate demise of the policy holder.
Unfortunate event can happen at any time any place. With the increase in the age, there will increase in premium. Further, with the increasing age, there are chances of getting lifestyle diseases like diabetes etc. This can lead to higher premium or even rejection of the Insurance Proposal. Hence, it is advisable to take the Term Insurance at the earliest.