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Things About Term Insurance You Always Wanted to Know Research Team | Posted On Monday, October 14,2019, 05:27 PM

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Things About Term Insurance You Always Wanted to Know



The term insurance is a must-have policy that allows you to shield your family in situations when the unthinkable happens. Term insurance plans are a way to secure your family’s financial future without spending too much. Let’s take you through some of the important things about term insurance plans that you always wanted to know:

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How Much Does The Term Life Insurance Cost?

Term insurance is the most affordable type of life insurance plan. Term insurance is designed to fit everyone’s budget and coverage needs. The death benefit offered is much greater than the total premium and the policyholder receives much more than the invested amount. The basic plan comes with the benefit of riders that can be added to get extra coverage on the policy. The premium amount is determined based on the several factors like the sum assured, riders availed, tenure and so on. Additionally, an online term insurance costs much lesser than offline term insurance, as it involves lower operational cost and no intermediary charges.

The cost of life insurance differs for smokers and non-smokers. Many insurance companies offer better insurance rates for non-smokers and female insurance buyers. The rates become much more affordable when the policy is availed for a longer tenure.

See Also: Term Insurance Plans with Return of Premium

When Life Insurance is the Best Option for You?

The life insurance policy is an ideal option for you for the following scenarios:

  • When you want to leave an inheritance for your family.
  • In case you want to make sure your family gets protection throughout your service years.
  • In case you are an active earning member of the family and require insurance coverage even after your retirement.

Medical Tests for Term Life Insurance:

A pre-policy medical test determines the status of your health and thus allows you to understand the coverage. It also helps the insurers determine the premium rates and loading charges while issuing a policy.

For example, a person having a poor medical history or is a drinker/smoker may have to pay extra premiums than a person who has no ailments or is a non-smoker.

The medical exam is mainly undertaken if the buyer has crossed a certain age. The medical test covers your height, weight, blood and urine test, HIV test and medical history. The test confirms whether you are a smoker or not, and it looks into certain specific medical problems. It is always wise to opt for the medical test due to several reasons. Firstly, you can get your health report and decide the coverage amount. Secondly, the insurer undertakes the cost of the medical test and will allow you to avail higher coverage if required. Thirdly, it will negate chances of claim rejection citing any medical condition.

See Also: Benefits of Buying Term Insurance Online

How Much Term Insurance You Need?

Before buying term insurance you must determine your coverage requirements based on your current salary, the lifestyle expenses of your family, your debts and liabilities and also inflation. The sum assured of your term insurance plan is meant to make the financial life of your family easier. Inadequate coverage will therefore, leave your family in the face of a financial crisis along with the loss of the sole earning member of the family.  While deciding the amount of coverage you need, keep in mind the following points:

  • Funeral cost
  • The Amount required to replace your income
  • Your liabilities like children’s education, healthcare of your dependent parents etc
  • Your long term loans, mortgages and debts

You may opt for riders on your policy once you evaluate your basic insurance requirements and the payout you need to keep your family secure.

See Also: Be 100% Sure When You Buy Term Insurance

Term Life Extras and Riders:

Term life insurance also comes with add-on coverage know as riders. The riders enable people make changes to their basic plans and increase coverage as per their requirements. For example, a person who has a family history of critical illnesses may opt for a critical illness rider to receive compensation if diagnosed with such a disease while still leaving your family with the remaining life insurance benefits.

You may also opt for some other rider benefits like the waiver of premium that grants waiver on your premiums if you are disabled due to an accident or accidental benefit rider that offers an additional payout in case of death due to an accident.

Some of the riders offered by term insurance plans are as follows:

Shop Around for Term Life Insurance:

To purchase a life insurance plan you may seek insurance options from both online and offline sources. To get quotes of life insurance plans conveniently, you may log in to the insurer’s website and request a quote based on your requirements. In this way you can compare the policies and get the best features and market rates. However, make sure to compare similar policies from each insurance company.

While purchasing your term insurance you must check the solvency ratio and claim settlement ratio of your insurer. You can rest assured that your family will receive the death benefit in case of any mishap.

Once you are satisfied with the policy features and the financial stability of your insurer, you may choose a term insurance plan that is right for you and your family.

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