Before buying Life Insurance, estimate the financial support your family would need, choose a policy that addresses that need, and check that you can maintain the premiums. Read the policy documents, disclose requested information accurately, and prepare your nominee. A buying decision should rest on the contract, not just the headline premium.
How much life cover do you need?
Start with the money your dependents would need for living costs, outstanding debts, and important future expenses if your income stopped. Subtract existing life cover and assets genuinely available for those needs. This is a planning estimate, not an underwriting entitlement. Inflation, timing, and changing responsibilities can alter the result.
For an illustrative calculation, assume family support of ₹48 lakh, debts of ₹20 lakh, and education needs of ₹12 lakh. If usable assets and existing personal cover total ₹15 lakh, the estimated gap is ₹65 lakh: ₹48 lakh + ₹20 lakh + ₹12 lakh − ₹15 lakh. These assumptions are invented for explanation and do not allow for investment growth, inflation or individual circumstances.
Avoid counting your family home as readily spendable money. A Human Life Value calculator can help organise your assumptions but review the input rather than accepting its output automatically.
Which policy should you consider first?
Begin with the purpose of the purchase. If your immediate need is financial support for dependents after your death during a specified period, examine a Term Policy’s death benefit and duration. If you also want other benefits, identify what the contract actually provides and what additional commitments it requires.
Check whether the policy pays anything if you survive the term. Do not assume a pure protection policy includes a maturity payment. Ask how long the cover lasts, which events trigger payment, and whether optional benefits change the premium. Any plan-specific feature must be checked in the current policy wording and illustration.
How can you set a premium budget you can maintain?
Choose a premium commitment that fits your regular cash flow after essential expenses and other obligations. Check the payment frequency, premium-paying term, and total payable amount. The policy term and premium paying term can differ, so a shorter payment commitment does not necessarily mean the cover ends at that point.
Use the final underwritten quotation when budgeting. An advertised example may assume a particular age, occupation, health profile, and benefit option. Ask what happens if you miss a payment, including grace period rules, lapse, revival, or reduced benefits where applicable. Set reminders and keep payment receipts. Do not rely on a future salary increase to fund an unaffordable commitment.
What should you check in the documents before accepting?
Read the policy schedule, Customer Information Sheet, policy wording, and applicable benefit illustration together. Confirm the insured person, sum assured, duration, premium commitment, payout option, and exclusions. These documents should explain what you are buying. Ask for written clarification if a sales explanation and the contract appear inconsistent.
Use a simple checklist: does the sum assured match your intended cover, are names and dates correct, which exclusions apply, are there restrictions on optional benefits, and what are the cancellation and servicing procedures? Where an illustration applies, distinguish contractual benefits from non-contractual projections. Keep the signed illustration and submitted proposal with your policy records. A verbal assurance should not substitute for the policy terms.
What information must you disclose in your application?
Answer the proposal questions fully and accurately, including requested health, tobacco, alcohol, occupation, income, and existing Insurance information. Do not let another person guess your answers. If a question is unclear, ask the insurer what it means, and retain the clarification before submitting the application.
Check the completed form even if an adviser filled it in. Review diagnoses, treatment, and tests asked about, and disclose prior Insurance decisions where requested. If you discover an error, tell the insurer promptly in writing and retain its response. Medical underwriting may lead to additional questions. Tests, revised terms, or a decision not to offer cover. Acceptance is not automatic.
How should you assess service and claim information?
Check the insurer’s registration, access to policy servicing, complaint procedures, and official disclosures. Claim settlement information can be useful context, but it cannot establish whether a particular future claim will be payable. Read the policy’s claim conditions and understand the information your family may need to submit.
If reviewing a claim ratio, identify the financial year, whether it is measured by number or amount, and the claim category. Do not treat a percentage as a personal assurance. Ask where claims can be notified and where to find the current document checklist. Keep the insurer’s official contact details with your policy records.
Can you cancel after receiving the policy?
Under the cited IRDAI Life Insurance framework, the free-look period is 30 days from receiving the policy document. It lets you review the terms and seek cancellation if dissatisfied. Check the process promptly. Permitted deductions may apply, so cancellation does not necessarily mean every rupee paid will be refunded.
Record when the document arrives and read it immediately. If the issued cover, premium, or benefit option differs from what you intended, contact the insurer in writing. Request cancellation through its official process within the applicable period and keep an acknowledgement. Free-look cancellation and later surrender are different processes, with different financial consequences.
What should your nominee know?
Your nominee should know if the policy exists, where its records are stored, and how to contact the insurer. Check nomination details at issue and after relevant family changes. A practical handover can reduce confusion when a claim needs to be notified, although settlement still follows the contract, and applicable law.
Store the policy number, policy document, proposal copy, payment records, and current contact details securely. Explain the selected payout option and how the nominee can obtain the claim checklist. Keep personal records accessible to the right person without sharing account passwords unnecessarily. For legal issues involving nomination, assignment, or succession, obtain advice suited to your circumstances.
When should you review your cover?
Review your protection when your responsibilities change, such as after marriage, a child’s birth, a new Loan, or a change in employment. Revisit the support your family needs, the cover you hold, and your premium budget. An existing policy does not necessarily increase automatically when your needs grow.
Additional cover may require a fresh application and underwriting. Check the terms of employer provided cover when changing jobs. If replacing a policy, understand the new terms and any loss from ending the old one, and avoid creating a gap in protection. Keep your nominee and contact details current.
How can ABSLI help you check the details?
ABSLI’s official website provides policy servicing information, proposal guidance, and access to prospectuses and specimen contracts. Use those documents to check a shortlisted policy’s terms and ask for written clarification before applying. Product suitability, availability, underwriting, and benefits depend on the specific policy and your circumstances.
This article does not recommend a named plan or reproduce a premium quotation. If a product is added during implementation, include its verified current UIN, classification, and applicable disclosures, and submit the revised content for review.
October 6, 2026
5 mins
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