We list the steps you need to take before buying a term insurance plan.
It is said that nothing is permanent except change. This axiom is certainly true of life. Life has a way of throwing unexpected curveballs at you when you least expect them. You could be coasting along, happy and successful in your life and wanting for nothing, when the unthinkable happens. Or you could be down on your luck when suddenly your fortunes change.
The point is, life is completely unpredictable – there’s always a bad phase that comes after the good. But instead of going through life looking over your shoulder and fearing the worst at every turn, you can set your mind at rest by taking proactive steps to guard the ones who are dearest to you. Buying a term insurance plan is a good way to ensure the safety of your loved ones in your absence.
What is term insurance?
Term insurance is a life insurance policy that protects the interests of your loved ones in the case of your absence and your income. Though you may no longer be present in their lives, they can continue living off the huge insurance corpus that comes their way. The term insurance plan also has the most affordable premium payments though the sum assured is quite high.
So how can you choose the right term plan in India? Consider the following points[1]:
* Find the best term plans in India. The best term plans in India are those that have flexible pay-out options, a high sum assured, affordable premium, easy claim settlement process and a high claims settlement ratio. Go online and look up forums where customers will attest to the best term plans in India in 2018. These are opinions based on personal use, and are full of recommendations about which plans to buy and which insurers to avoid. Meanwhile, you can check with an experienced insurance broker about good term plans in India that are well suited to your needs.
* Assess future requirement.
Each person’s dreams and goals are different, so it is churlish to imagine that if one person needs Rs 50 lakh for the future, another will also make do with the same amount of money. Every family’s needs are different – while one may not have children but a spouse and aged parents to support, another may have a family of five, where each child may want to go abroad to study. Naturally, the needs of the second family will be more diverse than those of the first. Use a term insurance calculator and list the desired sum assured you expect from the term plan in India. Choose the term for the policy (i.e. the tenure) and find out the premium payable. You can increase the premium payment if you wish[2].
* Consider the premium payment.
Most people buy term plans because the premiums are most affordable while the sum assured is quite high. In fact, the premiums are the lowest across term plans in India, as compared to other life insurance products. Before you buy the term plan, use the premium calculator to find the best fit of premium payment. The most popular term plans in India in 2018 are the ones that cost less than Rs 20 per day in lieu of premium payments[3].
* Look up pay-out options.
Most term plans in India pay a lump sum pay-out the policy holder’s family on termination of the plan. However, newer term plans in 2018 have flexible pay-out options that you can choose basis your family’s future needs. For instance, you can choose a monthly pay-out if you feel that the term plan corpus can help run the household. Or an annual pay-out if your children’s foreign education is your primary concern.
* Understand the claim settlement process, and explain it to the family.
Before you buy the term plan, look up the insurer’s claim settlement process for the same. Request a call back or initiate an online chat with the company to understand the procedure if the same is not outlined on their website. The easier the settlement process, the better it is for your loved ones in the future. After understanding the process, sit down with your family and explain it to them in detail. As grim as the conversation may be, it is an important one to have. The family members must also know where the policy document is kept and how to file the application when the need arises.
[1]https://www.basunivesh.com/2018/02/20/top-5-best-term-insurance-plans-in-india-2018/
[2]https://economictimes.indiatimes.com/wealth/insure/looking-to-buy-a-term-insurance-plan-heres-a-low-down/articleshow/57450565.cms
[3]https://www.avivaindia.com/term-plan/aviva-iterm-smart
