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Planning to Buy a Term Insurance? Consider These Things First

Updated on: 14 Dec 2021 // 11 min read // Life Insurance
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Life Insurance is a boon to the people who seek a secure future for their family. It helps insured’s family to manage their daily expenses smoothly in case of his/ her untimely demise by providing the sum assured (as per the policy).

There are multiple Life Insurance products available in India and one of the best among them is a Term Policy or Term Insurance. It is cheaper than other Life Insurance products and provides maximum coverage at manageable premiums.

However, before buying a Term Plan, considering following important things can help you grab the best deal and reap maximum benefits of a Term Insurance:

1. Buying Insurance Early Means Lower Premiums

It is advised to buy Term Insurance early in your career to pay lesser. Ideally, you should buy Insurance Policy when you start earning. The policy costs lesser when started earlier, so don’t plan it for a later stage in your life.

2. Assess the Optimum Cover Size

One of the most important factors to be considered when buying a Term Plan is assessing an appropriately-size for the policy. Opt for a cover which would provide an adequate financial support to the dependents to help them live a financially comfortable life even in your absence. Make sure that you are neither overinsured, paying heavy premium costs or underinsured, putting your dependents at risk. When assessing the cover size for the Term Policy, keep your financial objectives and obligations in mind such as all the existing loan EMIs, investments, education and marriage of your child, health of your family members, etc.

3. Select the Right Insurance Tenure

When choosing an appropriate tenure for a Term Plan, make sure it is neither too short nor too long. A shorter period may expose dependents to risk after the period is over. On the other hand, if the tenure is longer than you need, you will have to pay an extra premium, making the policy costlier. It is advised to consider the needs of your family members and figure out for how long they would require your financial assistance. This assessment will help you decide the right tenure.

4. Pay Attention to Claim Settlement Ratio

The Claim Settlement Ratio (CSR) refers to the ratio of claims approved by the insurance company against the total number of claims raised by the claimants in one financial year. Higher the CSR, better the chances for your family to settle their claim when required. So, when buying a Term Insurance plan, pay attention to the insurer’s CSR.

5. Do a Thorough Comparison Before Making the Purchase Decision

There are various insurance companies offering numerous Term Plans, hence, a deep research and comparison can help you in making the right decision. Don’t go for a policy promising lower premiums before analyzing all the features offered by multiple insurers. Sometimes, a slight hike in the premium prices can get you attractive benefits such as permanent disability benefit, accidental death benefit, etc. Check the features, benefits, CSR, and additional advantages offered by the insurance company under the Term Plan to finalize your choice.

For best Term Plans and other Life Insurance Policies, visit mymoneymantra.com, a leading online marketplace for all your financial needs. If you need any assistance to help you decide which policy you should opt for, you can talk to our experience Insurance Specialists.