Investing in a term policy is an important part of financial planning. Such a type of insurance provides financial security to your loved ones in case of an unfortunate event of death. This ensures peace of mind, as you are assured that your loved ones may meet their financial obligations even in your absence.
Numerous insurance providers offer term insurance policies with varied features and benefits. Selecting the best plan from a plethora of options may become a cumbersome task. Following are six tips to help you choose the best-suited term plan according to your needs.
1. Analyze the coverage amount
It is important to consider the number of dependents in your family while deciding the coverage amount. Besides, you may consider choosing a higher coverage amount in case you are the sole breadwinner of the family. You may also assess the inflation factor while fixing the coverage amount.
2. Determine the term of the policy
Another important consideration is the term of the insurance policy. You may take into consideration the age you wish to retire. The policy tenure may be calculated as the difference between the desired retirement age and your current age. Most insurance companies have a term insurance calculatoron their websites. You may use it to identify the best term for a policy.
3. Check the claim settlement ratio of the insurance provider
Claim settlement ratio refers to the number of claims that are settled by the insurance provider against the total number of claims filed. Higher the claim settlement ratio, greater is the chance of receiving the sum assured amount. You may, therefore,compare the claim settlement ratio of various insurance providers before zeroing in on a single one.
4. Choose the best-suited riders
Insurers provide numerous riders along with a term insurance policy so as to enhance the plan coverage. Some of the available riders include loss of employment cover, disability rider, and waiver of premium rider, among others. You may compare various riders and make a well-analyzed choice based on your specific needs and requirements.
5. Read the fine print of the policy document carefully
It is imperative to go through the terms and conditions of the policy document. This will help you understand various aspects, such as the policy features, benefits, inclusions, and exclusions, among others. Doing so will prevent any bad surprise or hassles in the future.
6. Shop online
Most insurance providers have an online presence.These websites not only contain comprehensive details of the insurance policy, but also enable you to purchase the policy with ease. Buying an insurance policy through the Internet is a recommended option as it is cheaper than an offline plan. Since the cost of paperwork is reduced, insurers pass on the benefit of lower costs to their customers. Also, the hassle of dealing with an insurance agent may be completely avoided.
A term plan offers the much-needed financial protection during difficult times. You may take the aforementioned tips into consideration and invest in the best term policy.