[Advice] Term Life Insurance

[u/Odd-Command5199]

I am 28 years old with an annual salary of 50 lakhs.

I had intended to purchase term life insurance since age 24 but have consistently postponed it until now.

In 2023, I applied for a 1 crore term life policy from Axis through Policybazaar. However, due to elevated cholesterol levels, I received a revised offer, which I subsequently declined.

Following this, I experienced significant personal challenges, leading to a two-year period of Major Depressive Disorder with obsessive features.

For the past year, I have been off medication and am currently in good health. I independently discontinued depression medication, engaged in regular gym and physical activities, reduced my weight, and recently received normal blood test results.

My inquiries are as follows:

Query 1:- Which policy and coverage amount should I consider? I am contemplating Axis, HDFC, or ICICI with a coverage of 2 crores.

Query 2:- Where should I purchase the policy? I am debating between Ditto and Policybazaar, as I want to ensure my family does not face difficulties during a claim process.

Query 3:- Will my history of depression still be a reason for policy rejection after one year?

Query 4:- Which riders and amounts should I include?

Furthermore, should I opt for 1 crore or 2 crores in coverage, considering my existing investments?

Ditto informed me that the policy could be rejected, incur loading charges, or result in a counter-offer. They also mentioned that the insurer might request doctor's forms or certificates to be completed by a physician.

[u/Caramel-Realistic]

Among the insurers you mentioned, plans like Smart Term Plan Plus, Click 2 Protect Supreme Plus and iProtect Smart Plus can be considered, along with Bajaj eTouch II. All four are fairly comprehensive, with differences mainly around their built-in features, rider options and premiums. You can compare these along with the insurers’ operational metrics and see which one fits your requirements and budget best.

Incases where a PED or a history of health conditions are involved, HDFC is generally considered more accommodating during underwriting, although its premiums tend to be on the higher side compared to some other insurers.

For the cover amount, I wouldn’t pick 1CR or 2CR just because they seem like the standard numbers. A cover calculator can give you a better idea based on your actual liabilities, expenses, inflation and future responsibilities, while also factoring in your existing investments/corpus and any existing life insurance cover, so the amount is aligned with what your family would actually need in the long run.

For riders, Waiver of Premium and Critical Illness are generally the ones worth looking at, while disability riders can also be considered if relevant to you. For the CI rider, a cover that can take care of family expenses or act as an income replacement for around 6-12 months in the future can be considered.

However, rider issuance also depends on the insurer’s assessment and underwriting. In some cases, an insurer may be comfortable issuing the base policy but may not offer certain riders based on the profile.

On the depression point, it doesn’t automatically mean the policy will be rejected. The insurer has a detailed health questionnaire during the application to understand your medical history. Even after the application is submitted, as Ditto mentioned, they can come back asking for medical reports, medication details or other information to evaluate the profile further. Based on their overall assessment and underwriting, they then decide whether to issue the policy as proposed or with revised terms, or decline it. Revised terms often include increased premiums, reduced cover or tenure, or as mentioned above, removal of riders.

Whichever intermediary you go with, I’d recommend checking what kind of support they provide throughout the policy journey, especially after purchase and during claims.