Term insurance plan: 6 things to keep in mind while buying one

Published: February 22, 2018 3:45:06 PM

The demand for term insurance is increasing day by day as it acts as a financial support to your family in your absence. However, you must keep a few things in mind before opting for a plan.

Term Insurance, term plan, term insurance plans, term insurance tax benefit, term plan benefits, pure protection planTerm insurance plans offer several benefits such as comprehensive financial security, pocket-friendly premiums, and peace of mind.

Term insurance is one of the most in-demand and popular insurance plans today. The demand for term insurance is increasing day by day as it acts as a financial support to your family in your absence. In case of your unfortunate demise, the insurance company pays out the corpus to your family to take care of their expenses and to cover up any unpaid loans or liabilities left behind. But some people refrain from investing in a term plan as there is no return in case of their survival and the family does not gain anything. However, one must look at the bigger picture here and the motive should be to protect your loved ones after you and to cover up their day-to-day expenses. This is the biggest investment you can make to protect your family, not looking at the monetary gains.

Term insurance plans are also known by the name of pure protection plans, thus, ensuring a happy and financially secured life for your loved ones — even when you are not around – at a very low investment. Investing a little amount of Rs 490 per month can get you covered up to Rs 50,00,000.

It’s never too late to make a wise choice, but consider the below facts to help make your choice easy and better one:

1. Cover yourself up to 20 times of your actual income

It is advisable to cover yourself up to 20 times of your actual income. One must consider the following points before deciding the apt cover for one’s family:

# Current Salary

# Salary increment after a certain period

# Day-to-day family expenses

# Family’s future needs like children’s education, their marriage etc.

2. Buy at an early age

The delay in purchasing a term plan will only increase the amount of your overall premium. The coverage will decrease dramatically with growing age. If you want to get all the essential benefits that are present in the term plan, then you must ensure that you are buying the same at an early age. It will surely help you in saving your hard-earned money.

3. Compare wisely

There are several cases where people invest in a term insurance plan by considering premium which is completely wrong. You must look into the features and don’t fall for the plans with a low premium option that is designed for a shorter span. It will be of no use. Instead, invest your money in a long-term plan that carries wider coverage.

4. Righteousness has its own Rewards

Well, you should agree with the fact that one should never lie to one’s lawyers and doctors, right? It is advisable not to lie to your insurer too. Suppose, you are investing in a term plan for a short term at an age of 20 years without disclosing your medical conditions thinking that you can easily outlive the policy period. But what will you do if something goes wrong and the insurance company detects that the cause of death is a health condition which was not disclosed in the proposal form? In such a scenario, an insurance company will simply reject the claim and also declare your policy null and void.

Hence, you should never put the wrong information about your age, health conditions, smoking habits, other insurance details and medical background in the proposal form. Just disclose your accurate information and also fill the proposal form on your own to avoid any rejections of the claim from the insurance company.

5. Comparison is the Key

Term insurance plans offer several benefits such as comprehensive financial security, pocket-friendly premiums, and peace of mind. But how will you get the best one? Finding the best and most economical term insurance plan is a difficult task. It is a problem only when you are not aware of the right path. Go online and compare policies through an online insurance web aggregator on the basis of features, inclusions, exclusions and much more. Next, compare their reputation, premium amount and claim settlement ratio. After that, you can easily get the best insurance plan that will go well with your budget, preferences, and requirements.

6. Riders

In the world of smart investors, people are aware of different ways to enhance their insurance plans. You can do the same by using riders and add-ons. Choose the one that offers wider coverage. It makes sense to understand your requirements and then opt for riders wisely.

Conclusion

Investing in term insurance is always a beneficial and wise thing. It will provide the needful security to your family after your demise. And now when you are aware of the different things that you should keep in mind before opting for a plan, you can wisely buy a term insurance plan. Good luck!

(By Naval Goel, CEO & Founder, PolicyX.com)

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