Tips for Purchasing A Term Insurance Plan Online
Published On Jun 16, 2021
Table of Contents
- How To Purchase A Term Insurance Online?
The financial security provided by a term insurance policy in the occurrence of the unforeseen death of the policyholder helps the dependents and beneficiaries live their lives without a significant change in their lifestyle and future goals.
Although thorough and detailed study about various policies provided by different insurance providers can be pretty exhausting and time-consuming, buying term insurance can be done quickly through online platforms and websites. Here are some tips you can follow while purchasing a term insurance plan online.
How To Purchase A Term Insurance Online?
A suitable term insurance plan can be purchased online by following these steps -
1. Assessment of Your Requirements
You can determine the amount of the sum assured of your term that would be sufficient to meet your family's future financial goals and conditions. You should include the number of financial dependents and existing liabilities like loans, mortgages, and your current income, inflation rate, and estimation of an adequate amount that meets the family's lifestyle practices and future goals. It is advisable that the sum assured remains at least 15-20 times of the life assured's current annual income.
2. Selection of Insurance Provider
Some points to keep in mind while selecting an insurance provider are as follows.
- The claim settlement ratio(CSR) refers to the claims settled by the company. It would be best if you went with the company with a ratio above 95%, as they must have paid for 95 out of 100 claims filed. A higher number is indicative of higher credibility.
- The retention capability of the company can be measured through the persistency ratio. A high percentage of people who renewed their policy after the first and five years show the company's authenticity.
- A higher solvency ratio shows the company's ability to take care of its debts and liabilities. According to IRDAI(Insurance Regulatory and Development Authority of India), the solvency ratio of 150% helps avoid bankruptcy.
3. Calculation of The Premium
You can calculate the premium amount on your desired term insurance plan through an online term insurance calculator. It is advisable to purchase a policy whose premium amount can be managed in your monthly budget.
4. Providing Necessary Details
You can visit the website of your selected insurance providing company and insert your personal details like gender, date of birth, height, weight, contact details, monthly income, hospitalization history, medical conditions (if any) and if you have any smoking or drinking habits along with the sum assurance and policy tenure.
5. Decide Premium Payment Mode
You can select a suitable mode of payment out of the following options.
- A Lump-Sum Payout - The amount will be paid as a lump sum to the beneficiary after the life assured’s demise. You can choose this if you have a significant debt of a home loan.
- Regular Monthly Income - A regular payment, like a monthly income, will be paid to the nominee for a specified duration.
- Increasing Monthly Income - The amount paid as monthly income will be increased for a specific duration which can help handle the effects of inflation.
- Combination of Lump-Sum And Monthly Income - The sum assurance will be paid in a lump sum followed by a regular monthly income for the nominee for a specified time. You can choose this to secure your child's higher education and marriage goals.
6. Choose Appropriate Riders
You can opt for additional benefits like a critical illness cover if you have a history of family illness like kidney damage, cancer or heart attacks or a death cover rider with additional accident cover which would be helpful in covering the accidental costs if the life assured dies in an accident.
7. Fill The KYC form
After filling your personal details, you have to upload a recent passport-sized photograph, address proof like utility bills or a driver’s license, ID proof like an Aadhaar Card or a PAN Card, age proof like a passport, and proof of income like income tax returns along with beneficiary details to complete KYC formalities.
8. Read The Policy Terms And Conditions
It is advisable to read the terms and conditions of the policy carefully and understand policy exclusions like death by war, suicide or childbirth. You can make the payment through your credit or debit cards or net banking option. A soft copy of the policy will be emailed after the approval of your proposal. The hard copy will also be posted to your address.
You can secure the financial future of your loved ones through a term insurance policy. Hence, you should make the most of the offer by accurately evaluating all the policies and easily buying the most suitable one through the online website.
You may also like to read - Reasons Why Women Should Purchase A Term Insurance Plan
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.