Is my term insurance adequate?

I am married. My wife and children (2 daughters aged 5 and 3) are dependent on me. My monthly income is ₹75,000. I have a home loan of ₹22 lakhs and ₹20 lakhs is covered by a home loan protection plan. I already have HDFC Click2protect term insurance for ₹50 lakh. Is it adequate for me or do I have to go in for more coverage?
- Joseph

The way to go about deciding a term plan is to calculate how much cover you need and then to find a good, low-cost, term insurance. The only reasonable way of making this decision is to unemotionally create a financial plan that your family should follow if you die suddenly. A commonly used rule of thumb to calculate your required cover is ten years' income, but there could be other factors influencing it. Some of these factors could be whether you own a house or other property, have any liabilities, what kind of income your spouse or other family members have and how many children you have whose needs you need to take care of. Based on these factors, you may be underinsured. It will be wise to buy additional term cover. You can increase your cover by at least another ₹50 lakh.

Term plans can be selected after considering an insurer's claims ratio in the past as well as premiums charged as compared to other term plans. Find the premiums applicable to your age under all these policies and select the one that suits your budget. Disclose all the details while filling proposal form to avoid any inconvenience in case of a claim.

You may consider Max Life Online Term plan for a sum assured worth ₹50 lakh or more. The claim settlement ratio and grievance resolution ratios of Max Life Online Term plan were 98.63 and 99.98 percent respectively. Find out the premiums applicable for your age.