What is The Right Way To Choose A Term Insurance?

Going through different term insurance quotations can be a daunting task. There are a number of insurance providers in India That  different types of term insurance plans. Therefore it is imperative for you to know what makes one different from another. And if you have clarity as to why you need a term insurance plan, it is easier to select the insurance provider and the type of a term insurance plan would work the best for you. 

Keeping your best interest in mind we have it together with certain facts that you must consider beforehand to make the right choice. 

5 Ways To Buy A Term Insurance Plan 

Here's a list of tips that you need to keep in mind before buying a term insurance plan: 

1. Claim Settlement Ratio

It is one of the most important parameters to decide upon an insurance provider and the term insurance plan that it is offering. You can find the claim settlement ratio of the term life insurance companies in the IRDAI's annual report. You can also check on the insurer's website as to how many claims they have settled in a year. And it should be maintained over the years. 

2. Compare Different Term Insurance Quotations

Decide among three or four insurance companies after comparing their policy features and benefits. Get the quotations from the insurance company website. Once you get all the term insurance quotations, compare all of them and choose the one that caters to most of your needs and preferences in terms of the policy period, budget, premium and coverage. 

3. Selecting The Right Term Insurance Coverage

Have a fair estimate of the amount of your term insurance plan, go through the plan benefits, premium, and limitations. The basic rule of buying term insurance cover, i.e., 15 to 20 times of your annual salary might not fit. The threshold might vary from person to person. It will depend on your salary, number of dependents and future financial goals. 

4. Time Period

Duration is a crucial factor when it comes to selecting the right term insurance plan. If you want a life long insurance plan to protect your family after your death then a whole life insurance is the right choice. If you need a term insurance plan for a certain period you can go for a term insurance. To pay off debts you can buy a plan for the specific time. 

5. Term Insurance Premium

If you want to buy a term plan just for investment or tax saving purposes then premium plays a crucial role. For instance, the premiums for ULIPs and whole life insurance policies are on a higher side as compared to term insurance plans. You can go for a term insurance plan with a nominal premium. Because your policy can lapse if you fail to pay a premium on time. But if you are more concerned about the maturity benefits then you can give it a skip. 

Take Away

Choosing an adequate term insurance cover among so many options can get confusing. However, you can abovementioned tips in order to buy the right policy from the right insurance company at the right time. You can ensure your family's peace of mind and secure the family's future by easily purchasing a term plan online. 

Also read - Term Insurance Plans With Critical Illness Rider- Worth The Purchase?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.