Understand the Plan

Before you buy insurance, be clear about the benefits. Go for it only if you understand the features, including the tenure, payouts, premium and surrender rules, and how it fits in with your needs.

Know the Tax Benefits

The premium paid for a life insurance policy is eligible for deduction under Sec 80C and any income accruing from it is tax-free under Sec 10 (10D). However, last year's Budget altered the rules. Know it.

What is the Tenure?

The tenure of the policy is almost as impor tant as the cover. If you are looking for a higher return, buy for at least 20-25 years. Ideally, one should have a cover that is at least 5-6 times one's annual income.

What are the Risks?

It is best to invest in Ulips via monthly or quarterly premium options, but this may not be open if you are planning to invest before Mar 31. You can go for debt option and shift small amounts to equity. Do Benefits Match Needs?

Plans offer a wide range of benefits. Not all are suitable for everyone. For instance, a young person with risng income will not benefit much from moneyback. So, make your choice properly.