As humans, we do our best to take precautions and protect ourselves against life’s uncertainties. However, there will be times when things are not in your control. What will you do then? How will your family manage the financial liabilities without you? These concerns get amplified if you are the sole breadwinner of the family. But did you know that you can hedge this risk by directly investing in the best term life insurance plan?
A term life insurance plan is a low-cost life insurance product that gives you a high cover at affordable premiums. Your family will be able to maintain their lifestyle and afford quality education for your child, even if you are not there anymore. The best term life insurance will be able to pay off your debts and take care of all the liabilities with ease.
Since life is full of uncertainties, investing in the best life insurance plan foryour loved onescan act as a financial safety net during emergencies. This plan will act as the replacement income for them when you are gone.
But despite its benefits, you will need guidance in choosing the right term plan so that it provides your loved ones with sufficient cover that you can afford easily throughout the policy term.
That being said, here are a few things that you can keep in mind when you are planning to buy a term life insurance plan.
1. Keep your Dependents in Mind When Determining the Cover Amount
The first step towards choosing the best term insurance plan is deciding an adequate sum assured. To determine this value, you need to keep various factors in mind, such as the number of dependents in your family, age and financial requirements.
Moreover, the financial responsibilities of a single person are not the same as that of a married person. Ideally,the cover amount should include future needs, debts and liabilities, inflation, and lifestyle habits when calculating the sum assured. The general rule of thumb is to opt for a sum assured that is at least 15 to 20 times your current income, so that it may cover all possible financial responsibilities.
2. Keep the Term Insurance Premium in Mind
Premium is an essential factor when purchasing an insurance plan. Different premiums are charged by different insurance providers depending on several factors. However, pricing is not the only thing that defines the efficiency of a plan or reliability of the insurer.
Remember choosing the best term insurance plan foryourself is not always about going for a policy that has the most expensive premium. Similarly, a policy that offers a low premium doesn’t necessarily have to be one that provides insufficient coverage. You need to take a combination of factors into account when choosing an insurance plan. Once you have narrowed down your choices, you can look at the cost to make the final decision. However, do not compromise on policy benefits or the coverage amount while choosing the best term life insurancefor yourself.
3. Ease of Purchase
Not many people take the ease of purchase into account when choosing the best term insurance planfor themselves. However, you can now buy policies online that can be accessed from anywhere, anytime. They are significantly cheaper than their counterparts.
4. Claim Settlement Ratio
What good is a term insurance policy if it doesn’t live up to its promise of reimbursement when the time comes? To ensure that your life investment is in safe hands, you must check the claim settlement ratio of an insurance provider.
This number indicates the claims settled by an insurer about the claims raised in a given year. The higher the number, the better are your chances of receiving the benefit amount. It is a good practice to buy your insurance policy from a company that has a settlement ratio of at least 90% and above.
5. Choose The Riders That Will Maximize Your Coverage
Apart from the death benefit that your dependents will receive in case of your passing, you can enhance the policy coverage with the help of riders. You can maximize term insurance benefits with Riders such as critical illness cover, loss of employment cover, waiver of premium cover, or disability cover can be appended to your insurance policy by paying a small fee added to your existing premium. These riders cost less but add considerable value to your basic term plan.
Most people choose the best term insurance plan for themselvesbased on price alone. However, investing in the right insurance policy requires you to compare different plans. Online term insurance plans from reputable insurers such as Max Life Insurance allow you to review and compare plans before investing. You can choose the policies that offer maximum benefits at low premiums amounts. These plans can be purchased online quickly and with ease.