When you have the right term insurance policy, you can rest assured that it will act as a financial cushion for your loved ones.
While buying a term insurance plan may seem easy, given the plethora of options available in the market, choosing the right one can be tricky. The following tips will surely help you in choosing the best term insurance plan in India.
Understanding Term Insurance
While a term plan is one of the most straightforward forms of life insurance, make sure you understand the basics as well as the details. Choosing the best term plan will be easier if you comprehend its different aspects. Make use of the internet to research the types of cover, the tenure, the premium paying terms etc.
Tip: Do not miss reading the policy document in detail before finalising the plan.
Examine your term insurance objectives - consider your age, liabilities:
Every individual has varied objectives. You must plan the term insurance objectives with the aid of life insurance coverage. Let's say your priority is to ensure financial stability for your family. Then you should choose a term life insurance policy with high coverage and sum insured considering your age and dependencies.
Tip: The younger you are, the lesser would be the premium you pay, so buy a suitable term plan as early in life as possible.
Determine the level of coverage you require:
As per most financial advisers, term insurance coverage should be at least 10-15 times your yearly income. However, if you can afford it, then 15-20 times is a better option. While determining the optimal term insurance plan, you need to focus on various factors such as:
- The overall debts on you and the expenditures of clearing off loans and liabilities
- A sum of money that needs to be kept aside for your child's future expenditures like higher education, marriage, etc
- Yearly expenditure of your family multiplied by years for which it may require earning replacements.
Tip: Make use of an online term insurance calculator to get a fair idea of the coverage you should opt for.
Compare different options to get the best deal:
While choosing the term insurance plan, you must compare varied policies to discover the best protection at a price that works for your budget. In addition, you ought to consider your premium-paying period in light of your expected future income. Our online portal will give you the best possible options that suit your requirements and offer the best term insurance plan to choose from.
Tip: While suggestions from friends and family can give you some direction, choose a plan that suits your specific needs and goals.
Choose the most effective term:
The period for which the insurance company offers you life coverage is called the term of the insurance plan. It can range from 5 years to as long as the insured individual is alive. You need to chalk out your goals and liabilities and then choose a tenure that would best support your loved ones if an unfortunate incident occurs.
Tip: Choosing the longest possible tenure is often recommended.
Choose the best insurance provider:
When you opt for a term insurance plan, you must choose a reputable insurance provider with the highest claim settlement ratio (CSR). It shows the ratio of claims settled by the company in a particular financial year.
Tip: You can check IRDAI’s official website and view the accurate CSR of top insurance companies in India.
Mindfully choose the best rider/add-ons:
Riders increase the protection of their term insurance. Hence, you must opt for proper riders. Different companies offer different options covering critical illnesses, accidental death etc.
Tip: Choose riders mindfully based on your needs, don’t choose any rider randomly.
Never conceal any information from your insurance provider:
You should hide no information from your insurance provider, such as pre-existing diseases, consuming tobacco, or alcohol, working profession of a hazardous industry, and so forth. It can cause the rejection of your claim.
Select a comprehensive policy and keep evaluating:
Medical emergencies can poorly affect your finances. Hence, you must choose a comprehensive plan that includes critical illness coverage, terminal illness, accidental death or disability benefits, waiver of premium benefits, and so forth.
Tip: Keep re-evaluating your insurance needs. If at any point you feel you need more coverage, you may opt for one/ more life insurance plans.
Choosing the best term insurance plan is a serious and important matter. If you feel you are unable to make the right choice, do not hesitate to take professional help.