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What You Should Know Before Buying Term Insurance Plan?

A family is the most valuable possession in the life of anyone. Believe it or not, the well-being of the family is of prime importance for anyone. No matter what stage of life, it is important that the financial future of the family is always secured so that even if you are not there tomorrow finance is never a hurdle for the family.

Buy the best term plan in India that will act as a financial cushion and support to the family in case of any adversity. When selecting the term plan, assess the requirements of the family carefully.

In case you are wondering what is a term plan. Read the article below to have a better understanding.

What Does Term Insurance Plan Mean?

Term insurance policy is essentially a product of life insurance that offers coverage in regards to finances to the policyholder for a certain time frame.

In case the policyholder passes away during the policy tenure, the beneficiary or the nominee will obtain the death benefit by the insurance company. Before you buy a term insurance plan it is important to understand its features as well that would help to make an informed decision.

The key intent of buying the term insurance plan is to provide life cover and financial security to the family. Now that you understand what term insurance is, now let us go ahead and understand the importance of a term plan.

Why Buying Term Insurance is Better?

The term insurance plans offer pure life cover, which means there is no profits or the savings component.

The term insurance plans are designed in a way that makes it one of the most pocket-friendly insurance products when compared to other products available in the market.

The policyholder can opt for a larger life cover at the most affordable term insurance premium when compared to an equivalent endowment plan. Listed below are some of the features that make a term insurance plan a must-buy:

  • Large Life Cover: The term plans are pocket friendly and easily choose for a higher life cover. For instance, a 35-year-old individual can obtain a term insurance plan with cover up to Rs 1 crore for a 35 years term by making the payment of the premium timely.
  • Innovative Features: Undoubtedly the different insurance companies have been instant to be innovative in respects to what is term plans. For example, the insurance companies have been quick in offering term insurance premium at a special price for females or non-tobacco users. Besides, buying term insurance online is more convenient and involves less paperwork and most likely no medical test, however, this may vary from the insurer to insurer.
  • Enhanced Cover: There are insurance providers that provide the flexibility to enhance the life cover within the critical stages of the life of the policyholder. For example, if the policyholder is getting married, then life cover can be enhanced by 50 per cent and when turning into a parent it can be enhanced up to 25 per cent. This gives the flexibility to the policyholder to initiate with a modest cover and enhance the cover at the required point in time and when one is capable enough to pay the premium amount.
  • Rider Benefit Options: The rider benefit options make the plan more enhanced and secured. For instance, if the policyholder opts for a critical illness rider then it will be beneficial if diagnosed any critical illness will receive the sum assured as per the plan. This will be an addition to the death benefit of an equivalent sum over the policy term. There are various other riders such as waiver of premium, accidental death benefit, and so forth. The policyholder can select the rider options on the premise of the needs that will make the life cover meaningful and suitable.

Why Should You Buy Term Insurance Plan Online?

In these tough times of COVID-19, it is highly recommended to buy an online term plan. Well, doing so is as easy as placing an order of a food product browsing the web.

The following are some of the reasons to buy the best term plans online:

  • Hassle-free: One of the key aspects of buying the term plan online is the facility of making the payment of term insurance premium that is quick and secured. You can initiate the premium payment to secured gateways that is neither time taking nor involves much of hassles.
  • Cost-Effective: When you buy a plan online it will be more cost-effective when compared to buying the term plan offline that offers the same benefits and features. This is so because the is no involvement of the mediator in the procedure of buying the plan and the term plans offer lower premium rates when bought online.
  • Flexibility: When you buy a term plan online, you get the flexibility to compare different plans that are offered by different insurance companies in India. You can easily compare the term insurance premium quotes and the features and benefits being offered. In case you get confused or have a query you can get in touch with the customer support instantly.

How Important is to Assess the Needs of the family?

When planning to buy a term plan it is of prime importance that you are well aware and have a good understanding in regards to the financial requirements of the family before you zero down a certain term plan.

Make sure that the plan you choose should have adequate life cover so that the prerequisites of the family are taken care of and not compromised even in your absence tomorrow.

Therefore, you need to take out, analyze every source of income, the number of dependents in the family, the website and liabilities, the lifestyle expenses. Once you are clear with these then you should consider the life objectives of your spouse, children and parents.

Now, you need to calculate the term insurance premium that you would end up paying. For this, it is suggested to use the term insurance premium calculator online. Ideally, the coverage sum should be for a term plan should be fifteen to twenty-five times of the yearly income on the premise of your age. Do focus on the claim settlement ratio of the specific insurance company as this will help you to make a wise and an informed decision. A top claim settlement ratio implies that the insurer does its best so that the filed claim by the nominee is resolved as soon as possible.

The Bottom Line

The best time to buy the term plan is when you start earning and have family members that are financially dependent on you.

In the times of duress, a term plan will provide financial coverage to the family when the income generator is no more. The primary objective is to keep the family financially stable and happy.

A term plan ensures that the everyday expenses are duly met and the family can accomplish the dreams. Besides, as the breadwinner of the family, you will be at peace that the future of the family is secured even in case of any unfortunate incident that might occur.

Written By: PolicyBazaar - Updated: 03 February 2021
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