Do you know the 5 steps to select Right Term Plan?

 

A well-chosen term insurance plan serves both you and your family in many ways. While it is designed to be the financial security for your family in your absence, supporting them in regular expenses, funding life goals and repaying debts if any, the best term insurance plan also inculcates the habit of savings and investment in you. With choices aplenty, it’s therefore a crucial task to pick the most suitable plan according to your needs. So how do you do that? Here’s a set of 5 simple steps to guide you to the right term plan.

Understand your requirements

Typically, term insurance coverage should be a financial backup for your family if you have an untimely demise. Thus, it should be an ideal substitute for your income, suffice to help your loved ones maintain the same lifestyle, act as a corpus for life goals and ensure repayment of all the outstanding loans. So, choose the best term insurance plan based on the number of dependents, your current income, future life goals like a child’s marriage or spouse’s retirement corpus, and EMIs payable.

Check and compare options

Different term plans come with different benefits. While you assess your needs to take your pick, check options for the coverages offered, durations, premium requirements, tax benefits and other features. Choose the one whose offerings best fit your budget and convenience as well as your age, gender, lifestyle and habits like smoking.

Consider inflation

Remember that your term plan is meant to take care of the future needs of you and your family. So, when you reach the maturity of your policy, the cost of your lifestyle will increase in tandem with inflation. Thus, it’s important to choose the best term insurance plan that not only secures you with a life cover but protects you from inflation as well. Some plans come with increasing premiums to help you fight inflation.

Include riders

Uncertainty of life has increased manifold over the past few years, especially through the pandemic. It’s therefore crucial to stay prepared for unexpected crises in life. Insurers often offer optional riders for coverages towards critical or terminal illness and accidental death or disability. Choose the best term insurance plan suited to your needs along with these important riders.

Check for the claim settlement ratio

Suppose you have zeroed in on the best term insurance plan available that offers the most lucrative benefits depending on your needs and affordability. But are you sure that the insurance company is credible in terms of claims settlement? To avoid unnecessary hassles in future, it is immensely important to check the claim settlement ratio of the company, which is available on the Insurance Regulatory and Development Authority of India (IRDAI) website. This is a ratio of the number of claims settled in a year, compared to the total number of claims. So, the higher the ratio, the higher the probability of getting claims settled easily.

So, five easy tips and you are sorted! Choosing the best term insurance plan becomes quite easy as these five steps are there to ensure that you get the optimum benefits in the process. Isn’t that a good deal?

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