We live in the 21st century where the cost of living only seems to be moving up, and if you don’t have financial security in place to protect your loved ones, it can have serious consequences. An insurance plan that is not only recommended by experts but is popular among people to serve the purpose of protection is Term Insurance. This insurance plan is a product of life insurance that offers maximum coverage with the lowest premiums.
However, many insurance companies offer term plan in the market. They all vary from each other based on their features, cost, and benefits their policy provides. Some features might suit you, and some might not. So, how you are going to find the right plan for you?
Here are the things that you should keep in mind before buying a term insurance plan:
One of the most recommended modes of premium payment is regular, where you can pay a premium monthly, quarterly, half-yearly, or yearly. This type of payment is advised because of the affordability factor. Other benefits are:
- Paying premium regularly will not cause any financial burden on you.
- You can discontinue policy once you believe that your dependents are financially independent.
Apart from the regular mode of premium payment, there are single payment options and limited payment option.
In a single payment option, you must pay the whole premium once. It is cheaper than regular premium payment mode but spending this much money at once can cause considerable strain on your pocket.
Whereas in a limited payment option, you can pay the premium for a shorter period and enjoy the benefits of an insurance cover for a longer time. The plan is appropriate for the people that want to get relieved from the commitment of paying premiums for long periods.
It is advisable to take a term cover, which is at least 20 times of your current annual income. Before you buy a term insurance plan, you should analyze your current and future liabilities and debts such as your child’s education, marriage, and home loans. Take all of this into consideration and then only decide on a coverage amount that is right for you.
The main objective of buying term insurance plan is to replace the income of the life assured in case their untimely demise. Therefore, it is essential that you buy a term insurance plan that covers you till the age you intend to keep working, say till 60 years or 65 years of age. Ideally, the difference between your current age (when you decided you want to buy term plan) and your planned retirement age should be your policy tenure.
Also, it is advisable to buy a term insurance plan at a young age so that you can benefit from low premiums. If you are planning to buy a term plan in your 50s or 60s, then get ready to shell quite a bit in premiums. More is your age more is your premium.
(Claim settlement ratio = number of claims approved by an insurer/ number of claims received by insured)
Claim settlement ratio is an indication of the claims that an insurance company that you are looking forward has settled. Before you avail your policy, it is important to take this ration into consideration. You check Claim Settlement Ratio of many insurance companies in India on a report that is released every year by IRDAI. It is always advisable to opt for an insurance provider that holds a high percentage.
Now that you have enlightened yourself with everything, there is to term insurance; it’s time for you to purchase this insurance plan to secure your family’s future financially. Term Insurance plan from reputable insurers such as Max Life Insurance offers financial security to your family. Term plan looks after completing your family’s financial goals in case of your untimely demise.
There are many options in the market, carefully evaluate the plans with the help of the points mentioned above, and accordingly decide to choose that suits you best.
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