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Choosing a life cover

Life insurance should be taken for a term up to which your family depends on your income

Is it advisable to go for life insurance policies with tenure ranging between 35 and 40 years? Should I buy Aegon iTerm plan which has a claim settlement ratio of 66 per cent.Shreyans Daga

Life insurance should be taken for a term up to which your family depends on your income. Hence, the tenure -- whether long or short -- varies for everyone. Insurance can also be taken for the years remaining to your retirement or till someone else replaces you as bread earner.
Since, claim settlement is an important factor while choosing a policy, you can consider insurers that score high on this parameter, for e.g. HDFC and ICICI have higher claim-settlement ratios.

Although Aegon Religare's claim settlement ratio is low, it has improved from 48 per cent in 2009-10 to 66.01 per cent in 2011-12. Also, it offers cheapest term plans in the market. If you are looking for a high sum assured, diversify the cover into two insurers and opt for Aegon Religare iTerm plan as one of the plans.

The claim settlement process will be smooth for your family if you truthfully disclose your health conditions and lifestyle at the time of purchase. It is advised to fill policy proposal form on your own to avoid discrepancies.

However, if your insurance company tries to escape claim settlement, IRDA- the insurance regulator has developed an online Integrated Grievance Management System to address consumer's complaints.



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