The Ultimate ₹1 Crore Term Insurance Checklist: What to Ask Your Advisor

Choosing a ₹1 crore term insurance policy is a significant decision. While online calculators provide a quick premium estimate, they can’t address the nuances of your personal situation. This is where a knowledgeable advisor comes in. To ensure you’re making the best choice, it’s crucial to go into the conversation prepared. This checklist of questions will help you move beyond the basics and secure a term insurance plan that truly protects your family.

1. Is a ₹1 Crore Cover Enough for Me?

This should be your first and most important question. While a ₹1 crore term insurance policy is a popular choice, it may not be the right amount for you. Ask your advisor to help you calculate your Human Life Value (HLV). This calculation considers your income, age, outstanding loans, and future financial goals (like your child’s education and marriage). It’s the only way to determine if ₹1 crore is sufficient to replace your future income and cover all your family’s needs in your absence, factoring in inflation.

2. What is the Insurer’s Claim Settlement Ratio and Solvency Ratio?

Don’t just look at the premium. The real value of a term insurance policy is in the insurer’s ability and willingness to pay out claims. The Claim Settlement Ratio (CSR) indicates the percentage of claims the company has settled in a year. A consistently high CSR (above 95%) is a strong sign of reliability. The Solvency Ratio, on the other hand, measures the company’s financial health. Ask your advisor for these numbers. A financially strong insurer with a high CSR gives you the confidence that your family won’t face hurdles during a difficult time.

3. What Riders Should I Consider Adding?

Riders are add-ons that enhance the coverage of your ₹1 crore term insurance plan. Your advisor should explain the benefits of each. Ask about riders for critical illness, accidental death, and waiver of premium. The waiver of premium rider, in particular, is an invaluable tool that ensures your policy remains active even if you are unable to pay premiums due to a disability or critical illness. These small additions can make a significant difference to the overall protection your policy provides.

4. What Are the Exclusions of the Policy?

A policy document is full of legal jargon, and it’s easy to miss critical details. Ask your advisor to clearly explain the exclusions—the specific situations where the policy will not pay out. Common exclusions include death due to suicide within the first year or death resulting from engaging in illegal activities. Understanding these exclusions upfront prevents any surprises for your family later.

5. What is the Claim Process Like?

A smooth and hassle-free claim process is essential. Ask your advisor what the step-by-step process for filing a claim is. What documents are required? How long does it typically take to settle a claim? A good advisor should be able to walk you through the entire process and reassure you that the company has a streamlined system in place to support your family during their time of grief.

By asking these five crucial questions, you transform the process of buying term insurance from a simple transaction into a strategic, informed decision. Remember, you’re not just buying a financial product; you’re securing a legacy for your loved ones.