5 Things to Check in Your Term Insurance Today

You have term insurance. Good.

But when did you last open that policy document?

For most people, the answer is “when I bought it.” That could be 5, 10, or 15 years ago.

Your life has changed since then. Your income is higher. You have more responsibilities. Maybe you have children now. Maybe you have a home loan.

But your insurance coverage? It’s frozen in time.

This quick audit will tell you if your term insurance is actually protecting your family, or if it’s just a feel-good checkbox.

Open your policy document. Let’s check.

1. Is Your Coverage Still Adequate?

The most common problem: coverage that made sense years ago doesn’t make sense now.

The Quick Math

Your term insurance should be 10-15x your annual income. That’s the minimum.

Your Annual Income	Minimum Coverage
₹10 lakhs	₹1 crore
₹20 lakhs	₹2-3 crores
₹30 lakhs	₹3-4.5 crores
₹50 lakhs	₹5-7.5 crores

Check your policy: What’s the sum assured? Divide by your current annual income.

If the result is less than 10, your coverage is probably inadequate.

Why 10-15x?

This multiple ensures your family can:

• Replace your income for 10-15 years
• Pay off major debts (home loan, car loan)
• Fund children’s education
• Handle inflation over time

Real Example

Rahul bought ₹1 crore term insurance in 2015 when he earned ₹8 lakhs annually. Perfect - 12.5x coverage.

In 2025, Rahul earns ₹25 lakhs. Same ₹1 crore policy. Now it’s only 4x his income. If something happens to Rahul, his family gets 4 years of replacement income instead of 12.

Rahul’s coverage is dangerously inadequate. He just doesn’t know it.

What About Loans?

Add your loan balances to the calculation.

If you have a ₹50 lakh home loan and your family needs ₹2 crores for living expenses, you need ₹2.5 crores minimum coverage.

Some people buy separate “loan protection” insurance through banks. That’s fine, but check the terms and whether it’s more expensive than just increasing your main term policy.

Action

If your coverage is below 10x income + outstanding loans, you need more insurance. Get quotes today. Every year you wait, premiums go up.

2. Is Your Nominee Updated?

Your policy probably names a nominee. Is it the right person?

Common Problems

Parents as nominees when you’re married: Many people buy term insurance before marriage. The nominee is usually a parent. After marriage, they forget to update.

If you die with your mother as nominee and your spouse isn’t named:

• Your mother receives the payout
• She legally holds it as trustee for legal heirs
• Could create family tension or legal disputes

Ex-spouse still named: After divorce, people often forget to update insurance nominees. Your ex could receive the payout.

Nominee has passed away: If your nominee dies before you and you don’t update, the claim process becomes much more complicated for your family.

How to Check

Look at your policy document or log in to your insurer’s portal. Find the nominee section.

Ask yourself:

• Is this person still alive?
• Is this person still the one I want receiving the money?
• If I have multiple beneficiaries in mind, are they all named?

Updating Your Nominee

Most insurers allow online updates:

1. Log in to insurer portal
2. Go to Policy Services → Nominee Update
3. Enter new nominee details (name, DOB, relationship, address)
4. E-sign or complete verification

For offline updates, download Form A (standard endorsement form) from your insurer’s website.

Save the acknowledgment. It’s your proof of update.

Read more: When and How to Update Your Nominees

3. Are You Paying Too Much?

Term insurance premiums have dropped significantly over the past decade. If you bought 5+ years ago, you might be overpaying.

The Trend

Competition and better mortality data have reduced premiums. A ₹1 crore policy that cost ₹15,000/year in 2015 might cost ₹10,000/year today for the same age and health profile.

But Here’s the Catch

You can’t just switch policies. Your health status may have changed. You’re older now. And early termination of existing policies may have penalties.

What to Do

1. Compare current market rates: Use comparison sites like Policybazaar, Coverfox, or insurer websites. Get quotes for your current age and coverage amount.

2. Consider buying additional coverage: If you need more coverage anyway (see point 1), buy a new policy at today’s rates rather than increasing your old one.

3. Don’t cancel your existing policy: Keep your old policy running. If health issues have developed since you bought it, you may not get coverage at good rates (or at all) on a new policy.

4. Check for premium discounts: Many insurers offer discounts for:

• Annual premium payment (vs monthly)
• Online purchase
• Non-smoker status
• Healthy BMI

When It Makes Sense to Reevaluate

• Your old policy has very high premiums for the coverage
• You’re still in good health
• You haven’t had any major medical issues since buying

Even then, don’t cancel old coverage until new coverage is active.

