Some of the Best Term Insurance Plans To Consider If You Do Not Have One Already.
Today's youth are reluctant to spend on term insurance. They consider themselves healthy and live under the wrong impression that they don't need insurance protection. But they tend to forget one undeniable truth; life is unpredictable. There may be situations when term insurance can be of great help.
For example, Term Plan ensures that the family or the nominee of the policyholder receives a death benefit if you meet an untimely demise. This alone is reason enough to get a term plan. Additionally, you will avail the following benefits:
- It secures your family: Term insurance comes to the rescue when you are no longer around.
- You get lower premiums if you are young when you buy the policy.
- You can have longer tenures of policy.
- You can receive tax benefits.
- You can add as many riders (Add ons) as you need.
- Term insurance plans are secure: The claim settlement ratio is high, and the death benefit is guaranteed if you follow the process correctly.
- It is the easiest to understand among all insurance policies.
- It lets you have the optimum amount of coverage required depending on the premium: See to it that you are getting it from a reputed firm.
But to enjoy all these benefits, you should be able to consider the best term insurance plan. Keep in mind the following points to ensure that you are getting the best one:
Consider the stage of your life
This should be the first step in your attempts to explore your options in term insurance plans. Your financial strength and the number of dependents are the factors that influence the policy you take. It affects the amount you can have as the sum assured and the length of the policy's tenure.
Moreover, financial obligations differ from person to person. If you are your family's only breadwinner, your loved ones may be dependent on you for long. The same may not apply to an unmarried individual. Take your financial stability into account when looking for a term insurance plan.
Check the claim settlement ratio
Every company will give an insight into its claim settlement ratio on its official portal. Please have a look at it before committing yourself to that insurer. The higher the number, the more stable your policy will be. You have to ensure that your family will get your hard-earned money at the earliest in the instance of an unfortunate incident.
Know your options
There are mainly two kinds of term plans; the ones that renew at specified timeframes and those that reduce the coverage after a certain age. Renewable term insurance plans are available for 5 years, 15 years, 25 years, and 40 years. There may be restrictions based on your age. For some, it may be 65 years to avail of the maximum coverage.
The policy that renews annually is never the favored option. Companies reject claims that renew at shorter intervals. The one that enjoys immense popularity today is the 25-year term policy. This lets them increase the rate of the policy before a plan expires.
Some insurers even let you convert the plan you have bought; to change it into a permanent life cover. Most often, they don't charge any additional fee for the process. Know your options, understand them deeply, and choose the one that works for you.
Decide the mode of policy payout you want
Insurers let you choose from different policy payout options like:
- A lump-sum amount to your nominee in the instance of your unfortunate death. This will work wonders if you have a pending loan or other liabilities.
- A regular payout for a certain number of years.
- An income that increases with every passing month; this too is available for a specified tenure.
- A section of your sum assured. A monthly income will follow suit. This is meant for those having to bear huge expenses like a child's higher education.
Opt for add-ons
Insurers let you add riders that you feel would work best for you. Return of premium benefit, critical illness cover, accidental death coverage, and waiver of premium benefit are just a few among them to mention. Choose the one which would benefit you and include that rider into your policy to get the most from your coverage.
See to it that you are getting a sufficient sum assured
This is an area where average policyholders often falter. To lower their premium, they end up going for a lower sum assured. When exploring term insurance plans, look for the ones that offer at least ten times your current annual income. If you want, you may even aim for higher. But anything below this is going to be very low at the end of your policy tenure.
If you are doubtful about what to go for here, you may use a human life value calculator. If the ever-increasing premium is your concern, a term insurance premium calculator is the way to go.
Opt for the premium waiver benefit
Certain firms wave off all the premiums if you happen to become disabled or lose your ability to earn an income. See if your insurer allows this benefit. You cannot burden anyone with the premium payment of your insurance policy.
Practice utmost caution when making a choice
Read your chosen insurer's disclaimer with care. You are making a voluntary choice at your discretion. If you incur a loss, there might be no one to blame but yourself.
There exists no doubt as to whether you should insure yourself. However, only you can explore term insurance plans and choose the one that would work best for you.
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