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Term insurance is something that you should add to your portfolio at the earliest. It provides life coverage to safeguard your family financially in case you pass away within the policy period. You should certainly choose the same since you will know that your loved ones will be safe when you will no longer be around. Yet, how can you choose the best policy for your family’s requirements? Here are a few pointers worth considering.
Steps to Choose the Best Term Insurance Plans
For selecting the right term insurance policy, here are the steps to follow for selecting the best possible option as per your requirements. :
- Select the coverage amount- : You should first zero in on the right amount of coverage before anything else. Calculate this by factoring inflation into the mix along with household costs in the future, your debts/liabilities, and other needs like the higher education of children. The amount that you get after subtracting your current assets from this figure will be the coverage that you require. A common thumb rule is to select coverage that is at least 10-20 times your annual income as well.
- Check plans offered by insurance companies- : Examine the term insurance policies offered by multiple insurance companies. Check whether they are offering your desired coverage, along with the right tenure (can be between 10-30 years) and other features.
- Compare benefits and premium amounts- : Make sure you compare the premiums payable for multiple-term plans and the benefits/features that they’re offering. These may include flexibility in the premium payment frequency, increasing the coverage amount in the future or options like single premium vs. regular premium payment plans.
- Check the policy application requirements- : Take a look at the eligibility and application guidelines for the term plan, along with the medical test guidelines if needed. Choose an insurer with a smooth application procedure that does not take much time.
- Finalise your decision based on CSR- : The claim settlement ratio or CSR is another vital factor worth noting when choosing any term insurance plan. Opt for a company with a higher ratio in this case. Additionally, review the claim rejection ratio, average settlement time, and grievance redressal mechanism to ensure reliability. If it works out, select the company’s term plan and submit all your documents likewise.
- Check for riders- : While buying the policy, look for riders that you can add to widen the coverage scope. Several term plans have riders, like accidental disability, premium waiver, critical illness, or income benefit riders, that you can add for higher protection.
These are some of the steps to follow while choosing the best term insurance plan that will financially safeguard your family in case of any untoward event in the future. You should keep all the above-mentioned pointers in mind and examine them carefully before finalising your decision. The right term plan is a must for gaining mental peace and providing for your family without any hassles. You will know that they can independently cover their costs without having to depend on anyone, even when you are not around.