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How To Select The Best Term Insurance Plan For The Tough Times Of Life?

Published On Oct 11, 2021 10:00 AM By InsuranceDekho

Term life insurance is one of the most effective ways to financially protect your family in the event of your untimely death. If you face an emergency within the policy period, term insurance coverage pays out a specified amount as a death benefit. Term insurance is an excellent choice because you just have to pay little annual premiums against a large sum of money. Furthermore, tax benefits are available for term insurance premiums, which is the icing on the cake. Thus, even in the absence of the breadwinner, the term insurance coverage amount enables the insured's loved ones to live a respectable life and realise all of their goals. Hence, purchasing a term insurance policy is an excellent approach to provide financial stability to your family after you pass away.

How To Select The Best Term Insurance Policy For The Tough Times Of Life?

When choosing a term life insurance policy, keep the following factors in mind to guarantee that your family receives the best financial protection possible.

1. Thorough Research

Policyholders frequently become perplexed due to a lack of understanding of the benefits of term insurance policies. It could also pose problems when filing a claim under the coverage.
As a policy buyer, you should first investigate the benefits that an insurer provides under a term plan and then match them to your financial requirements. A thorough examination of benefits and requirements helps in the selection of the most appropriate term insurance policy.

2. Look for Payout Alternatives

Traditionally, life insurance plans have paid a considerable sum of money to the insured's dependents in the event of an unanticipated event. Dependents are frequently unprepared to manage such a significant amount of money in order to achieve all of their requirements and ambitions. Term insurance policies also have the option of selecting a type that provides regular income possibilities in addition to the lump sum, allowing them to meet their immediate needs while investing the lump sum for future ambitions. Choosing a regular income payment option when purchasing a term insurance policy may thus save your dependents a lot of trouble in the future.

3. Choose Riders Carefully

You must protect yourself against more than just death. Disabilities and life-threatening diseases might have a negative impact on your financial well-being. Adding a rider to your term insurance plan that covers these benefits, as well as a few other value-added riders like 'critical illness cover,' can provide superior financial protection.

4. Check the Claim Settlement Ratio

The ultimate truth about the credibility is revealed by a life insurance company's claim settlement record. Every year, the IRDAI (Insurance Regulatory and Development Authority of India) publishes a percentage of Claim Settlement Ratio that can be used to rate different companies. A high claim settlement ratio, also known as the claims paid ratio, implies a robust and quick claim settlement process for life insurance claims. It means that under the terms of your chosen life insurance plan, your dependents will collect the death benefit from the insurer with ease.

5. Check the Persistency Ratio & Solvency Ratio

Purchasing a term insurance policy is usually simply the beginning of the process. To get the most out of your term insurance coverage, you must handle it properly. Engaging with a company that not only provides the greatest term insurance plan for you, but also keeps you informed about the policy's terms. Life insurers' customer service might encourage customers to stay with them for a longer period of time. The IRDAI's yearly Persistence Ratio can be used to assess an insurer's service quotient. Moreover, the solvency ratio of an insurance provider depicts the insurer's financial status in accordance with solvency standards. You can determine whether an insurer's solvency ratio is sufficient to settle claims in the long and near term by looking at its solvency ratio.

5. Look for Quality Service and Online Plans

Another factor to consider when choosing a term insurance provider is the level of service provided. To ensure that you are dealing with a reputable insurance provider, you must know and ask about this characteristic from your peers or check online reviews.
You could also examine an insurer's customer support team's online availability to get faster answers to your questions.


People from all walks of life understand the necessity of purchasing the appropriate term insurance coverage for their needs. Every family requires financial stability through a term plan in today's fast-paced world to deal with the financial hardship of losing a loved one, particularly the breadwinner. Therefore, be careful while choosing a term plan for yourself. You can even consult a financial advisor to make a better decision. 

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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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