Do your research well before buying a life insurance plan for the long run

Customers must also avoid the temptation to cash out of their policies mid-tenure, once they have gathered considerable fund value.

The Insurance Regulatory and Development Authority of India (IRDAI) chairman Subhash Chandra Khuntia recently urged insurers to improve their persistency ratios. This figure refers to the percentage of policies sold that gets renewed each year. According to the IRDAI’s Handbook of Indian Statistics (2018-19), the insurer with the best 61-month figure had a persistency ratio of 53.3 per cent. Others fared worse. Khuntia asked insurers to aim for a 13-month persistency ratio of 90 per cent and a 61-month persistency ratio of 65 per cent. 

Poor fit results in high lapse rates 

Policies often lapse because buyers realise a year