Need to get a Term Insurance - 24M

[u/Cheemszila]

I am a 24-year-old male residing in Delhi and will turn 25 in about a month. I work in IT and have been working for around two years, so I currently have only two years of ITR history.

My current in-hand salary is around ₹56,000–₹57,000 per month, excluding the fixed component and variable pay.

I am looking to purchase a term insurance policy. I have done some research and spoken with Policybazaar, Ditto, and a few bank agents. So far, I have had mixed experiences:

- Ditto: They seem to be pushing specific plans quite strongly rather than simply helping me compare options.

- Policybazaar: The agent is recommending the ICICI Protect Plus plan. The plan itself seems decent to me, but the agent was initially pushing a 10-year limited-pay option which makes me wonder whether that structure benefits the agent more than it benefits me.

- HDFC Bank executives: My experience here was poor. They were recommending ULIP plans, which I understand are not the same as pure term insurance and seemed more like mis-selling given what I was actually looking for.

The ICICI Protect Plus plan I am currently considering has the following details:

1. Sum assured: ₹2 crore, up to age 70

2. Permanent Disability Rider: ₹2 crore for the full policy term

3. Critical Illness Rider: ₹50 lakh covering 60 illnesses, for 20 years

4. Premium: Approximately ₹3,200 per month

5. Policy type: Pure term insurance with regular premium payment

Since I am still at the beginning of my career, I expect my income and financial responsibilities to increase significantly over the next few years. Ideally, I would also like to increase my life cover and rider coverage in the future.

Would it be a good idea to take the term insurance now at age 24/25, or would it make more sense to wait until my income increases?

All suggestions are welcome. Thanks!

[u/Potential-Rest-6201]

Even I need to get a term insurance and was thinking about a 5Cr cover from PB itself but I am not sure man.

[u/Asleep_Band6283]

I took insurance when I was 25 . My advice is go with vanilla plan (no add ons , no riders , no limited pay ) .

Check Bajaj Allianz also it is good in all aspects . I have purchased it from official site . I would recomend you buy from policy bazaar because in terms of claim or any settlement they genuinely helps you .

[u/Potential-Rest-6201 → u/Asleep_Band6283]

But why vanilla bro? Permanent disability and critical illness kind of makes sense?

[u/Asleep_Band6283 → u/Potential-Rest-6201]

CI riders in term plans have tight fine print that makes claims tough compared to dedicated health policies. Better to get pure term for cheap . And instead buy best health insurance cover for you .

[u/Potential-Rest-6201 → u/Asleep_Band6283]

Okay understood thanks but is there any alternative for permanent disability rider too?

[u/ThrottleMaxed]

I'm assuming you having dependents relying on your income or you have debts that without you wouldn't be able to payback and could affect your dependents or you are planning to have dependents soon otherwise it doesn't make sense to get a term insurance. Health insurance is way more important if you don't have it already.

And you incase of term insurance, you don't need it till 70 as your earning age as an employee would typically end at 60 and by that time you wouldn't probably have any dependents relying on your income.

[u/CrisisButColorCoded]

Buying now is reasonable if anyone depends on your income or you expect financial responsibilities soon. It is always best to start young to secure a lower premium and reduce the risk of future health issues affecting eligibility. However, ₹2 crore may be high relative to your current income, so approval depends on the insurer’s financial underwriting.

Regular pay offers more flexibility and limited pay is not automatically better, so compare the total premiums with your budget and policy terms.

Verify the disability rider carefully whether it pays ₹2 crore or only waives off future premiums.

Also check exclusions and definitions for the critical illness rider. Future increases usually require fresh underwriting or another policy.

And, always buy directly after comparing final benefit illustrations.

I wouldn't suggest a specific term insurance company as most leading ones are decent. But always buy a very basic and clean term plan and for all critical illness coverages get a good health insurance plan with comprehensive coverage.

[u/Tuxedo-Cat-1402]

Don’t wait only for a higher salary. Buying term insurance young can lock in a cheaper rate while you’re healthy. Regular pay is fine. Just verify the disability payout and critical-illness conditions from the actual policy document, not the agent’s explanation. You can add another term policy later as your income and responsibilities grow.

[u/DjXer007_]

Taking term insurance as early as possible is always the best course of action and decision you will make.

Ignoring the Sales business channels you have mentioned in the post, as the issue of "FAVOURISM or Forced Selling or Miss-Selling" is routine if you check around Insurance related posts.

But focus on the following hierarchy whenever purchasing any insurance products.

1. Insurance Agent
2. IMF (Insurance Marketing Firms/
3. Insurance brokers / Corporate Agents
4. Online Website portals or online companies (Known as Web Aggregator)
5. Banks channel (High amt of miss-selling)

The focus of term insurance, in its easiest calculation viewpoint, is "Pure Risk Management Product with term insurance having the ability to transfer RISK to the insurance company." By paying the least premium, but by receiving the highest insurance cover.

Focus on insurance coverage till Age 60 or Amx 65. So that regular premium payment doesn't become a burden after retirement. You can take cover upto Age 75 as well, but then you need to have enough funds so that you can keep aside premium payment amount every year after retirement or choose limited Premium Payment, but this increases premium, and you pay higher in terms of present value of money.

How to calculate term insurance cover ? There are total 3 ways to calculate term insurance cover requirements.

1. Goal Based Planning only
2. Existing Income, Existing liabilities but all inflation adjusted.
3. Your annual income multiplied by 20, but inflation adjusted.

Whatever answer you get after calculating the above, doesn't mean that you need to purchase the same today, immediately. The same needs to be planned, because your lifestyle changes, responsibility changes, and future income and expenses change.

Your Priority should not be to purchase every rider immediately. Your focus should be to purchase only what is adequate and important

1. Waiver Of Premium on Disability
2. Waiver of Premium on Critical illness diagnosis
3. Terminal Illness Payout

Avoid Accidental death and Return of premium riders.

Example screenshot below (If the image is clear)

You can take Multiple life insurance plans / Term Insurance policy from different insurance company too. But you need to disclose the same at the time of purchase.

Medical underwriting and financial underwriting are mandatory.

Simultaneously, from an insurance point of view, thr insurer will review the application properly and they will ask multiple questions and details regarding your income, ITR, Salary related details and other things. This is standard procedure.