Life Insurance in India

I've been looking around to buy some life insurance: about time one thought of financial security for the family....

Here's what I need: insuring my family and perhaps me against loss of income. That includes any event that impacts my earning in my profession.

As I'm doing my research, I found some interesting points:

• There is a huge variation in premiums between companies. For a 25 year term, 20 lakhs coverage at 30 years of age, it varies from Rs. 6000 to 12000! In this kind of business, why would anyone go for the higher premium? All companies are well established, and all have similar contracts. When asked this question, the costlier ones have little to say except the vague 'our service is better'. That means nothing: anyone can claim that!
• The concept of disability insurance does not exist. When asked about that, people offer the ADD (accidental death and dismemberment), which hardly covers disability.
• Riders: Generally, they offer three: ADD, critical illness, and WOP-(withdrawl of premium, I think). I don't quite understand any of them.
• ADD: In this case, you get double the face amount in case you die in an accident. If the idea is to cover death which comes without warning, it probably makes sense. But I think they don't cover all such cases, for instance, terror attack or natural calamity. If that's the case, what's the point of buying a higher cover for accidental death?
  
• ADD: Moreover, why not allow me the option of buying dismemberment insurance without being forced to buy accidental death as well?
• critical illness: This one seems to have wandered into the wrong business. They pay out the cover if you suffer with a list of pre-defined illnesses. This includes non-systemic ones such as heart attack. You might not have lost your income. This sounds totally like a health insurance product! Actually, not even that - they are not covering treatment expenses: just paying out the cover!
• WOP: Ensure that your cover remains if you stop paying premium. Now why would anyone need this? The only situation where you will stop paying premium is if your income stops. And if your income stops, life insurance is meaningless to you!
• It is extremely difficult to get insurance agents to understand that I'm only interested in risk cover: they keep throwing investment cum insurance policies at you! Some even insist that in their plan, risk cover is 'free'!!! A lot claim that in a given investment plan, I would get minimum 10-12% returns. And the way they say it, one would reasonably assume that it is guaranteed return, and that's what they want you to assume. But mention that word, and the truth comes out.

All of these suggest to me that the insurance business in India has a lot of growing up to do - it is still very early days.

And I'm going to have to live with the risk of a long term disability...