Warren Buffet’s Rule No.1: Never lose money


Warren Buffet’s Rule No.1: Never lose money.

Rule No. 2: Never forget rule no.1

So, how do you ensure your entire life’s wealth doesn’t vanish within a few years of your demise?

Term Insurance!

Here’s the ULTIMATE GUIDE to select a TERM LIFE INSURANCE plan.

1) Policy duration

Your term plan is your financial replacement. You only need it till your kids are financially dependent.

So, go for a plan that covers your family till your kids are well-settled. It’s much cheaper & premiums shoot up if your plan is beyond the age of 70.

2) Policy Cover

Keep these things in mind:

Annual income
EMIs & loans
Daily expenses (rent, bills, other insurance premiums)
Kids’ school & college fees
Existing life insurance
at 6% inflation, your 1CR cover will be equivalent to 4.5L in the next 50 years.

PS Check your ideal term cover using @joinditto ’s Term Cover Calculator- bit.ly/3NJijIJ

3) Riders
You can make your term plan more comprehensive by getting these add-ons a.k.a riders

3.1) Life Stage–

Allows you to increase your cover by a certain amount during life-changing events like marriage or kids.

3.2) Waiver of Premiums–

This allows you to keep your policy without having to pay premiums in case you get disabled in an accident.

3.3) Critical Illness–

The insurer will pay you some amount early to battle a critical illness.

Now, how do you pick the insurer?

1) Claim Settlement Ratio (CSR)

The ratio of the no. of claims the insurer settled & the claims they received.

You should choose an insurer with higher chances of claim settlement.

If CSR >= 99%, you have a winner;

Above 90% is pretty good.

But below 70% is surely a no-go.

2) Amount Settlement Ratio (ASR)

Similarly, you’ve got the ASR i.e. amount settled by the insurer/amount claimed.

You’re going to want an insurer that mostly settles your claim in full.

Any ASR above 90% is good enough;

Above 98% is a hit!

3) Complaint Volume

If the total number of complaints per 1000 claims is higher than 20, you might have to re-evaluate your options.

Now, that's most of what we consider while picking a term plan for you.

But..

IT’S STILL BEST TO ASK THE EXPERTS

If you’re thinking about getting a term plan, get on a FREE call with Ditto’s IRDAI-certified insurance advisors - bit.ly/43VEb9x
Backed by #Zerodha, they offer 100% honest & spam-free insurance advice.

sc: https://twitter.com/ipo_mantra/status/1672186159261270016?s=19

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