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How to Buy the Perfect Term Insurance in 2021?

Updated On Jul 23, 2021

The Covid-19 pandemic has acted as a wake-up call for many people who took their health lightly. Moreover, it has taught us that life is unpredictable, and one must prepare for the worst situations. Hence, purchasing a good term insurance plan will be an excellent financial decision that will help your family sail through difficult times and maintain their daily expenses and lifestyle while aiming to fulfil their future goals and aspirations. Read on to find out some tips on how to buy the perfect term insurance policy. 

How to Buy the Perfect Term Insurance?

The following are some of the things to think about while buying a term insurance policy.

1. Identify Your Needs and Expectations

The first step to purchase a perfect term insurance plan is to identify your current needs, requirements and budget while also considering your personal and professional future goals, aspirations and dreams. Moreover, you should note down all the expectations you have from your term insurance policy, like the desired coverage, policy duration, approximate premium rates etc., to help make your search easier.

2. Compare different Policies

Term life insurance contracts can have slightly different terms and conditions regarding the policy duration, eligibility criteria, premium prices from one insurer to the next. This is why comparing and comprehending several policy options before deciding on the ideal one is a good idea. Some of the best term insurance plans include HDFC Click 2 Protect Life, Max Life Smart Secure Plus, Aegon Life iTerm Plan, Canara HSBC iSelect Star, ICICI Pru Saral Jeevan Bima etc. 

3. Choose a Trusted Insurer

Buying a term life insurance policy from a reputable company with a high claim settlement ratio reduces the risk of fraud and claim denial. A high CSR demonstrates the company's trustworthiness in resolving claims. Moreover, other indicators such as the persistency ratio and solvency ratio can also be evaluated when selecting an insurance company. The former reveals the percentage of policies that are renewed within a year, while the latter demonstrates the company's ability to handle its liabilities and debts.

4. Riders

Additional benefits contribute to a more extensive financial support system for your loved ones in the case of an emergency. Some of the rider benefits to check out when purchasing a term insurance policy are critical illness cover benefits, waiver of premium, permanent or partial disability coverage, accidental death coverage etc.

5. Inflation

When choosing a term insurance policy, the rate of inflation must be taken into account. This assists in determining the amount necessary to meet your family's daily costs and preserve their current lifestyle in the future. Furthermore, the figure should be sufficient to assist your dependents in achieving their long-term goals, such as higher education.

6. Online Policy Over Offline Policy

The pandemic has necessitated the purchase of an online term insurance policy from the comforts of your home. Moreover, a term insurance policy purchased online is less expensive, more convenient, and more flexible than one purchased offline, which involves more paperwork, commission payments, and a mediator. Furthermore, the money saved by the agents on administration and service costs in an online mode is returned to the policyholders as premium discounts on their policies.

Take Away

Choosing the right life insurance policy is a significant personal and financial move. Therefore, you should ensure that you analyse all aspects of a term insurance policy before selecting the best option for yourself. 

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.  

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