Term Insurance: ₹1Cr Cover Is Actually Worth ₹92L
Claim settlement ratio × sum insured = what your family actually gets. We calculated the risk-adjusted value for every major term plan.
₹1Cr term plan — risk-adjusted value
8% probability of rejection
Why 100% of term claims aren't paid
The 8% rejection rate comes from: non-disclosure of pre-existing conditions (biggest reason), death within waiting period, suicide within exclusion period (usually 1 year), and documentation gaps. If you disclose everything honestly and survive the first year, your effective settlement rate is closer to 97–98%.
The cheapest plan isn't always the best
A ₹1Cr plan at ₹600/month with 88% CSR gives you ₹88L expected value. A ₹1Cr plan at ₹750/month with 96% CSR gives you ₹96L expected value. The extra ₹150/month (₹1,800/year) buys your family ₹8L more in expected payout. That's a 4,444x return on the premium difference.
Riders: mostly not worth it
Accidental death rider, critical illness rider, waiver of premium — insurers push these hard because they're profitable. Most riders add 20–40% to your premium while covering low-probability events. A separate critical illness policy is usually cheaper than a rider. Accidental death benefit duplicates what your base term cover already provides.
What to do
1. **Disclose everything** — non-disclosure is the #1 reason for claim rejection. Be honest about smoking, drinking, medical history.\n\n2. **Choose an insurer with CSR above 95%** — LIC (97%), HDFC Life (96%), ICICI Prudential (96%), Max Life (95%).\n\n3. **Skip riders** — buy a simple, high-cover term plan. Add critical illness separately if needed.\n\n4. **Buy early (age 25–30)** — premiums are 50–60% cheaper than at age 40.