Critical Illness Cover — Why It's Different From Health Insurance

A common rule is 10-15x annual income, but a needs-based calculation is more accurate. Total need = outstanding loans + future major expenses (children's education, marriage, parent care) + corpus needed to generate replacement income for the family's residual needs. Use the Trustner Human Life Value calculator on merasip.com for a personalised estimate, or speak to your Relationship Manager for a guided needs assessment.

Almost certainly not for a primary breadwinner with dependents and a home loan. Employer cover is typically 1-2x annual salary and is contingent on continued employment — if you change jobs or are between employment, the cover may lapse. Use employer cover as a supplement, not as the primary cover. Buy an individual term plan with a sum assured calibrated to your full needs.

Probably not large life insurance — your dependents do not yet rely on your income. However, if you have parents or siblings financially dependent on you, or significant loans (education loan, business loan), term insurance is appropriate. Otherwise, focus on health insurance (always relevant) and critical illness (highly recommended). Buy life insurance when you have dependents — typically when you marry or have your first child. Term insurance is cheaper at younger ages, so a small foundation policy in your late 20s makes sense if affordable.

ULIPs combine insurance and investment in a single product, but typically deliver poor outcomes on both. The insurance cover is small (₹3-5 lakh per ₹1 lakh annual premium for most products); the investment cost is high (premium allocation charges, mortality charges, fund management charges, policy admin charges all stacked). Net of all charges, the IRR after 10-15 years is often 5-7%, materially below mutual fund alternatives. The exception is for investors who genuinely will not maintain investment discipline outside of a forced-locked product — for them, the inferior outcome may still be better than no investment. For disciplined investors, separate term + mutual funds is structurally superior.

Online policies are usually 15-25% cheaper than agent-sold policies (no agent commission). However, ensure (a) the insurer has a strong online-policy claim track record, and (b) you complete medical underwriting fully and disclose all health information accurately — incomplete disclosure during online purchase is the leading cause of claim rejection. Trustner Insurance Brokers can assist with the application even for online policies, ensuring proper disclosure and choosing the right insurer for your profile.

Generally no. Return-of-Premium term plans charge 2-3x the premium of pure term, in exchange for "returning" your premiums if you survive the term. Mathematically, this is a poor trade — you are effectively earning a 4-5% IRR on the extra premium, far below mutual fund SIP returns. Buy pure term and invest the saved premium in mutual funds; the wealth accumulated is materially higher.

Some insurers offer "Cover Increase" options that allow you to increase sum assured at major life events (marriage, child birth, home purchase) without fresh medical underwriting. This is useful for younger applicants who expect future income growth. Alternatively, buy additional term policies as your income grows — premiums will be higher at older ages but the marginal cost is still acceptable. The mistake to avoid: postponing term insurance until you "have enough income" — premiums rise sharply with age, and you may become uninsurable if a health event intervenes.

Smokers pay approximately 50-80% higher premium than non-smokers for the same cover. Concealing smoking status during application is a serious risk — insurers test for nicotine in medical underwriting, and concealment is grounds for claim rejection. Always declare smoking honestly. The premium increase reflects genuine higher mortality risk; the math still works in favour of buying term. If you quit smoking, after 2-3 years of confirmed non-smoking you can apply for premium reduction (some insurers offer this).