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Best Term Insurance Tips You Will Read This Year 2019 Research Team | Posted On Thursday, August 29,2019, 03:00 PM

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Best Term Insurance Tips You Will Read This Year 2019



Life is full of uncertainty and you need a term life insurance plan. The term life plan not only protects your family financially, but also helps transfer a legacy if the policyholder dies at a young age. However, when it comes to purchasing term insurance, you must keep certain important tips in mind to get the right term life plan.

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Best Term Insurance Tips You Will Read This Year 2019

1. Buy Insurance Cover at an Early Age:

The age of entry is very important in a term life plan. It determines how much premium you pay. If you avail term life plan at a young age, you get higher cover at lower premiums. Most youngsters are fit and healthy and can easily avail term life insurance plans.

See Also: What is a Term Life Insurance Policy?

2. Think of How Much Coverage your Family Needs:

While purchasing the term insurance policy, keep in mind the financial requirements of family members and their current lifestyle. Do not forget to consider inflation and its impact on the sum assured.

Avail sufficient term life cover (high sum assured) to cover your family. This depends on family lifestyle and loans availed. Use HLV calculator to calculate the sum assured you need.

3. Read the Documents Carefully Before Signing:

Read the fine print of the term insurance plan before signing the agreement. Make sure you read the policy exclusions and understand the policy terms and conditions before availing the plan. Check the types of deaths not covered in term life plans.

See Also: Why a Term Life Insurance Policy is a must?

Online vs Offline Term Plan:

You can purchase online term life insurance plans or offline term insurance plans. Both types of term life plans have the same features and benefits. However, the main benefit of the online term plans is that they are almost 30-40% cheaper than the offline term plans. This is because the insurer doesn’t have to pay insurance agent commission and passes on the benefit.

An offline term life plan may cost Rs 16,000-18,000 annually along with permanent disability rider and critical illness rider, whereas the online term plan (same features) may cost around Rs 11,000 – 12,000 annually for a 25-year-old policy buyer.

Check the Reliability of the Insurer:

Check the claim settlement ratio of the insurer. This is the ratio of claims settled to claims made. A claim settlement ratio of over 90 is considered to be good.

Go for the Medical Test and Pay for Only What You Avail:

Many policy holders don’t go for a medical test before availing term life plans. The medical test is necessary for the insurer to evaluate your current health status and set premiums.

You also get higher cover at lower premiums if you are healthy. Purchasing a term life plan without a medical test may lead to inadequate cover.

A medical test helps get the status on health, pay the right premiums, avail adequate cover and settle claims easily with your insurer.

See Also: 5 Important Aspects to Consider Prior to Renewing your Insurance Policies

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