You can claim tax deductions up to ₹1.5 lakhs under Section 80C this tax season by paying term insurance premiums even if you purchase one now.
But here are 3 mistakes to avoid! 
Many people rely on a generic thumb rule of 10-15x of annual income. However, your needs & liabilities may differ from the average.
So, it’s better to take into account your age, dependents, tenure, expenses, loans, rent, kids’ education fees, etc.
Salesmen might tempt you with endowment plans or ULIPS—which promise investment returns with death benefits. Avoid purchasing them. They’re much costlier than a simple plan.
Neither the returns nor the death benefit is worth the high investment
Instead, take a simple term plan & invest your money elsewhere.
You might think that a life insurance plan should be till you die. But that’s obsolete.
By the time you’re in your 60s or 70s—your dependants would be financially stable & can take care of themselves & your spouse.
So spending extra on a long-term plan when you don’t need it doesn’t make much sense.
Finance
Life Insurance
>> By the time you’re in your 60s or 70s—your dependents would be financially stable & can take care of themselves & your spouse.
Times are changing. Better to have longer duration. The difference is about ~6K per annum between a 60yr and 70yr 2Cr term insurance.
The main mistake I think is too much thinking and dilly dallying to purchase one.
The difference is about ~6K per annum between a
60yr and 70yr 2Cr term insurance. --- I disagree with this
The most vulnerable mistake is people either don't inform their nominee about insurance or forget it after a period of time.
Can someone pls suggest following: @third.i.financial.advisors
1. The annual income asked by term insurance companies should that include Income from sources like - Mutual fund gains, profits from Trading of stocks, Rental Income of house, Interest income of fixed deposits, Dividends of shares and mutual funds ? Or just income from business ?
2. If salaried then NET salary or Gross Salary ?
3. if under presumptive taxation then what will be annual income - Incase of professional income i show 50% of total deposit.
4. Also if into old scheme of ITR, deduction of 1.5 lakhs under Section 80C should also be accounted while calculating Annual income ? ( someone told me ITR acknowledgement ke 1st page pe jo income dikhta hai you have to tell that )
.1. ITR or salary suffices for salaried people. If in business , ITR.
2. If salaried then NET salary or Gross Salary ? --- Doesnt matter much
3. if under presumptive taxation then what will be annual income -
Incase of professional income i show 50% of total deposit --- .--- Tricky one here . But ITR income will be considered.
4. Also if into old scheme of ITR, deduction of 1.5 lakhs under
Section 80C should also be accounted while calculating Annual income
? ( someone told me ITR acknowledgement ke 1st page pe jo income
dikhta hai you have to tell that ) ------ You need to give your ITR and company will decide it.
If you need help buying Term plan ... do consider dm ing me ... will suggest best one according to the needs.
IndMoney recently gave an offer for Term Insurance for me,
(No Medical - No Income Proof)
BUT,
I was skeptical and avoided this,
Although the Plan was provided by ICICI iProtect (one of best), I didn't trust the No Documents model..
It felt like a trap..
They estimate salary from your Profile using all your assets
Medical is On-Call which most smart advisors tell to AVOID, since you NEVER should hide anything from Insurance Industry..
Advise:
If you have dependents and possible loans, You NEED TI, otherwise, its not that worth it...
In India I'd say start at 30 or so, its fixed rate...And you shouldn't miss any payments, so make sure you have steady income...
Always opt for medical, disclose latest test and let Insurance Company decide, if they are willing to provide cover..Otherwise its a huge let down towards your dependants.
Always let your nominee know, you have a plan and where the documents are!
Medical is On-Call which most smart advisors tell to AVOID, since you NEVER should hide anything from Insurance Industry..
Don't take term insurance beyond 65 years. If your child knows about it he can make you die sooner 
I am also looking for some great term plan
cash in bank / hand is greatest insurance .
