When it comes to life insurance products, term insurance is a popular choice of investment for most of the buyers. As the purest form of life insurance product, term insurance is very easy to understand and is the best way to secure the financial future of your loved ones. Nowadays, as there is an extensive range of term insurance policies available in the market to cater to the various requirements of the insurance buyers. Choosing the right insurance policy can be a herculean task.
To choose the best term insurance plans as per one’s requirement and suitability, it is important to understand the various aspects of it. Here, we have given some insight into the important points that you should ponder before purchasing a term insurance plan.
Check the Claim Settlement Ratio of the Company
This is probably the most important thing to do while buying a term insurance plan. The claim settlement ratio refers to the percentage (%) of claim settled by the insurance company in return for the total number of claims filed in a year. Before zeroing in on a policy don’t forget to check the claim settlement ratio of the company. Always try to purchase the policy from insurers who have a higher CSR. Purchasing the policy from a reputed insurer reduces the risk of rejection of the claim and provides a surety that your family members will not have to go through any trouble in case of any eventuality while filing the claim. A Higher CSR percentage indicates the higher reliability of the insurance company.
Compare the Plans
to choose the best term insurance plan that fulfills your requirement and is as per your suitability, it is a must to compare the plans online. By comparing the plans online you can evaluate the benefits offered by different plans for the same premium rate and choose the best plan to secure the financial future of your family. Moreover, you can also use the term plan calculator to estimate the amount of coverage you will require to protect your family and the premium rate that you will have to pay towards the policy.
Consider the Future Inflation Rate
This is one of the important factors that is often overlooked while purchasing a term insurance plan. By factoring in the future value of money you will be able to make sure that the policy you buy will stay adequate to take care of the financial needs of your family for the entire tenure of the policy. thus as an insurance buyer, it is very important that you evaluate the needs and make an informed decision as per your suitability. For the insurance buyers, it is always advised that they should choose the coverage amount 10-15 times of their annual income so that it can beat the future inflation rate.
Ideal Tenure of the Policy
The ideal term period of your policy should be your age of retirement minus the annual income. This means that if a person is 35 years old today and wants to retire at the age of 60 years old the tenure of the term insurance plan should be 60 years-35 years i.e. 25 years.
Go for the Online Process
These days, most of the term insurance plans are sold online and you can purchase these products in a hassle-free way. Buying the term insurance policy online not only saves time but also saves a lot of money. As you directly purchase the policy from the company website you don’t need to pay any agent commission or broker fees. Moreover, if you are a non-smoker or a young buyer then you can also avail of discounts on the premium rate. Thus, purchasing the policy online is always beneficial as you can save your time and money both.
While buying a term insurance plan, make sure that you disclose everything to the best of your knowledge in the application form provided to you offline or online. You should always mention your current and existing health condition, family history, and details about other insurance policies. Providing the right information to the insurer will help you to have a hassle-free claim settlement process in case of a claim filed during an emergency. The insurance company might reject the claim made by the nominee of the policy if the cause of death of the insured is due to any illness or any other reason that is not mentioned in the application form.
Wrapping it Up!
No matter whether you have a child married, single or have a retired parent to take care of it is crucial to have financial protection for your family. Don’t forget to consider these important points while purchasing a term insurance plan.