The Ultimate Guide to Buying Life Insurance (Part I)

You've probably found yourself lying in bed late at night, "Is my family's future secure?" You’re not alone in this. But breathe easy, life insurance is the silent guardian ensuring your family's financial safety.

Welcome to our two-part guide where we try to demystify the vast universe of life insurance. In Part I, we decode the most commonly used terminologies, or jargons, and in Part II, we’ll dive into the menu of insurance plans you can pick from.

Understanding Life Insurance Lingo

Life Cover: Imagine a guaranteed safety vault filled just for your loved ones. It’s what the insurance folks hand over to your family in case of your untimely demise.

Insurance Premium: Your subscription to peace. A small fee to ensure that vault (Life Cover) is locked and ready.

💡 Spotlight: Bandhan Life’s iTerm Prime offers significant coverage without breaking the bank. Worth a peek!

Policy Term: This is the duration your insurance policy is active. Think of it as the "expiry date" on this promise between you and the insurance company. Aim for it to span your earning years, ensuring your key responsibilities like children’s education, loans, saving funds for future, etc. are covered.

Premium Term: The time you'll be paying for the policy. It can be shorter than the policy term, offering flexibility. Imagine a Netflix subscription where you pay for a year but get to binge-watch for two!

Payment Frequency: How often you make those payments: monthly, quarterly, or yearly.

Riders: Extras on the menu - like adding fries to your burger. A few examples - a critical illness cover helps with big health bills; the accidental death benefit gives more support in case of an unexpected accident; the waiver of premiums, if you get sick, you won't have to pay anymore. Customize your policy with these and many other riders which fit your individual needs.

Nominees: The chosen ones who'd receive the insurance amount. It could be family, friends, or anyone you trust. If your nominee is a minor, you would need to assign an appointee who would receive the claim amount on the minor’s behalf.   

Claim Settlement Ratio (CSR): A crucial metric indicating the insurer's reliability. A higher percentage means they're more likely to settle claims.

💡 Spotlight: Fun Fact, Bandhan Life has a CSR of 99.37%!

Insurance Underwriting: Before issuing an insurance policy, an insurance company does its homework, carrying out financial verification health and lifestyle checks. This is done to assess your eligibility and filter out fraudulent applications. As pioneers in digital insurance, we at Bandhan Life, have switched to digital underwriting, which has made buying life insurance as easy as buying a T shirt online.

Stay with us, as in Part II, we'll guide you through the rich tapestry of insurance types, helping you find your perfect fit.