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How to choose a good term plan?

Premium amount and claims ratio are two important factors to consider while choosing a term plan

I am 47 years. My family consists of my wife and 3 children. How much term insurance do I require? Please suggest a good plan. I do not have any as yet.
-Anandakrishnan.S

A commonly used rule of thumb to calculate your required insurance cover is ten years' income, but there could be other influencing factors too. Some of these factors could be your children's education needs and liabilities. You should take into account all these factors and their financial implications to make a reasonable estimate of how much insurance you need.

While choosing a good term plan, three important factors need your attention:
1. Claims settlement ratio: This is the total number of death claims approved by an insurance company, divided by the total no. of death claims received by the insurance company. Go for a higher number.
2. Premium amount: Term insurance is an efficient, low cost product. However, the premiums can vary widely between different insurance firms. Go for the one charging relatively low premium.
Both claims ratio and premiums for different insurance firms can be easily found and compared online these days. Choose the one which offers a reasonable combination of high claims ratio and low premiums.
3. Riders: Riders are additional benefits that can be purchased with a life insurance policy to enhance your insurance cover. Riders can protect you against a host of unexpected tragedies. Read this article for more details on riders.

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