Effective Ways To Look For The Best Term Insurance Policy

A term insurance policy is a type of life insurance policy that provides policy buyer coverage for a pre-defined period of time, often ranging between 10 and 30 years. It is a pure protection plan that pays the beneficiary a lump sum amount in the event of the insured’s untimely death. 

Note that a term insurance policy is designed to offer financial assistance to the insured’s family in the case of an unforeseeable situation, such as death or critical illness.  This makes it crucial for prospective term insurance buyers to look for the best term insurance policy available and enhance their journey toward financial security.

That said, let us check out how we can pick the best term insurance policy easily.

Factors to Weigh in When Looking for the Best Term Insurance Policy

Term insurance plans function on a  risk-sharing basis – in the case of the policyholder’s death, the person insured pays a fixed premium to the insurance provider, who then guarantees to pay a lump amount to the policy nominee.

When compared to a life insurance policy, a term insurance plan accompanies a lower premium. This makes term insurance more accessible for individuals seeking financial security. However, the affordability of a plan should not be the reason why one picks an insurance plan.

Here are a few major factors to consider when looking for the best term insurance policy in India:

• Coverage: The coverage amount should be sufficient to meet the insured’s family’s financial needs in the tragic event of the policyholder’s untimely death. When calculating the coverage extent, it is advisable to weigh in factors such as the insured’s income, active loan repayments,  and financial goals to gain a better understanding of how much corpus would be enough to sustain the expenses.
• Premium amount: Though term insurance policy premiums are cheaper than other types of insurance plans, individuals still compare the rates to avail of the most competitive plan. Comparing the extent of coverage and premiums of leading insurance plans will ensure you get the best of the lot.
• Add-ons: Riders or add-ons are optional features that one can choose to add to their current term insurance policy. Riders such as the critical illness cover, accidental death cover, and premium waivers, are popular examples of these add-ons. Individuals have the option to add as many riders as they want to their existing policy to enhance the coverage. However, adding the rider will also inflate the policy premium. Hence, individuals should factor in their current financial standing to decide whether they can afford multiple riders at once or not.
• Claim settlement ratio: This ratio indicates the percentage of insurance claims the insurance provider has settled from the total number of claims it received in a year company. It is a must that one selects a high claim settlement ratio so that the probability of getting your nominee’s claim approved is high and they can access the financial aid without any hiccup. One can easily check the current claim settlement ratio on the official website of the policy provider. Note that the same is changed every financial year and the ratio is also mentioned on policy terms.

What to Check When Comparing Term Insurance Provider

Here’s a list of a few things that you should look at when comparing term insurance providers:

• Coverage options: Find out the assortment of coverage choices extended by leading companies. It is also recommended to pick an insurance company that offers a vast collection of coverage options so that one can select a policy as per their exact requirement.
• Premium Frequency: Leading insurance companies extend monthly, yearly, half-yearly, and quarterly payment options. This allows policy buyers to pick a premium payment plan that matches their payment capability.
• Riders: Like discussed riders help policyholders customize their insurance plan as per their needs. They also help to avoid individuals from getting multiple standalone insurance plans, thus helping them save money. Hence, look for insurance companies with an array of rider options to choose from so that you can personalize your coverage as and when required with ease.
• Online assistance: Most insurance companies provide instant assistance to customers and help them navigate their doubts with ease. Regardless, insurance companies who extend online assistance to customers with riders, premium waivers, coverage extensions, etc., are superior in quality of service. Hence, look for a policy provider who offers online assistance to help navigate the intricacies of policy better.

Perks of Term Insurance Policy

Once you avail a term insurance policy from a competent provider you are likely to benefit from it in these ways:

• Financial Security: Term insurance plans provide financial security to the insured’s family in the case of their sudden death. The insurance policy’s lump sum payout could help the beneficiaries cover expenses such as existing loans, inflating living expenses, and future financial goals without straining current finances. 
• Affordable Premiums: The cost-effective term insurance premiums allow individuals to access financial coverage with minimal amount. This makes financial security accessible to many individuals and helps them to plan for their future better.
• Tax Benefits: Section 80C of the Income Tax of India Act, allows tax deduction benefits on the paid term insurance premiums. Additionally, the lump sum payment from the insurance company to the beneficiary is deemed tax-free under Section 10(10D) of ITA. This helps save money and protects the corpus.
• Customization of coverage: With the help of riders, individuals can customize their coverage with their choice of add-ons. For instance, those who are likely to develop a chronic illness may consider getting a critical illness cover to be better equipped against such expenses. Besides these individuals can also opt for premium waiver or accidental riders for personalised coverage at a minimal premium.

Keeping these factors and requirements in mind, individuals should proceed to look for the best-term insurance policy. Once everything is in order they can expect to get the best of the lot and plan their financial security with more confidence.