Unhealthy eating habits, improper lifestyle, and hectic work culture are hampering human health in numerous ways. Emergencies come unannounced, and in case of any unfortunate incident, who will take care of your family, especially if you are a sole breadwinner. Investing in term insurance is one of the most effective ways to secure your loved ones’ financial future.
If you are wondering what is term insurance, then read ahead to know more about it and how to choose the right plan.
A term insurance plan is a type of life insurance policy that protects the financial wellbeing of your family members when you are not around. The primary purpose of a term plan is to provide a death benefit. However, insurance providers in India offer various riders that you should consider. Choosing the best term insurance plan can be a daunting task for many people. However, you need not worry, as we provide you with a list of essential aspects to keep in mind when buying term insurance.
- Check the insurer’s claim settlement ratio
The CSR depicts the percent of claims settled by an insurance provider in comparison to the number of claims that they received during a financial year. You need to find out the insurer’s CSR before opting for a term insurance plan provided by them. The annual report of the Insurance Regulatory and Development Authority of India (IRDAI) is the best place where you can get this information. It is advisable to select the insurance company that has the best CSR.
- Review the features of different term plans
Analyzing the offerings of various term policies can help you choose the best option available in the market. Here is a list of a few parameters that you can compare to pick the best term insurance plan:
- Policy coverage
- Claim settlement process
- Select the right coverage amount
Term insurance is an investment and not an expense. Many people consider the premium as a cost and thus, opt for a lower coverage. Determining the amount of coverage you will require to meet your family’s financial needs when you are not around is an important factor to consider before buying a term insurance plan. You can use the term insurance premium calculator to ascertain this amount based on your requirements.
- Choose ideal riders as per your preference
Insurance companies in India offer various riders with term insurance plans to widen the scope of coverage. Some of these riders include:
- Accidental death benefit
- Waiver of premium benefit
- Critical illness benefit
- Return of premium benefit
The inclusion of riders can increase your premium, but they are worth it. So, if you feel that a particular rider will be valuable for you in the future, opt for it.
- Compare the premium
After shortlisting term insurance plans in India based on the factors mentioned above, compare the premium offered by various insurers and then make your final decision.
Do not ignore the importance of having a term insurance plan. Such a policy will play a pivotal role in securing your family’s future financial needs when you cannot be there to look after them. It will help your dear ones lead a peaceful and comfortable life.
With a term plan, your family members can maintain their lifestyle without any compromise. A term policy offers a high sum assured at an economical premium. Additionally, the premium paid towards this investment and the death benefit are tax-exempt. So, do not waste any more time and choose the best term insurance policy according to your requirements.