Things to know before you buy term insurance plan

Term insurance plan is a type of life insurance plan. Term insurance plan provides financial assistance to your family when you are not around. The insurance company provides the sum assured to the family of insured when the insured dies during the tenure of the policy. There are some term insurance plans which also have the provision for the claim at the time of maturity.

You should buy term insurance plan as it helps you to secure the future of your family especially when you are only bread earner of the family. You must consider a lot of things before buying any plan, as term insurance plan involves a great investment. If you are planning to purchase term insurance plan sometime soon then you are at the right place, here you go:

Buy term insurance plan early:

You should buy the term insurance plan as early as possible. As when you buy term insurance plan at an early age you have to pay an affordable premium rate for greater coverage. But if you buy at a later stage you have to pay higher premium rate for less coverage. And sometimes insurance companies do not offer the insurance to the customers at a later stage as risk is high. That is why you should get yourself insured as early as possible.

Single premium policies not a good idea:

Paying the total premium in one go is really not a good idea as it does not make any sense. People try to pay the whole premium in one go in order to free themselves from the tension of periodic premium payment. You will find a lot of agents who will influence you to make one-time payment; you should not listen to them. Paying premium in installments is quite easy as it does not look like a burden. Regular premium has more advantages than single premium.

Take riders only if you need them:

Riders are the additional benefits that are attached to the term insurance plans. In-built riders and add-on riders are the two types of riders. Some term plans have in-built riders for which you do not have to pay any additional amount. While some term insurance plans have add-on riders that you can get attached to your plan by paying an extra amount. Permanent & Partial Disability, Critical Illness, Accidental Death Rider, Waiver of Premium and Income Benefit Rider are some of the common types of term plan riders. You should get the riders attached to your term plan only you need them. Don’t just get them add only because they are available. For example: You should take accidental death rider benefit only if you are a person who travels a lot. You must choose the riders wisely and most importantly only if you need them.

Dont delay your decision:

There are a lot of people who plan to buy the term insurance plan but very few who actually purchases. These people check online features, benefits and other aspects of various term insurance plans and also make a comparison of various plans. But they fail to take the decisions and keep on delaying. And in the end, they regret it. You should not be like them. Do a lot of research work, compare various term insurance plans and most importantly make the purchase decision. It is better to have something than nothing.

Dont buy a lot of policies:

One or two term insurance policies are more than enough. The best is to have only one policy. Though, you can have maximum two policies. Instead of taking a lot of policies of small amount, you should take one policy of big amount. It is better to take up one insurance policy with a lot of benefits like death cover, maturity benefit, survival benefit, accidental death cover, etc. rather than taking up individual policies with different and fewer benefits.

Prefer insurer with high reputation:

You should buy the term insurance plans from branded insurance companies. A lot of insurance companies are operating in the Indian market. You should be wise enough to select the best insurance company as it increases the chances of the settlement of your term insurance plan claim. Choose an insurance company which has high reputation and goodwill in the market. Also, check the claim settlement ratio of the various insurance companies as it gives you a clear picture of the best insurance company. If a company has higher claim settlement ratio then it indicates that you will not face problem in getting your claim settled. LIC is the best insurance company in the market with the highest claim settlement ratio as it is the only public sector company. For selecting the best insurance company, you can check the online presence of various insurance companies.

The following are the top 10 claim settlement ratios of few of the best and top insurance companies in India. You should skim through this to know and choose from the best before you buy an insurance policy.

Insurance Companies in India Claim Settlement Ratio or Percentage
AEGON Life Insurance  97.11 %
Aviva Life Insurance  90.60 %
Bajaj Allianz Life Insurance  91.67 %
Bharti AXA Life Insurance  92.37 %
Birla Sun Life Insurance  94.69 %
Canara HSBC OBC Life Insurance  94.95 %
DHFL Pramerica Life Insurance  90.87 %
Edelweiss Tokio Life Insurance  93.29 %
Exide Life Insurance  96.40 %
Future Generali India Life Insurance  89.53 %

 

Conclusion:

Term insurance plan provides financial support to you and your family in case of untimely death. Term insurance plans make sure that your family does not suffer any financial hardship when you are not around. You should share with your family that you have taken a term insurance policy. This is not an easy discussion but it is important for the family to know so that they can claim when required. You should do thorough research before you buy a term insurance policy to get the best benefits at affordable premiums for you and your family.