Avoid These Crucial Mistakes Before Purchasing a Term Insurance Plan

Due to this ongoing pandemic situation because of the novel coronavirus, people around the globe have got both scared as well as aware in several ways. Getting both physically as well as financially affected due to the deadly virus, buying a term plan has become a priority for many people. However, due to a variety of term insurance plans available in the market, policy buyers end up getting all confused and thus purchase a wrong insurance plan. Given below are some of the mistakes that a policy buyer can avoid at the time of purchasing a term insurance plan.

• Not Doing Premium Comparison

Under a term insurance policy, the cover amount to the premium ratio is high, that is because by paying a small amount of premium one can receive a higher sum assured amount. Still, there would be a huge difference between the premiums paid by different insurance providers. Thus, it is always advisable to do a premium comparison for term insurance offered by different insurance companies before deciding to buy a plan. Also, keep in mind that the lowest premium amount may not be an ideal option for you unless it provides a comprehensive insurance cover.

Must Read: How to Select the Right Term Insurance Plan?

• Purchasing Plan for Lower Tenure

The objective of buying an insurance plan is to ensure the security of all your major life goals. Regardless of your present age, purchase a term insurance plan at least till 60 years of age. Various major life goals like purchasing a home, your child’s education are all generally met by term insurance plan.

• Not Including Riders

Other than risks associated with life because of natural causes, there are several risks associated on the other fronts too. A physical handicap may lead to reduction in earnings of an individual whereas a medical emergency can also greatly impact an individual’s savings. These insurance plans also offer a means to include other optional benefits to policy by adding riders like disability rider, accidental rider, critical illness rider, etc.

• Purchasing Insurance Plan Late

In case you are young and unmarried, purchasing a term insurance plan may not be your immediate priority in life. While, you need to consider again as your old parents might be dependent upon you financially or you might be getting married in a few years down the line. The premium payable by you at a younger age may be much less as compared to the premium payable by you at a later stage in life. In case you buy a term plan at an early age, then you will have to keep paying the same amount of premium every year for the next 25-30 years.

Final Word

The financially distressing times that your family may have to go through in your absence would be less serious in the presence of financial aid. Undoubtedly. It is a smart move to make sure that you are with your family members at each phase of life. Moreover, ensure to avoid the afore-mentioned points at the time of purchasing a term insurance plan.

Also Read: Tips to Choose the Right Term Insurance Plan

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.