We always worry about the well-being of our loved ones in our absence. But unfortunate situations come uninvited in life, and there is nothing you can do to avoid them. However, you can financially protect your family members in case of uncertainties.
A term insurance plan is one of the most affordable and smartest ways to safeguard your loved ones if something was to happen to you. They will receive a predetermined sum assured amount in case of your unfortunate dismissal.
But with multiple term insurance plans available in the market, choosing the right one can be a daunting task. To help you with it, here are five ways that will allow you to choose the right term plan.
- Choose the right sum assured amount Choosing a term insurance plan with a low sum assured amount will not cover the financial needs of your family. Hence, it is essential to determine your term insurance requirements before buying the policy. Here, you need to take into consideration your income, the number of dependents, and expenses incurred to maintain the current lifestyle. With the term insurance calculator tools available online, you can determine your insurance needs. Generally, the sum assured amount is at least 15 to 20 times more than your current annual income.
- Choose the right term insurance type There are several term plans available in the Indian market. You can opt for level term plans where the sum assured amount is fixed throughout the policy term. Also, the benefits are paid to the nominee in case of your death. Some term plans allow you to increase the sum assured amount annually, while there are a few with decreasing sum assured. Such plans are recommended for those paying off personal loans for houses and tend to have a decreasing liability as they pay the EMIs. A few term insurance plans also offer a return of the premiums after the policy matures. In the end, it is essential to buy a term insurance plan that aligns with your financial requirements.
- Consider add-ons/riders Most insurers allow you to extend the coverage of your existing policy by adding riders. With term insurance plans, you can add critical illness cover at a low cost. Moreover, you can also add accidental death coverage which comes with an increased sum assured amount (if you happen to die in an accident). Another rider pays out an additional sum assured amount in case of disability due to an accident. Also, the income benefit rider offers extra income every year for up to 5-10 years (separate from the sum assured amount).
- Compare different term plans Before you make your mind, it is highly advisable to compare term insurance plans online. You can compare various plans based on factors such as premiums, coverage, benefits and features, and add-ons provided. Do not opt for a term plan because it is cheap as it may not include critical illness cover and in turn, may not serve your insurance-related needs.
- Buy policy online Lastly, it would help if you bought term insurance online from a trusted insurer. The insurer you choose will also have a term insurance calculator on its website that will allow you to determine the coverage and sum assured needed. Moreover, a term insurance plan bought from a trusted insurer online comes at an affordable price, so you save a fortune on your purchase.