How to know the right term insurance plan for you?
November 18, 2019
What is a Term Plan?
A term insurance plan is a life insurance policy that provides extensive financial coverage to the beneficiary, against the premiums paid for a stipulated time. A term insurance plan is one of the most affordable policies that secure your family’s future in case of an unfortunate event.
Why do we need a term insurance plan?
Life is full of uncertainties; nothing comes announced, and we must prepare ourselves for every situation. During such incidences, term insurance acts as a financial shield that protects your family from monetary liabilities. In your absence, these term insurance plans act as an alternate income and cater to your family’s financial needs. When you have such expectations from a plan, it is advisable to select the best one in the category. Here’s how you choose the best term insurance plans in India:
Your age and number of dependents – In a family, it is rare that everyone will be of the same age group. If you have children, then your responsibility will be more than that of a single person. The sum insured should be chosen, keeping in mind the finances of the dependents, inflation and their added expenses in the future.
Maintenance and Lifestyle – Another important point is the current lifestyle of your family members. You wouldn’t want your dear ones to alter their living standards. So, the sum insured should be decided based on their current expenses and as mentioned earlier, inflation too. While calculating lifestyle expenses, adding everyday bills, existing loans and other miscellaneous expenses are also important as they too form an integral part of the expense. The calculation should be holistic and shouldn’t be done from just one perspective. A sum insured should be decided only after calculating and considering every possible expense.
Higher Claim Settlement Ratio – While selecting the insurer, making a term insurance plan comparison is a must. You should compare the perks given by each insurer in the country and what benefit they offer. Most importantly, check the claim settlement ratio of the insurer. Many big companies like ICICI are known for their quick claim settlement process.
Maximum Coverage – Apart from the death benefit that is offered by a term plan, some term insurance policies offer an additional benefit like a premium cover waiver, employment loss cover, disability cover etc. These additional facilities are available at a nominal price which everyone should explore before selecting a plan.
Types of Plans – There are majorly seven types of term insurance plans available, and you can select the one that you think would benefit your beneficiary the most. They are:
- Renewable – A plan that can be renewed.
- Convertible – A plan that can be changed from term policy to whole policy.
- Level – Premium and sum insured remain unchanged.
- Decreasing – Premium is stable, but the sum insured goes down.
- Increasing – Premium is stagnant, but the sum insured goes up.
- Return of premium – When the total premium paid is returned if the insured survives the term.
Follow these basic steps and get the best term insurance plan for your family and loved ones.
Click here to apply for a term insurance.