Tips to Buy the Best Term Insurance Plan in India
Published On Sep 05, 2021
Table of Contents
Human life is full of uncertainties, be it pleasant or unpleasant. Some of these unforeseen events can affect the lives of your family members. To deal with such situations, you need to stay prepared in advance. However, you can have an insurance plan to meet the needs of your loved ones in your absence. One such life insurance plan is term insurance policy. This insurance plan serves as a financial cover for your dependent loved ones in the event of untimely demise.
To get the best insurance plan out of various insurance plans available in the market, just follow the below mentioned tips:
Sum Assured Required by Your Family
Before buying a term insurance plan you need to ask an important questions to yourself i.e. How much money would your family need in order to support themselves after your demise? Given below are the 3 major objectives for which your loved ones would require money in your absence:
- For food and maintaining the lifestyle
- Making payment for any debt or liability
- Investment in long term future goals
Generally, the amount of money that can sufficiently provide for the afore-mentioned basic needs of your family would be ideally 10-15 times of your annual income. Thus, in case you earn Rs 2 Lakh per month, then you can begin by investing in a minimum term cover of Rs 2.5 crores.
Measure the Effect of Your Family Size and Life-Phase
At each stage of your life, there may be a different number of individuals who would depend upon you emotionally and financially. For instance, marriage, birth of a child, buying a first home, etc are different stages of life that one generally goes through in their lifetime. Moreover, each phase of life marks a milestone in your life from a financial front.
Each phase of life indicates that your financial responsibilities are increasing and so must your term insurance plan. Therefore, it is significant for you to ensure that your term insurance is sufficient to keep up with your changing lifestyle. For this, either you can look for a term plan that continues to grow yearly at a fixed rate or you can go for a term plan that lets you increase your sum assured at every important event of your life.
Maximise Your Covers with Riders
Riders are the additional covers that you can include to your standard life insurance plan in order to maximise the coverage at the cost of an additional premium amount. Some of the best term insurance riders that can prove to be highly beneficial are terminal illness benefit, accidental death and disability cover and premium waiver benefit.
A term insurance plan is a must buy for every individual who has financial dependents in order to ease their survival even after the untimely demise of the sole breadwinner of the family. Therefore, while choosing the best term plan for yourself do not forget to consider the afore-mentioned tips in order to be financially responsible while choosing a plan.
You may also like to read - Understanding Different Types of Life Insurance Policies Available in India
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.