1. Purpose of Insurance
   • Financial Security: Ensure the financial well-being of your dependents.
   • Specific Goals: Align the insurance with particular financial objectives.
   • Avoid Secondary Motivations: Don’t buy solely for tax benefits or other secondary reasons.
2. Coverage Amount
   • Rule of Thumb: Your life insurance coverage should be at least 10 times your annual income.
   • Estimation Tools: Use premium calculators to determine the appropriate premium for your desired coverage.
3. Policy Duration
   • Determine Tenure: The ideal policy duration is your ‘Retirement Age minus your Current Age’.
     • For example, if you are 35 and plan to retire at 65, choose a policy duration of at least 30 years.
   • Extended Coverage: Consider plans offering coverage up to an advanced age.
4. Additional Benefits
   • Riders: Consider options like critical illness riders, accidental death benefit riders, waiver of premium riders, and disability riders.
   • Cost-Effectiveness: These can be added for a nominal extra premium, enhancing the policy’s value.
5. Insurance Provider Credentials and Claims History
   • Claims Settlement Ratio: Check the percentage of claims paid by the insurer.
   • Assets Under Management (AUM): A higher AUM suggests a strong and well-performing portfolio.
   • Solvency Ratio: A higher ratio indicates better financial stability.
   • Customer Service and Reviews: Review customer feedback, service quality, and the company’s governance practices to get a comprehensive understanding of its reliability.

Considering these factors will help you make an informed decision when buying life insurance, ensuring it meets your needs effectively.