With all the different insurers in India offering multiple term plans, selecting the best can be a daunting process. If you are confused with the options, read this post to know 5 simple steps that can help you make the right decision.
The decision to purchase a term plan is one that should not be rushed. With so many insurers offering all the different types of term plans, you should know how to thoroughly compare the options and select one that best meets your insurance needs.
So, what are the steps you should follow to purchase the most beneficial term plan in India? Take a look-
1. Know the Life Insurance Coverage You Need
While there are several vital elements in a term plan, the coverage you need is an excellent starting point. The policy coverage is the pay-out that your policy beneficiary will receive in case of your demise. So, you should ensure that you select an amount that should be able to help your loved ones with their financial needs, at least for a considerable duration.
Factors like average monthly expense, liabilities, inflation, and long-term objectives should be considered when calculating the insurance coverage. It is not necessary to have an exact figure. An approximate amount that you feel is adequate for your loved ones can make it easier for you to compare and purchase a policy online.
2. Choose a Policy Tenure
The next vital element is the policy tenure. Term plans are available for fixed tenures ranging from 10 years to 30 years and more. The maximum tenure or age limit can vary between insurers. Once you know the coverage amount, the next thing you should think about is the duration for which you need a term plan.
Your current age, financial responsibilities, liabilities, and approximate age when you’d like to retire are some factors that should help you select the right tenure.
3. Select a Reputed Insurer
Once you have an approximate idea about the coverage amount and policy tenure, you can compare top insurers based on these factors. Not every insurer will offer the coverage and tenure combination you are looking for. You can visit the official website of the insurers to know more about their offerings.
You should also consider factors such as the claim settlement process, claim settlement ratio, and solvency ratio of the insurer to choose the best.
4. Check the Add-ons Offered by the Insurer
The steps above should leave you with a few top insurers that perfectly match your requirements. Take this comparison a step further by going through the add-ons offered by them. The add-ons are a great way to add more features to your term plan.
Some of the add-ons you should consider are accidental death, critical illness, and policy waiver. Understand what these add-ons are to select ones that best match your needs and expectations. Not every insurer offers all the different types of add-ons.
5. Compare Premium and Renewal Guidelines
Last but not least is the policy premium. Most people generally begin their research with the premium. But it doesn’t make sense to purchase a cheap term plan if it fails to fulfil your insurance needs. Go with a term insurance plan that is competitively priced.
Most insurers now allow the policyholders to renew their term plans after the initial tenure. But the renewal is subject to the guidelines that can vary between insurers. You should try to choose a policy that has a higher maximum renewal age limit. This will ensure that you are able to continue with the same plan even in your senior years.
Safeguarding the Financial Future of Your Family with a Term Plan
If you are confused with all the different term plans available in the market, follow these steps to make the selection easier.
Most insurers now allow you to purchase a term plan online. So, after making a decision, you can go ahead and complete the formalities to make the purchase. This will mostly require you to fill an application form, submit relevant documents, and make the premium payment.
Depending on your age and insurance coverage, you might have to complete a medical check-up to get your application approved.