Life is full of uncertainties, and while we cannot predict what the future holds, we can certainly prepare for it. One of the most effective ways to secure your family’s financial future is by investing in a life insurance plan. However, with the wide variety of options available in the market today, choosing the right plan can be overwhelming. 

To make a well-informed decision, it's important to understand the key features to look for in a life insurance plan. These features not only determine the quality and relevance of the coverage but also impact your long-term financial goals. 

In this blog, we’ll explore the essential aspects you should consider while selecting a life insurance policy. 

 

1. Adequate Sum Assured (Coverage Amount) 

The sum assured is the amount your nominee will receive in case of your unfortunate demise during the policy term. It is the cornerstone of any life insurance plan. 

When evaluating this feature: 

  • Choose a coverage amount that’s sufficient to support your family’s expenses, debts, education, and long-term needs. 

  • A good rule of thumb is to opt for a sum assured that is 10–15 times your annual income. 

  • Make adjustments for inflation and rising living expenses. 

Adequate coverage ensures that your loved ones maintain financial stability even in your absence. 

 

2. Policy Term That Matches Your Needs 

The policy term is the duration for which the life insurance plan provides coverage. It should align with your financial responsibilities and life goals. 

Consider the following: 

  • If you're buying a term plan, choose a tenure that covers your active income-earning years (typically up to 60 or 65 years). 

  • For savings or investment-linked plans, align the term with key milestones like your child’s education or retirement. 

A suitable policy term ensures your family is protected for the right duration, avoiding unnecessary gaps. 

 

3. Premium Affordability and Payment Flexibility 

A life insurance policy should not strain your finances. It’s important to choose a plan with affordable premiums and a flexible payment structure. 

Look for: 

  • Options to pay premiums monthly, quarterly, annually, or as a one-time payment (single premium). 

  • The ability to choose premium payment terms such as regular pay, limited pay, or single pay based on your budget. 

  • Discounts for annual payments or buying policies online. 

Affordability ensures that you can maintain the policy without defaulting or lapsing it over time. 

 

4. Claim Settlement Ratio of the Insurer 

A key indicator of an insurer’s reliability is its claim settlement ratio—the percentage of claims settled compared to claims received. 

When selecting a life insurance provider: 

  • Opt for companies with a high claim settlement ratio (preferably above 95%). 

  • Research the insurer’s track record in timely and hassle-free claim processing. 

  • Read customer reviews and testimonials to gauge satisfaction levels. 

A higher ratio builds trust and confidence that your family will receive the benefits without undue delays. 

 

5. Riders and Add-Ons for Enhanced Protection 

Riders are additional benefits that can be added to your base policy for a nominal cost. They help customize the plan according to your unique needs. 

Popular riders include: 

  • Accidental Death Benefit: Provides an extra payout in case of death due to an accident. 

  • Critical Illness Cover: Offers a lump sum if diagnosed with a major illness. 

  • Waiver of Premium: Future premiums are waived in case of disability or critical illness. 

  • Income Benefit Rider: Ensures a steady income for your family along with the lump sum payout. 

Adding the right riders can significantly enhance your coverage and provide all-round protection. 

 

6. Maturity and Survival Benefits 

While term insurance offers pure protection, endowment and ULIP (Unit Linked Insurance Plan) policies also provide maturity benefits—a payout if the policyholder survives the policy term. 

Choose a plan that: 

  • Aligns with your savings or investment goals 

  • Offers a guaranteed return (in case of traditional plans) or market-linked returns (in ULIPs) 

  • Includes bonuses or loyalty additions if applicable 

Maturity benefits help you build a financial corpus for future milestones like retirement, child’s education, or travel. 

 

7. Tax Benefits 

Life insurance plans also offer tax advantages, making them a smart part of financial planning. 

Here’s how: 

  • Premiums paid qualify for deductions under Section 80C of the Income Tax Act (up to ₹1.5 lakh annually). 

  • The death benefit and, in many cases, the maturity benefit are tax-free under Section 10(10D). 

Although tax benefits should not be the sole reason to buy insurance, they certainly add to the plan's value. 

 

8. Ease of Purchase and Customer Support 

Today, many insurance companies offer online policies that are quick and easy to purchase. But convenience shouldn’t end at the buying stage—excellent customer support is equally crucial. 

Look for: 

  • Simple online application and documentation process 

  • Responsive customer service for queries or claims 

  • Transparency in terms, conditions, and exclusions 

A hassle-free experience ensures that you can manage your policy efficiently and reach out when needed. 

 

Conclusion 

Choosing the right life insurance plan is one of the most important decisions you’ll make for your family’s future. By carefully evaluating the key features—such as sum assured, premium flexibility, riders, policy term, and insurer reputation—you can select a plan that provides long-term peace of mind. 

A well-structured life insurance policy does more than offer financial support—it reflects your commitment to protecting the people you care about most. Take the time to understand your needs, compare different options, and choose a plan that truly works for you.