As we move ahead in our lives, our responsibilities grow and we start to realize how essential it is to plan for the future. We start to look beyond our own needs and requirements and start to think about those of our loved ones. Investing in term plans is one of the best ways to provide your family members with a security blanket, something that would cater to their needs even if you aren’t there with them.
Nobody wants their family to struggle to make their ends meet, especially if you are the major or the sole breadwinner in the family, your concerns about the same would be even more. And the best way to ensure that your family would be supported financially even in your absence is to invest in term plans. Term plans are beneficial financial tools that provide a life cover. It provides financial coverage for a specified period of time, during which the policyholder pays a premium on a regular basis to the insurance company. If the insured individual passes away during this period, his beneficiary/ beneficiaries will be eligible to receive the sum assured. This amount that the beneficiary/ beneficiaries receive is called the death benefit.
The market today is overflowing with companies that offer various kinds of term plans to the customers. This may make the process of choosing the best term insurance plan a little overwhelming. But, even though it may seem to be a herculean task, looking for the best term insurance plan is not really that difficult. You simply need to be aware of a few basic factors when you go through the details of the various term plans. If you have been asking, “How do I choose the best term insurance plan?”, read on.
The Need for Term Plans
When you consider buying term plans, remember to buy something that would suit your needs and requirements. There is nothing wrong with taking ideas or suggestions from friends and family members, but you must buy the term plans that would satisfy your demands. It is generally recommended that the insurance cover should be at least 10 times of an individual’s annual income. Because when you invest in term plans, you need to cater for inflation and the loss of income. But, this is an assumption and should be followed blindly. If you wish to have the best term insurance plan, keep the factors like your goals, your liabilities etc. in your mind too when you are finalizing the sum assured.
The Premium Amount The amount that you would be paying as a premium is indeed an important factor when buying term plans. But it should not be the only factor when it comes to choosing the best term insurance plan. It may tempt you to choose term plans with a low premium, but low premium also means a low cover. A little extra today can really prove beneficial for your family tomorrow. What also needs to be in mind is that an amount that seems big today, may not be so in the future. With the rising cost of living and inflation, the value of money would decrease with passing time. The value of INR 1 lakh will only be down by almost 7% every year.
Availability of Additional Covers When you shortlist term plans, you must also seek the riders that come along with the term plans. The best term insurance plans provide a wide-angle coverage, and adding on riders to your term plans can really benefit you and your family in various situations. Let’s say, a policyholder has a Critical Illness Rider, if he is diagnosed with the same, he is entitled to receive the sum assured. At such a crucial time in his life, the sum assured that he receives can help him deal with all the financial burdens that fall on him due to the illness. There are many options when it comes to riders or add-ons, go through them in detail, that would help in making your term plans to be the best term insurance plan.
Buying Term Plans Online or Offline
Thanks to the innovations in technology, buying term plans is a very convenient process. Learning and gathering information about the various term plans in the market can be obtained through the internet which can aid in selecting the best term insurance plan. But you may at times prefer the traditional ways of speaking to an insurance agent in person, who will explain about the different term plans and help you choose the best term insurance plan for yourself. The agent will also help you in going through all the formalities, you can easily do that as well. Most companies provide their customers with the facility of auto-debit, irrespective of whether you buy the term plans online or through an agent. Depending on the instructions given by you, the amount would be taken from your account either monthly or annually. So, once you buy the best term insurance plan you don’t have to pay the premiums manually.
Choose the Insurer Company Wisely
Today there are many old and new companies that provide term insurance, but when you want the best term insurance plan for yourself, it is also very important to see which company you are choosing. It is this company after all that you are trusting upon with your family’s financial security. Remember when your family loved ones would be braving the emotional loss of you not being there, it shouldn’t happen that they have to struggle and strive to get the insurance claim. The company should be credible and also be known for its integrity towards its customers. You may want to seek information about the claim settlement ratio of different companies, and keep it as an important factor when you weigh the best term insurance plan. The claim settlement ratio is announced by the IRDAI.
Conclusion Life is unpredictable, but many of us feel that we are in full control of our life and nothing can go wrong. But then, living in a fool’s paradise is not a great thing to do. Planning for the safe and comfortable future of your loved ones is the responsibility of every individual who is an earning member in the family. If you haven’t already invested in term plans, it is high time that you do. Start small, but do start.
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