Term Insurance used to be a simple product: pay a premium, get a death benefit if something happens to you. Today it comes with dozens of variants, riders, and customisation options, which makes picking the right one harder than it should be. Here are the eight things worth checking before you buy. In the order they usually matter:
1. How much cover do you actually need?
Don't default to a round number like ₹1 crore just because it sounds substantial; calculate what your family will actually need. There are two ways to do this. The manual method: subtract what you own (savings, investments, Fixed Deposits) from what you owe (current and future expenses, financial goals, outstanding Loans) to find the gap your family would face without your income.
Or use a tool like the Human Life Value (HLV) Calculator, which estimates a suitable cover amount from a short set of questions in under two minutes.
2. How do you check if an insurer is reliable?
Look at the insurer's claim settlement history and independent customer reviews before you look at premium price. This matters more for Insurance than almost any other purchase, because you will not be present to sort out problems when your family actually needs to make the claim. A policy is only as good as the company's willingness to pay out when the time comes.
3. What is the Claim Settlement Ratio? Why does it matter?
The Claim Settlement Ratio (CSR) is the number of claims an insurer settled divided by the number it received in a financial year. A higher CSR generally signals a more dependable claims process. ABSLI's CSR stands at 98.86% for individual claims in FY25-26, as reported to IRDAI. Treat CSR as one input among several, not the only one; also look at the insurer's claims turnaround time and documentation process.
4. Should you fill the proposal form yourself?
Yes, always fill it yourself rather than letting an agent or advisor do it for you. The proposal form is the legal basis of your contract. If someone else fills it in and gets a detail wrong, or you knowingly withhold information, the insurer can use that against a claim later; by then, you won't be there to correct it. Review every field before you submit.
5. What customisation options should you actually consider?
Term Plans typically let you configure premium payment frequency, the payout mode for your nominee (lump sum, income, or a mix), and add-on features like limited pay (finish paying premiums faster) or increasing cover (cover rises over time to keep pace with your responsibilities). Riders add further protection at an extra premium; only add ones that match a genuine gap in your situation, not because they are bundled by default.
6. What is the MWP Act? Should you use it?
The Married Women's Property (MWP) Act lets a married male policyholder route the claim amount directly to his wife and children, ahead of creditors or other claimants under succession law. Without this addendum, if you have outstanding loans or liabilities, the claim proceeds could first be used to settle those, or contested by other family members under succession rules, before your immediate family sees the money.
Signing the MWP addendum at the time of purchase avoids that entirely for eligible policyholders.
7. How should you compare Term Plans before buying?
Compare the sum assured options, premium, claim settlement track record, and rider availability of a few shortlisted plans before deciding. Treat this as a long-term financial decision, not a quick purchase. Several comparison tools exist online for this. Use them to get the numbers side by side, then verify the details on the insurer's own policy document.
8. Where should you store your policy documents?
Keep your policy in an e-insurance account or on DigiLocker so it is accessible digitally, rather than relying only on a physical copy. Set a strong, memorable password, change it periodically, and make sure your nominee or family knows how to access it when the time comes. Do not share these credentials with anyone outside your immediate family.
How ABSLI can help
ABSLI's Term Insurance range includes plans such as the ABSLI Super Term Plan, a Non-Linked, Non-Participating individual pure risk premium Life Insurance Plan offering a lump sum death benefit, limited pay, and increasing cover options. Other plans in the range come with features like return of premium or whole-life cover up to age 100, along with optional riders such as a critical illness rider or accidental death benefit rider.
Check the classification, sum assured, and rider terms of any specific plan against your own calculated cover need before buying.
September 15, 2026
5 mins read
Table of Contents
