Your term insurance plan, as many financial experts would say, is what you make of it. Sounds confusing? While the definition of the best term insurance plan for you and your family may vary, a lot of it depends on you and how you choose the policy in question.
A term insurance plan is the most basic and popular life insurance offering since it offers a lump sum benefit or sum assured to the policy holder’s family in case of his/her untimely or unfortunate demise. The reason behind the popularity of these plans is also because of their comparatively lower premiums for the coverage that you receive throughout your lifetime.
However, while looking for the best term insurance plan, people often end up making some common mistakes due to lack of awareness more than anything else. Here are some tips that might help you choose the best term insurance plan that meets your needs.
Tips to choose the best term insurance plans:
- Do not skimp on the sum assured for paying a cheaper premium
Many people choose term plans with a lower sum assured for saving on premium payments. However, saving smaller amounts in premium payments every year while sacrificing a lump sum coverage amount, is a mistake that you should avoid by all means. The sum assured should be chosen on the basis of your future requirements and should be enough for covering all your financial obligations in case of your untimely demise.
- Do not opt for a lower tenor
Choosing a lower tenor for the term plan means that you will enjoy coverage only for a shorter period of time. Term insurance plans pay out the sum assured in case of the policy holder’s death during the tenor of the policy. In case the policy holder survives this period, no maturity payment is made. If you wish to get maximum coverage, you should choose the highest possible tenor of the policy for keeping you secure till a higher age.
- Make sure you fill up the proposal form correctly
Many people make the mistake of getting their brokers/agents to fill out proposal forms for term plans. You should endeavor to fill up the form yourself while verifying all the details that you provide in the same. The form is the basis of the final insurance contract on which the policy is issued by the insurer. Incorrect details or misrepresentation of important facts may negatively impact future claims.
- Compare insurance plans before buying
Do not just go for the first available term plan that you see. Make sure that you compare multiple insurance plans and providers before signing on the dotted line. A thorough comparison will help you compare premiums, sum assured/coverage, additional benefits and claim settlement ratio/track record of the insurance company.
These are key tips that will help you choose the
best term insurance plan for yourself. Additionally, make sure that you get a term plan at the earliest since you stand to get higher coverage at a lower premium if you purchase the same at a young age.
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