How to buy your first life insurance policy?

Term life insurance, which comes with no exclusions except for suicide in the first year, is the simplest, cheapest and best form of life insurance. But the most important question is how to buy a good term plan. As per Kapil Mehta, co-founder, SecureNow, you have to make four decisions while buying term insurance: how much sum assured you need to buy, which insurer to select, how to buy the insurance and what information you should declare to the insurer at the time of filling the proposal form.

There are many complicated and scientific methods to find out the required sum assured, but Kapil Mehta suggests insurance buyers should aim to buy a sum assured worth 10 times their current annual income . "10 is not a magical number. With experience, we know if something happens to the earning family member today, it takes around 10 years for the family to be financially stable," he says. You may reduce or increase the multiple of 10 as per your financial condition and needs, he adds. However, 10 times is a good starting point.

Mehta also explains how to buy a good insurer and whether you should go directly to the insurer or buy life insurance, though he believes one should not spend too much time deciding on it. He also suggests buying a term plan when young and not forgetting to renew it. "As we grow older, we tend to develop medical issues like diabetes, thyroid-related conditions, hypertension and so on. While some insurers may charge additional premiums then, some others might completely refuse to offer a term plan basis medical condition," says Mehta. He also discusses the information that is required to be disclosed while filling out the proposal form. As per Kapil Mehta, you can't make drastic mistakes while buying a term insurance plan.