Tips To Purchase Best Term Insurance Plan

Life is very unpredictable and some unpredictable events of life can change everything. Such events can affect the dreams of your family members. You can’t financially prepare for life uncertainties in a day, but you can purchase an insurance plan that will take care of your family’s financial requirements in case an unfortunate event takes place.

Term insurance plan provides life cover and provides financial security of your family in case of your unforeseen demise during the policy term. This plan acts as a financial cover for your family in difficult times. In case of your unforeseen demise during the policy term, the insurance company will provide death benefits to your family allowing them to maintain a healthy lifestyle even when you are not around. Some term insurance plans also provide maturity benefits. 

You can ensure financial security of your loved ones by choosing the right term insurance plan. Mentioned below are some tips that will help you choose a right term insurance plan.

Tips To Purchase Best Term Insurance Plan

Following are some tips that will help you choose a plan that best suits your requirements:

1. Consider Your Family’s Lifestyle:

At different stages of life you may progress professionally and the number of dependents in your family may also increase. You may also face different financial requirements at different times. Before purchasing a term insurance plan you need to figure out the current expenses and future financial expenses. This way you can consider a term insurance plan that grows every year at a fixed rate or you can consider a term insurance plan that allows you to increase the sum assured once in a while. This is the best way to fulfill financial obligations at different stages of your life.

2. Understand Your Family’s Future Financial Requirements

While choosing a term insurance plan you need to keep in mind that in your absence your family is financially secured, is able to maintain a healthy lifestyle and are able to pursue their dreams. It is always advised that you should choose a term cover of 10-15 times of your annual income to ensure that your family is able to meet their daily expenses. 

3. Add Riders

Riders are additional coverages that you can add in your term insurance policy to enhance the risk coverage of your base policy. These riders can be added to the policy with an additional cost. You can choose from a range of riders offered such as Accidental Death Benefit, Accidental Total and Permanent Disability, Critical Illness Benefit, Waiver Of Premium Benefit, HospiCash Benefit etc. These riders provide additional coverage from different circumstances and different stages of life. 

4. Check the Claim Settlement Ratio

The claim settlement ratio of an insurance provider is an important factor while purchasing a term insurance plan. High claim settlement ratio of an insurance provider tells you how smooth the claim settlement of the insurance provider is and it also depicts if the insurance provider is reliable or not.  This factor is very impotent to know if your family can rely on the insurance company to provide the financial support you have planned for them. 

5. Check the Payout Options

The primary objective of purchasing a term insurance is to provide financial support to your family in case of your unforeseen demise during the policy term. Before purchasing a term insurance plan always look through the policy document carefully to know the different payout options available under the term insurance plan. This way the beneficiary can choose to receive death benefit in lump sum, regular instalments or part lump sum and part instalments, according to their financial situation.

Conclusion

With term insurance you can ensure financial security of your family in your absence. This type of plan provides life cover and also provides financial security to your family in case of your unforeseen demise during the policy term. Above mentioned factors can help you select the best suitable term insurance plan that will fulfil your requirement. 

Also read - Terms and Conditions of Term Insurance Plans

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.