Article
How much term cover is enough? Three methods, compared
Term insurance replaces the income your family would lose. Three common ways to size the cover, with one family’s numbers worked through.
4 min read
Topic2 pieces · 7 terms
Protection, before growth
Insurance is protection, not an investment. Term life cover replaces income if the unexpected happens; health cover keeps a hospital bill from undoing years of saving. The useful questions are how much cover, for how long, and what the policy actually excludes.
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Health insurance basics: waiting periods, co-pay and sub-limits
Most health insurance surprises come from a few clauses. What waiting periods, co-payments, sub-limits and room-rent caps mean in practice.
5 min read
Glossary
Key terms
The words you’ll meet most often in this topic, defined in a sentence. Each links to the full definition.
Term insurance
Pure life insurance that pays a fixed amount to your nominees if you die during the policy term, with no payout if you outlive it.
Health insurance
Insurance that pays for hospitalisation and related medical costs, up to a sum insured, under your policy’s terms and exclusions.
Sum assured
The cover amount in a life insurance policy — what the insurer agrees to pay your nominees on a valid claim.
Human life value
An estimate of the economic value of your future income to your family — a common way to size life insurance cover.
Claim settlement ratio
The share of claims an insurer settled out of the claims it dealt with in a year — one indicator of how it handles claims.
Co-payment
The share of each health insurance claim you agree to pay yourself, such as 10% or 20%, with the insurer paying the rest.
Waiting period
A period after a health policy starts during which some conditions are not covered, such as pre-existing diseases or specified illnesses.
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There is no single right number. A common approach adds up what your family would need without your income — years of household expenses, outstanding loans and future goals such as education — and subtracts your existing investments and cover. Another estimates the value of your future income, known as human life value. The Insurance Cover Calculator shows both methods with every assumption visible.
Term insurance is pure protection: it pays only if you die during the term, so a modest premium can buy a large cover amount. Savings-oriented plans combine some life cover with a maturity or investment component, which usually means much lower cover for the same premium, plus longer commitments and surrender costs. Many people prefer to keep protection and investing separate; either way, compare the cover, costs and terms.
Employer cover is valuable, but it usually ends when you leave the job, may have a modest sum insured, and may not cover parents or your later years. A personal health insurance policy stays with you, and its waiting periods start running from the day you buy it — so starting earlier means they are behind you by the time you may need the cover.
Non-disclosure can lead to a claim being rejected or the policy being cancelled. Under IRDAI’s 2024 rules, once a health policy has run continuously for 60 months, the insurer cannot contest a claim on grounds of non-disclosure or misrepresentation, except for established fraud. Honest disclosure at purchase is the simplest way to protect your cover; pre-existing conditions are then covered after their waiting period ends.
Next step
Try it with your own numbers.
Every assumption is visible and yours to change. Results are illustrations, not promises.