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How to purchase the Best Term Policy?

With the growing awareness, term insurance has gained huge popularity today. Advertisements by insurance companies and dropped premium rates have invited numerous people. And, the facility of purchasing policies online is just another feature that attracts the customers by helping them to compare the best term policies.

Term insurance is considered the best and most suitable plan by the financial planners because it provides higher cover at lower premiums. The amount paid for purchasing a ULIP or money-back policy with same coverage is known as the premium. No-investment element and the lower premium are the factors behind the vast demand for term policy.

Here are the points to ponder when planning to purchase term insurance policy-

Adequacy of The Cover Amount

Life insurance cover is the amount provided by the insurance company to the dependents of the policyholder in case of his demise in order to replace his earnings. Hence, the chief priority is the analysis of cover amount that would be enough for the primary expenses, basic expenditure and other accountability of dependents. Select the best term plan with a cover that helps the nominee lead a relaxed life.

What’s The Policy Tenure?
Term plan tenure is another thing that requires attention. Getting coverage till retirement is one of the best things a policy can offer.
The new trend of late marriages and having children at a higher age has changed our lives where we generally don’t retire from our responsibilities at an age of 60 years.

The best term policy would provide you the flexibility in selecting the policy tenure as per the circumstances.  There are fixed tenure policies with cover for 15, 20, 25 or 30 years. Some plans might not offer you any cover after 60 years. It is always better to opt for policies which can be customized according to your need.

Comparison of Plans
It is always better to compare the plans by various insurers and analyze the features along with premium charges. This process can help you purchase the most affordable policy. In addition to the plan, keep a check on the claim allowance when deciding on the insurer.

The Unforgettable Inflation Factor
Inflation is something which has acquired an important place in our life. When searching for the best term policy, do analyze the cover according to the inflation factor. The cover might look sufficient today, but not at the end of the plan.
Many companies have come up with a solution of increasing your cover every year by a percentage of about 5-10% but such plans have higher premiums as well.

Online Term Plan Benefits
Now-a-days, all insurers have come up with online term plan option that generally benefits you in two ways-  Firstly, you can perform the compare and contrast process and analyze each plan minutely . Secondly, there are no extra broker charges as the process does not require any dealer in between, making it a cost-effective means.

In addition to the above points, one must also have knowledge about the insurer’s claim settlement period for selection of the best term policy.
All these steps can help you select the plan that best matches your requirements and plans for your dependents. 

Written By: PolicyBazaar - Updated: 29 May 2020
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