Tips to Choose the Perfect Term Insurance Plan
Updated On Jul 18, 2021
Table of Contents
- 1. Determine The Cover Amount Based on Your Life Stage and Number of Family Members
- 2. Consider The Amount Your Family Will Require to Keep Up Their Lifestyle
- 3. Select a Plan Providing the Amount of Cover Required to Cover Your Liabilities
- 4. Purchase The Plan from The Insurance Company With High Claim Settlement Ratio
- 5. Understand the Riders That Will Expand Your Plan Coverage As Per Your Choice
Life is uncertain where anything can happen anytime, without any warning. We can not cease any adverse event from happening but can prepare ourselves to deal with it. Purchasing a term insurance policy is a part of such preparations as it can act as a cushion for the financial security of your family against different types of uncertainties. But, when it comes to choosing a term insurance policy, most of us get confused thinking of the best plan for them. On this note, here are some tips to help you select the most perfect term insurance plan for you:
1. Determine The Cover Amount Based on Your Life Stage and Number of Family Members
You should select the term insurance cover based on the life stages of your dependent family members and their count as the financial responsibilities of a married man or one with children would be more than that of a single person.
2. Consider The Amount Your Family Will Require to Keep Up Their Lifestyle
While selecting a term insurance plan, you should opt for a coverage amount based on your family’s current lifestyle as well as future responsibilities. You must choose the life cover based on the funds your family will require to maintain their lifestyle in future keeping the inflation factor in mind.
3. Select a Plan Providing the Amount of Cover Required to Cover Your Liabilities
Generally, people with families hold some burden of liabilities in the form of personal loans, car loans, home loans, etc. To avoid the EMI repayment burden from getting levied on your family in your absence, it is imperative to consider the amount of outstanding loans while selecting the term cover.
4. Purchase The Plan from The Insurance Company With High Claim Settlement Ratio
An insurance company with an effective and high claim settlement process can easily live up to the promise of providing financial reimbursement. The Claim Settlement Ratio is the numerical value in percentage denoting the number of claims settled against the number of claims filed. In short, the higher the claim settlement ratio will be, the better the chances will be of getting the sum assured amount easily. Therefore, you should buy a term insurance plan from an insurance company with an impressive claim settlement ratio.
5. Understand the Riders That Will Expand Your Plan Coverage As Per Your Choice
Along with the death benefit, term insurance plans offer different additional covers as well in the form of rider covers. The term insurance plan riders offer various covers like disability cover, loss of employment cover, waiver of premium cover, etc, which you can add to your plan by paying a little extra premium along with the basic insurance premium. Picking the right rider can add considerable value to your purchased 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.