Checklist for Buying the Best Term Insurance Plan

We are living an uncertain life where we cannot predict what may happen in the next hour. With the current pandemic situation, it has become highly imperative to plan for your future. You must financially secure your loved one’s life, so they may not suffer even in your absence.

The best way to cover the unpredictable financial needs is to find an insurance plan. Indeed, insurance plans have proven to be the best saving mechanism that comes in handy at the right time.

There are plenty of insurance plans that are currently available, along with lucrative benefits. It depends on you to find the ideal policy that will cater to your needs and offer comprehensive coverage.

If you are also in search of the right insurance plan for yourself or your family, you have come to the right place.

What Is a Term Insurance Plan?

Term insurance is a specific policy that has an abundance of financial benefits. This plan offers you the assured sum for a certain period of time that specifies the “term.” One of the major highlights of this policy is that if the insured dies before the maturity of the plan, a death benefit is paid to the family.

It falls in the category of life insurance but for a predefined period and comes with a death benefit as well. Today, you can easily buy a term plan online as there are many insurance houses ready with their products.

Though the term plan was started with a basic structure, as more and more insurers started offering it, the plan became complex. There is a wide variety of term plans today that comprises different features and policy benefits.

Factors To Consider Before Choosing A Term Plan

Indeed, choosing a term plan is a crucial decision as you will be investing your money for a stipulated period of time. It not only covers the financial requirements of your loved ones but also nurtures their dreams even in your absence. Hence, you need to make a well-informed decision while picking the policy.

If you are new to insurance buying, you must consider the below factors while picking the best term plan for yourself. 

#1 Be An Early Bird

There is no particular or the right age to buy term insurance online. However, the earlier you purchase, the better the benefits. You must understand that premium keeps on increasing with your age and if you develop any disease. Once you are considerate about the amount you want to cover, it must not take you long to take the policy.

#2 Buy It Till Your Retirement Age

Does a 30-year-old person need a term plan till 80 years? The answer is no. Buying a term plan for the longest tenure is not the right way to go about it. Not many of your family members will be depending on you beyond retirement age. You will have more responsibilities when you are young, and it goes till your retirement. So, buying a term plan till your retirement age is a beneficial option.

#3 Don’t Fall For Per-Day Premium

Many insurance houses have started advertising their term policies by providing per day premium. For instance, a term plan of 1 Crore at ₹25/day. These per day premiums don’t need to be suitable for all. Like it might be available for younger clients and for policy up till 40 years. So, it is essential not to get misled by this marketing gimmick.

#4 Don’t Go For Single Premium

There are two options in terms of the premiums; either you pay a single time premium or keep on paying regular premiums monthly or annually. A majority of people go with a single premium because they can afford a lump sum payment. However, it doesn’t make sense to invest a lump sum amount and wait till the maturity period.

#5 Choose Your Riders Wisely

Riders are the add-ons that add value to your term plan. There are different types of riders available for a term plan. Don’t just add them for the sake of adding; you must have thorough knowledge about their benefits, or you won’t be able to make the most of them. For instance, if you travel a lot, taking an accidental death rider is highly beneficial and makes sense. The other type of riders available with term plan is a waiver of premium, permanent, or partial disability, critical illness, and income benefit rider.

#6 Buy The Most Basic Version Of Term Plan

Today term policies are available in different flavors that make it difficult to choose one from the rest. However, it is best advised to go with the basic version that pays a lump sum amount on your death or at the maturity of the plan. Don’t get lured by the variation that different insurance houses serve you with their policies. Staying basic will remove the complexities from your policy and provide you with better benefits.

The Bottom Line

A term plan can be highly beneficial if you know the right way to use it. There are many things you need to be considerate about while picking a term policy. The above mentioned were some of the common things you need to watch out for.

Don’t let your family suffer financially in your absence. Cover their needs with an ideal term insurance policy. Make sure to keep the above checklist handy while picking the best plan.