We don't consider death as something to prepare for or even deal with when we are young. Nevertheless, as your responsibilities increase, so does the need for a backup plan. Your backup plan often focuses on providing financial security to your family. As a result, Term Insurance Plans have become a very important form of insurance. The purpose of a term plan is to provide financial protection for your family members in the case of an unexpected event.
The first thing people do when selecting a term insurance policy is to compare prices. Of course, price matters. If you put too much emphasis on the price of a term insurance policy, your family's financial stability may be compromised. Let us check the compiled list of eight features you should consider when choosing the right to buy a term insurance plan to ensure that your family doesn't suffer in the future.
Old-fashioned Insurance and no hassle: Select an insurance plan with a single premium option that provides your family with a death benefit guaranteed in the event of your death. It is recommended that the sum assured for your policy be at least 15-20 times your yearly income.
Coverage for accidents: You may want to consider getting the Accidental Death Benefit if you are willing to go the extra mile. An accident insurance policy adds significant value at a low cost by providing your family with stretch-out benefits in addition to a lump-sum payment in the event of an accident.
Family with a history of critical illnesses: According to what you might believe, health insurance only covers hospitalization expenses on an actual basis; it doesn't cover major illnesses that can be very expensive as soon as they are diagnosed. Hence, it is important to have a Critical Illness rider on your term insurance plan if you have a family history of critical illnesses.
Want family to have an income after your death: A portion of your family's assured sum should be available in the absence of you, along with a monthly income. Doing this will ensure they can maintain their lifestyle, which you so diligently and tirelessly built for them. Be sure, however, that the income is tax-free before opting for such an option.
Customized payment receiving: As insurers have recognized how devastating it can be for policyholders to squander the lump-sum payout, they have started providing policyholders with multiple options for payouts, including a combination of a lump-sum payout and fixed or increasing monthly instalments. Make sure you choose the plan that best suits your priorities.
People do not go for peanuts: We tend to choose the lowest premium term insurance plan when we are spoiled for choice. Unfortunately, that isn't a useful criterion to use when we buy a package. Choosing a competitively priced product is always prudent; however, keeping in mind that cheap does not necessarily equal the best.
No high premium; near retirement age: It is prudent to protect your savings as you approach retirement age. Consider a plan that provides you with the option to adjust your premiums as you age if you think your healthy lifestyle will take you across the shore. It is always a good idea to pick a term life insurance plan if you are young and unmarried and if you later get married or have children to increase your coverage. As with the ideal plan, you would be able to lower your premiums when your dependents stop depending on you.
Choose insurer: An insurance transaction is fundamentally a promise to your family that they are protected and secure no matter what happens. A trusted insurance company can fulfil this promise with integrity and credibility. Make sure the plan you choose comes from a reputable company. As a first step, one should look at the IRDA's Claim Settlement Ratio. While the Insurance Act forbids claims rejection after 3 years unless, for instances of misconduct with material facts, it is prudent to evaluate variables other than 3 years, such as solvency ratio, assets under management, corporate governance, and instances of IRDA violations.
The value of your life cannot be overstated. A term insurance plan is an important choice since it involves money and tends to be the family's support system when you are gone. Be sure to make an informed decision and resist peer pressure.