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5 Things You Must Keep In Mind When Buying Term Insurance Plan

Smart investors often do two things very well:

First, they set long-term, realistic financial goals.

Second, they make sure of ensuring a financially secure future for their dependents against any unforeseen situations like death.

Wondering how?

Simple, they invest in term insurance plans. Yeah! You heard it right! Term insurance plans are the purest form of life insurance product that provides your loved ones a comprehensive financial protection in the event of your demise; thereby, ensuring a happy and financially secure life for them, even when you are not around.

But here’s the deal:

A large number of investors often end up regretting of not having done a proper research before zeroing in on a term insurance plan or even fall prey to mis-selling of insurance products.

Why?

This is because of the lack of awareness about term insurance plans.

Now, you’re probably wondering:

“What should I keep in mind before buying a term insurance plan?

Well today, we’re going to make it easy for you. All you need to do is carve out a few minutes of your day and check out these 5 things you must keep in mind when buying term insurance plans.

    • Early Bird Catches the Worm

Look:

Most young people think that they don’t need to buy an insurance plan because they are hale and hearty.

But we’re sure you’ll agree that life is uncertain. In addition, delay in buying a term insurance plan will only add to your overall premium payment. Simply put, the coverage will decrease dramatically with growing age.

The bottom line?

If you want to get all the benefits of a term insurance plan at a lower premium, you NEED to buy a term insurance plan as soon as you start earning.

      1. Time it Right!

Here’s a shocker:

A large number of insurance seekers buy a term plan for a shorter term with an intention to shell out a lower premium.

Sure, buying term insurance for a shorter term saves money alright.

But post completion the shorter term, you will need to buy another term plan and this time for a higher premium. Why? Because by then your age too will increase.

A person in his 20s would require a term plan with a higher tenure than the person who is in his 50s.

The bottom line?

Don’t fall flat for the lower premium and buy a term plan for a shorter span. It is not going to do any good to you. Instead, buy a term plan for a higher tenure when you’re still young.

      1. Righteousness Has its Own Rewards

Here’s something we can both agree on:

One should never lie to their doctors and their lawyers, right?

Well…In our experience, you must never lie to your insurer too.

We’ll explain.

Let’s assume you’re buying short term insurance plan at an age of 20 years without disclosing your medical conditions with the hope that you will easily outlive the policy period.

But:

Something goes wrong and the insurance company detects the cause of death due to health conditions, which were not disclosed in the proposal form.

Now:

The insurance company would reject the claim and declare the term policy as void or null.

The bottom line?

Never fill incorrect or incomplete information about your age, health conditions, smoking habits, other insurance details and medical background in the proposal form.

Therefore, it is very important to disclose accurate information and also fill the proposal form on your own to avoid any rejections of the claim from the insurance companies

      1. Comparison is the Key

Term insurance has it all…

Comprehensive financial Security.

Pocket-friendly premiums.

Peace of mind.

There’s only one problem: finding the best and most economical term insurance plan is a HUGE pain.

That is, unless you know where and what to look for.

Go online and zero in on some of the best policies that are available online.

Next, compare their reputation, premium amount and claim settlement ratio.

Now:

Choose the one that best suits your budget, preferences and requirements.

The bottom line?

Check out insurance aggregator websites such as www.policybazaar.com to explore different insurers and finalize on a plan customized as per your requirements.

      1. Ride the Horse, Not the Rider

Today’s super-smart investors know how to enhance their insurance plans using riders and or add-ons. However, buying excessive riders would at times make an otherwise cheaper plan an expensive one without offering better returns.

Let me give us an example.

A critical illness plan could be bought in a better way than buying it as a rider in your term plan.

Therefore:

It makes sense to understand your requirements and then opt for riders wisely.

Now It’s Your Turn

Are you ready to buy a term insurance plan?

The first step?

Keep these 5 things in mind when buying term insurance plans

Now, go ahead put these techniques into practice.

Written By: PolicyBazaar - Updated: 20 December 2020
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Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
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