4. Do You Have Riders That Matter?

Riders are add-ons to your base term insurance. Some are valuable; others are marketing gimmicks.

Riders Worth Having

Critical Illness Rider: Pays a lump sum if you’re diagnosed with specified illnesses (cancer, heart attack, stroke, etc.). This money comes while you’re alive, helping with treatment costs.

Check: Does your policy have this? What illnesses are covered? What’s the waiting period?

Accidental Death Benefit Rider: Pays an additional sum if death is due to accident. Usually cheap to add.

Check: Do you have this? Is the additional coverage meaningful?

Waiver of Premium Rider: If you become disabled and can’t work, the insurer waives future premiums but keeps your coverage active.

Check: Do you have this? What qualifies as disability?

Riders to Be Skeptical About

Return of Premium: You get premiums back if you survive the policy term. Sounds great, but you pay 2-3x higher premiums. That money would grow much more if invested separately.

Hospital Cash Rider: Pays daily cash during hospitalization. Usually better covered by health insurance.

What to Check

Look at your policy document’s “rider” section. Note:

• Which riders you have
• Their coverage amounts
• Their conditions and exclusions

If you don’t have critical illness coverage and can afford the added premium, consider adding it.

5. Does Your Family Know How to Claim?

This might be the most important check of all.

Your term insurance is useless if your family doesn’t know:

• That it exists
• Where the policy document is
• How to file a claim
• What documents they’ll need

The Claim Process Overview

When you die, your family needs to:

1. Inform the insurer within 24-72 hours (varies by insurer)
2. Submit death certificate and claim form
3. Provide policy document and ID proofs
4. Wait for verification (usually 30-90 days)
5. Receive payout to nominee’s account

See detailed guides: LIC death claim process, HDFC Life death claim, Term insurance claim process

What Your Family Needs to Know

Tell them these things:

1. You have term insurance (insurer name and policy number)
2. Where the policy document is stored
3. The nominee’s name (confirm it’s them)
4. The insurer’s claim helpline number
5. Your agent’s contact (if applicable)

Store these documents together:

• Policy document (original or copy)
• Premium payment receipts
• Agent contact details
• Your recent medical records (may be needed)

A 5-Minute Conversation

Sit with your spouse or nominee and say:

“I have term insurance with [Insurer Name]. The policy number is [X]. If something happens to me, the document is [location]. You’ll need to call [number] and submit a death certificate to claim. The sum assured is ₹[X] crores.”

That’s it. Five minutes that could save your family weeks of confusion during their worst time.

Your Term Insurance Audit Checklist

Run through this in 10 minutes:

Coverage

• Sum assured is at least 10x annual income
• Sum assured covers outstanding loans
• Policy term extends until retirement age (or children are independent)

Nominee

• Nominee is still alive
• Nominee is the right person (spouse/dependents)
• Nominee details are current (address, phone)
• You have acknowledgment of any updates

Premiums

• Compared with current market rates
• Premiums paid up to date (no lapse)
• Premium mode is optimal (annual cheaper than monthly)

Riders

• Know which riders you have
• Critical illness rider in place (if affordable)
• Understand what’s covered and what’s excluded

Family Knows

• Spouse/nominee knows the policy exists
• Policy document location is shared
• Claim process is understood
• Insurer contact info is accessible

What If Your Policy Falls Short?

If your audit reveals problems, here’s what to do:

Coverage Too Low

Get quotes for additional term insurance. Don’t cancel your existing policy—just add more coverage.

At 40, a healthy non-smoker can get ₹1 crore additional coverage for approximately ₹15,000-20,000/year. Prices vary by insurer and medical history.

Nominee Needs Updating

Update today. Most insurers allow online updates. Don’t wait.

Riders Missing

Contact your insurer to add riders. Some allow mid-term additions; others require a new policy.

Family Doesn’t Know

Have the 5-minute conversation today. Write down key details and store with important documents.

Frequently Asked Questions

How often should I review my term insurance?

Annually, plus after any major life event (marriage, children, home purchase, significant salary increase).

Can I increase coverage on my existing policy?

Some policies allow it; most don’t. You’ll likely need to buy a new policy for additional coverage.

Should I buy term insurance from the same insurer?

Not necessarily. Compare quotes. Different insurers may offer better rates depending on your current profile.

What if I’ve developed health issues since buying my policy?

Keep your existing policy. If you need more coverage, you may still get it but at higher premiums or with exclusions for specific conditions.

How do I know if my insurer will actually pay?

Check the insurer’s claim settlement ratio (CSR). Look for 95%+ CSR. Also check average claim settlement time. This data is published by IRDAI annually.