10 must-ask questions before buying a Term Insurance

Buying a new insurance policy is challenging because it involves various things, and one should get tips from experts to handle complex issues. Moreover, it will help a lot to gain more ideas that will help make get the right insurance. For example, a term insurance policy offers a death benefit, add-on features, and rider benefits for policyholders enabling them to overcome unwanted problems. On the other hand, those who want to purchase a new policy should know the plan and further details.

Shiela wanted to buy a term plan for her family. However, she got confused with varied options and, as a result, could not make a decision. That is why a person should ask specific term life insurance questions to themselves when buying a policy. So, Shiela researched online, cleared her doubts, and purchased a plan after comparing the prices and other features.

Questions to ask before buying a term insurance plan

Question 1. What are the things covered and not covered in a plan?

Anwer: While buying a new term plan, one should know more about the things covered with more attention. This is because it will help to determine the purpose properly. For example, the term plans offer a death benefit, critical illness coverage, accidental disability cover, and other features to ensure high protection. At the same time, some insurance providers unlock certain special features at different periods. Hence, it is imperative to know the policy documents to understand the inclusions and exclusions in detail.

Question 2. Does the term plan provide coverage for smoking?

Answer: Smoking and alcohol will reduce the life expectancy of a policyholder, and a smoker should reveal the same to the insurance provider. It is applicable for current smokers and future smokers that will help claim the amount with ease. On the other hand, the costs may vary from one company to another company in a location.

Question 3. Do premium rates change over time?

Answer: The premiums of term insurance plans may change over time due to inflation and other factors. Therefore, a new policy buyer should compare them online, which will help make a better decision. An insurance company will increase premiums for high-risk factors such as smoking and alcohol consumption. The revaluation is reasonable and will benefit a policyholder in several ways.

Question 4. Is it possible to claim successful ratios in case of accidental death?

Answer: The term plan allows a policyholder’s family to claim amounts with high successful ratios in case of accidental death. In addition, most insurance companies offer disability coverage caused by accidents to manage financial risks with ease.

Question 5. How do insurance companies pay amounts to a policyholder?

Answer: An insurance company pays the sum assured amount to a nominee in the occurrence of the insured’s demise. It pays out the benefit amount in a lump sum or monthly income or in a combination of both lump sum and monthly income. So, a policyholder can choose the options based on preferences and other factors.

Question 6. Can a person buy multiple policies?

Answer: A policyholder can purchase more than one policy. First, however, they should talk with an insurance service provider to know whether it offers the facility or not. This is because most companies will guide policy buyers to claim settlements without any hassles. In most cases, an insurance firm works closely with customers to evaluate their requirements while buying a policy.

Question 7. What happens when a policyholder dies outside India?

Answer: A policyholder should inform a company after migrating to a foreign country. For example, many insurance companies don’t offer coverage for death outside India, and a policyholder should seek support from them to gather more information. On the other hand, NRI’s can purchase a separate policy from a company to meet essential needs. They can also submit the documents and other things while buying a plan.

Question 8. Can a policyholder surrender their term insurance plan?

Answer: This is one of the term insurance questions to ask when buying a new policy. Sometimes, policyholders can face trouble in paying premiums due to various factors, and surrendering a policy is the only option available. However, they would not receive any amounts from an insurance company because term insurance plans cover only death benefits. A person shouldn’t surrender their policy because it will result in more problems. Therefore, new policy buyers should think twice or more when returning a policy to an insurance provider.

Question 9. Do policyholders get any tax benefits after choosing a plan?

Answer: A term plan offers tax benefits after buying a policy from an insurance provider. Every year policyholders will get a tax relaxation of up to 1.5 lakhs that will help save money. On the other hand, it is imperative to read the terms and instructions before purchasing a plan from a company. The policyholders should know the taxation laws while choosing coverage that will help invest money accordingly.

Question 10. How much coverage does a policyholder need?

Answer: When buying a term plan, one should determine how much coverage a policyholder needs that will help meet exact needs. A policyholder should determine the premium amount with an online calculator by entering the age, income, and other details. This will help buy term insurance depending on the budget and other factors. New policy buyers can even compare the quotes of multiple insurance providers while purchasing a plan.

The bottom line is anyone who buys new term insurance should ask the above questions as it will help them to spend money based on the choices that give ways to live a trouble-free life during unforeseen events.