While we can’t control what tomorrow holds, we can certainly prepare for it. Imagine building a house without a foundation—this is what financial planning looks like without a term insurance plan. A term plan is the cornerstone of your financial security — affordable, straightforward, and powerful in protecting your family’s future.
So, the real question is: Are you really covered? Whether you already have a policy or are considering buying one, this checklist will help you ensure you’re choosing the best term insurance plan for your needs.
1. Do You Have Enough Coverage?
The primary role of a term plan is to replace your income. If something were to happen to you, would your family be able to maintain their lifestyle without financial strain?
Ideally, your sum assured should be 10-12 times your annual income. This ensures that your family can pay off debts, manage monthly expenses, and fund long-term goals, such as your children’s education.
For example, if you earn ₹10 Lakh annually, your coverage should be at least ₹1 Crore to maintain financial stability in your absence.
2. Have You Considered Outstanding Loans?
If you’re repaying a home loan, personal loan, or even EMIs for a car or education, your policy should be large enough to clear these debts. The last thing you want is for your family to inherit your liabilities.
Add up all your debts to your sum assured goal. This way, your insurance covers both income replacement and debt settlement.
3. Did You Buy the Policy at the Right Age?
Here’s a golden rule: The earlier you buy a term plan, the cheaper the premium.
Premiums are calculated based on your age and health. A 25-year-old non-smoker might pay ₹500 per month for ₹1 Crore cover, while a 35-year-old smoker could pay more than double that.
Even if you think you’re too young for insurance, you’re not. Buying early locks in low premiums for the entire policy duration.
4. Are You Aware of Your Term Plan Benefits?
Today’s top term insurance benefits are more flexible than ever. You can customise your plan to suit your family’s future needs. Here are some payout options to consider:
- Lump Sum: A one-time payment to your beneficiary
- Increasing Income: Annual payouts that rise every year, ideal if you expect your family’s expenses to increase
- Return of Premium: Get back all your premiums if you survive the policy term
Each option has its own benefits. The ideal choice depends on your income stability, future planning, and personal preferences.
5. Are You Utilising Riders?
Riders are add-ons that provide extra coverage at a minimal cost. Here are some common riders to consider:
- Accidental Death Benefit: An extra payout if death occurs due to an accident
- Critical Illness Cover: A lump sum payment if diagnosed with major illnesses like cancer, heart attack, or stroke
- Permanent Disability Rider: Provides financial support if you’re unable to work again due to a disability
Assess your lifestyle risks and family history to pick riders that offer maximum benefits.
6. Are You Saving on Taxes the Smart Way?
Term insurance offers significant tax benefits, making it an effective tool for reducing tax liability.
For instance, an individual earns ₹10 Lakh annually. Without a term plan, their entire income is taxable under the old regime. However, by purchasing a term insurance plan and paying ₹25,000 annually as premium, they can claim this under Section 80C (limit of ₹1.5 lakhs). This reduces their taxable income to ₹9.75 Lakh.
Adding other 80C investments (like PPF, ELSS, or home loan principal), they can claim the entire ₹1.5 Lakh, saving nearly ₹45,000 annually in taxes.
Additionally, under Section 10(10D), if the claim arises due to their unfortunate demise, the payout to their family is tax-free (subject to policy conditions).
7. Is Your Term Plan Adjustable to Life Changes?
A good term plan should evolve with your life changes. Major life events, such as marriage, having children, taking out a home loan, or starting a business, often warrant a review of your coverage. Check if your policy allows flexibility to upgrade coverage over time.
8. Have You Disclosed Everything Honestly?
Non-disclosure of facts like smoking habits, existing illnesses, or past surgeries can result in claim rejection. Always be transparent when filling out the proposal form. Honesty ensures your nominee’s claim will be honoured in the future — don’t risk your family’s safety for a slightly lower premium today.
9. Did You Choose a Reputed Insurer?
The claim settlement ratio is a crucial metric for assessing an insurer’s reliability. Choose a company known for transparent processes, strong customer support, and timely claim settlements.
10. Do You Review Your Policy Periodically?
Life is always changing. So should your coverage. Schedule a policy review every 3-5 years or after any major life event.
Take Action Today: Secure Your Family’s Future
A term insurance plan is more than just a policy—it’s a promise to your loved ones. It ensures that no matter what happens to you, your family will be taken care of. That’s the kind of reassurance money alone can’t buy—but a well-chosen term plan can provide it.
Brands like Aviva India offer comprehensive term plans that cater to your changing needs — whether it’s higher coverage, rider additions, or flexible payouts. Let’s take a look at three popular Aviva plans:
- Aviva Signature 3D Term Plan – Platinum: This plan offers complete financial protection for your family in case of death. It offers two plan options: Life Protect for uniform coverage and Credit Protect for loan repayment. With special premium rates for women and non-tobacco users, the plan also includes riders such as Accidental Death and Dismemberment, Critical Illness, and Cancer Coverage.
- Aviva Signature Increasing Income Plan: Designed to provide guaranteed increasing income payouts, this plan ensures your family’s financial stability against inflation. The income increases by 15% every three years, and Aviva funds your future premiums if you’re no longer around. This plan also includes a death benefit, ensuring that your loved ones are financially secure.
- Aviva Signature Investment Plan – Platinum: This ULIP plan offers both security (sum assured) and growth (fund value) to support your family’s future. With flexible investment options, top-up premium opportunities, and the RetireSafe feature, it’s a great choice for long-term financial growth and retirement planning.
The best time to buy a term plan was yesterday. The second-best time is right now. Explore your options today and secure the future of your loved ones with the protection they deserve.
*Standard T&C Apply
**Tax benefits are subject to change in prevalent tax laws.
***Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.
****Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
