6 Most Frequently Asked Questions About Term Insurance Policies

Term insurance policies are currently very popular types of life insurance policies in India. Term insurance plans are widely known as ‘Pure Protection’ insurance plans because this type of plan provides financial security in case of an untimely demise of the life assured during the policy tenure. There are some things that a potential buyer must know about term insurance policy before making an actual purchase. Before purchasing a term insurance policy one should ask some questions that will help them choose a correct term insurance plan.

Below mentioned are 6 most frequently asked questions about term insurance policies that one asks before purchasing a term insurance policy.

6 Most Frequently Asked Questions About Term Insurance Policies

Following are 6 most frequently asked questions about term insurance policies:

1. How much sum assured/coverage amount I should have for my term insurance policy?

This is one of the most asked questions before purchasing a term insurance policy. Before purchasing a term insurance policy a potential buyer should always consider a suitable sum assured. It is advised to opt for a sum assured which is 10-15 times your annual income considering the number of financial dependents, financial liabilities, debts, expenditure and current lifestyle. You should consider a sum assured which will help your family fulfill their daily expenses, pay off your debts, maintain a healthy lifestyle and achieve their goals in your absence.

Must Read: Is Purchasing a Term Insurance Plan an Investment or an Expense?

2. What is the ideal coverage period/term for my term insurance policy?

Most insurance companies offer term insurance plans that provide coverage upto 99 years of age. People often buy term insurance to replace the financial resources for his/her family members in case of unforeseen demise of the life assured. It is advised to purchase a term insurance plan for a longer period of time to keep yourself and your family financially protected against the uncertainties of life.

3. How do I choose a right term insurance policy for myself?

Often this question arises while purchasing a term insurance plan, to purchase a right term insurance you must browse several plans to know which plan best suits your requirements under your pre-defined budget. You can compare term insurance plans on the basis of claim settlement ratio of the insurance company, coverage amount/sum assured, what is covered and not covered under the plan.

4. Is it secure to purchase a term insurance policy online?

It is completely safe to purchase a term insurance policy. Purchasing a term insurance policy is quite convenient, and time saving. You can purchase term insurance policies from the comfort of your home. Online purchase also provides you the freedom to purchase a term insurance plan according to your requirement and pocket.

5. What is the difference between life insurance and term insurance policy?

Term insurance is a kind of life insurance policy. There is not much difference as both these insurance policies provide a death benefit in case of an unforeseen demise of the life assured during the policy tenure. The major difference is, that life insurance policies provide a lump sum in case the life assured survives the entire policy tenure, not all term insurance policies provide this benefit.

6. What is the claim process and requirement for term insurance claims?

Claim process of term insurance is simple, the nominee/claimant is required to follow these steps:

• Claim Intimation - Inform the insurance company about the claim as soon as possible by providing written information about the claim.
• Submit Necessary Documents - Provide necessary documents along with a filled and signed claim form. Documents required for a term insurance claim are original policy documents, claimant’s photo ID proof, address proof, bank account details, proof of death, treating doctor's statement, medical records (recent).
• Claim Evaluation and Settlement - After the claimant has provided required documentation the claim is evaluated, any further investigation or additional documents needed are asked for and the claim is settled as fast as possible.

Also Read: Understanding Term Insurance Claim Settlement

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.