Term insurance is considered to be one of the purest forms of insurance. A term insurance plan provides cover and ensures that the
future of your loved ones is safe and secure. Purchasing a term insurance plan can be a great investment considering that it provides you with peace of mind and in case something happens to you, your family does not suffer from a financial point of view. Choosing a term insurance plan is important but ensuring that the policy chosen by you is the right one is even more important. So, how can you ensure that you choose an appropriate term insurance plan for yourself? We discuss this below.
Compare different plans: You must compare different term insurance plans before purchasing one for yourself. Check the premium and how it differs for different plans. Look for features that it has to offer including the riders. Proper research and comparison, in the end, can help in purchasing the most suitable term insurance plan for yourself.
Go for a medical test: While purchasing a term insurance policy, you might be asked to go through some extensive medical tests. However, some insurance companies may only ask you to declare that you are healthy which can be a problem for you in the future. The insurance company may reject the claim on the grounds that you had lied about your policy when you purchased it at the beginning and there is no formal document which proves that the insurance company was satisfied that you were not lying about your health. Getting a medical test done means that the onus is now on the insurance company and the doctor who conducted the test and there will be no reason for them to reject the claim in the future.
Provide correct details about yourself: Never ever provide incorrect details or conceal facts related to you. An insurance company on learning that you have provided incorrect information related to you, can revoke the policy and reject the claim in the future. Hence, keep them aware of every small detail. For example, if you smoke, you must let the insurance company know about it. You wouldn’t want your family to suffer because you chose to conceal or provide incorrect information related to you.
Buy your term insurance plan online: It is always advisable to purchase your term insurance plan online. There are many advantages of doing this. First of all, it is easy to research and compare your plans online. Secondly, the process of purchasing a term insurance plan is paperless, convenient, quick, and hassle-free in nature. The most important reason why you should purchase term insurance online is that the premiums might be cheaper when the scheme is purchased online. The reason is that when you buy term insurance offline, a part of your premium might be paid by the insurance company to the agent, hence making it slightly expensive to buy a plan. When you purchase the same policy online, you are paying directly to the insurance company, hence completely removing any agent or middlemen from the equation. Thus, always try to buy term insurance online.
Be specific about the time you would like to be covered for: You should be sure about the period of time you would like to be covered for. Ideally, you should ensure that you are covered till the time you plan to retire which is 60 years. However, you may choose a plan which covers you until you touch 65 years for you may still continue to work, or marry late, due to which having an insurance cover becomes a necessity.
Check if the policy has riders or not: Riders or add-on plans provide additional coverage and give you that extra layer of protection. There are various riders or add-on plans which you can avail such as the critical illness rider plan, waiver of premium rider plan, accident and permanent disability plan, etc. It is always advisable to choose a plan which provides the option of availing rider or add-on plans for yourself.
Know your cover amount: Choosing a cover amount is important and you must ensure that the sum assured is adequate to take care of your family’s needs in your absence. The thumb rule is that the sum assured must be at least 10-15 times your annual income. However, the cover amount will depend on factors such as your age, financial requirements, and future goals. You must also take inflation into account as well, for the amount chosen by you today may not be enough in the future. For example, a cover of Rs.60 lakh might be equivalent to Rs.40 lakh after 15 years from now, which might cause financial problems for your family. Hence, based on inflation choose an appropriate cover amount for yourself.
Check the claim settlement ratio: You must purchase your insurance from a proper insurance company. You would certainly want an insurance company that does not take more tha
30 days to settle the claim. One of the best ways to ensure that you are purchasing your term insurance policy from a reliable insurance company is to check its claim settlement ratio. Higher the claim settlement ratio, better the company is likely to be. You can find the claim settlement ratio of various insurance companies online on the official website of the Insurance Regulatory and Development Authority of India (IRDAI).
Thus, these are some of the ways through which you can purchase a suitable term insurance plan for yourself and ensure that the future of your loved ones is safe and secure.