What is ideal to pay monthly or annual
1)check human life value (HLV calculator) to see how much coverage u need
2) choose Limited pay as 12 to 20 years u will save money compared to regular pay
3)if possible go for return on premium option
U will get entire Premium paid minus gst when u r alive
4)choose addons like waiver on disablity, waiver on critical illinees
Accidental death benefit
It may cost you 1000-1500 extra
But it helps if anything goes wrong
Reading points 2nd and 3rd of yours seems like desperation for Completing sales targets.
Anyone with decent financial knowledge will suggest otherwise on points 2 and 3.
But yea, as you mentioned you are a manager at bank i can understand as while i was purchasing a term plan, agent was pushing very hard for these 2 things.
Am an employee in LIC, I'll sound biased, but there are many reasons to buy a term insurance from LIC despite being expensive.
For term insurance
1.Always go for medical test by the insurer, before purchasing & keep one copy of medical test with your insurance bond.
Let everything be clear & transparent between you & the insurance company
Later they can't deny the claim on the basis of undisclosed facts (disease).
2. Always go for yearly premium & upto the age of your retirement/the age at which you gather sufficient assets, dont take the tenure longer like 75/80 years
At this age you are supposed to have sufficient assets for your dependants
3. For selecting insurance company, either take the insurance from the company quoting the least premium or the company you are comfortable with
4. Dont complicate the product with unnecessary & fancy add ons
5. Dont go for return of premium option.
6. Keep in mind that as per section 45 of insurance Act, 2015, Insurance company cant repudiate or reject claim for any reason after 3 years
7. Inform your nominee about the insurance..
Most term insurance companies dont ask for medical ( just self declaration is sufficient) for their exsting customers ( like icici pru term insu for icici bank customers)to the extent of some specific max amount..say 50L..
As per Section 45 of the Insurance Act, 1938, an insurer has only three years to call a policy in question. After the expiry of three years, an insurance company cannot deny any claim on any ground whatsoever.
The National Consumer Disputes Redressal Commission (NCDRC) had held that insurance claim cannot be denied on the ground of common lifestyle diseases such as diabetes or hypertension.
"insurer has only three years to call a policy in question."
So can I hide my current health condition and hope that the insurer doesn't find it out for next 3 years?
- Sure
Will they still decline the claim when they find out about wilful non disclosure?
- Certainly
Can my dependents sue them then?
- Yes
That means, they will get the money eventually.
- of course, in 10-15 years once they win the case
Do you really want your dependents to go through that? Just search the internet, it's full of such stories.
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See my detailed post above in one of the replies - basically don't go for return of premium or whole life insurance etc. For most people, a combination of term insurance for insurance needs and investments for remaining money saved works out better than chosing an insurance policy which has both. Keep your insurance needs and investment needs separate. You will also have a better liquidity this way in case of emergency fund crunch rather than locking your money in insurance product which offer investment/return of premium etc.
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This is what I love DD for. Enlightening and transparent thoughts. ❤️
>> By the time you’re in your 60s or 70s—your dependents would be financially stable & can take care of themselves & your spouse.
Times are changing. Better to have longer duration. The difference is about ~6K per annum between a 60yr and 70yr 2Cr term insurance.
The main mistake I think is too much thinking and dilly dallying to purchase one.
Don't take term insurance beyond 65 years. If your child knows about it he can make you die sooner
For term insurance
1.Always go for medical test by the insurer, before purchasing & keep one copy of medical test with your insurance bond.
Let everything be clear & transparent between you & the insurance company
Later they can't deny the claim on the basis of undisclosed facts (disease).
2. Always go for yearly premium & upto the age of your retirement/the age at which you gather sufficient assets, dont take the tenure longer like 75/80 years
At this age you are supposed to have sufficient assets for your dependants
3. For selecting insurance company, either take the insurance from the company quoting the least premium or the company you are comfortable with
4. Dont complicate the product with unnecessary & fancy add ons
5. Dont go for return of premium option.
6. Keep in mind that as per section 45 of insurance Act, 2015, Insurance company cant repudiate or reject claim for any reason after 3 years
7. Inform your nominee about the insurance..