How to buy the right term insurance in 3 easy steps?
Nowadays, insurance companies offer different types of plans for customers that cater to their requirements. However, customers who want to buy a new insurance plan should keep certain things in mind that will help accomplish goals in the coverage process. Not only that, it gives ways to ensure high protection from financial troubles and other problems to ensure peace of mind. A term insurance plan is a type of life insurance policy that provides methods to get comprehensive coverage for a certain period. Moreover, it contributes more to gain more benefits when it comes to critical illnesses and other things.
Buying a term life insurance policy involves several things, and people should evaluate them in detail. This, in turn, gives ways to overcome complications during the claim process. Also, choosing the right type of policy will help a policyholder provide high-level protection for a family during critical situations. On the other hand, it is wise to pick a plan with a high sum insured amount to reduce the financial burden when the earning member of the family is not around or suffers from partial/complete disabilities due to injuries.
3 Easy steps to buy the right term insurance plan in India
Here are the three steps policy buyers should follow when purchasing a new plan as mentioned below:-
- Knowing the difference between sum insured and sum assured
- Choosing the policy period carefully
- Selecting the right insurer
1. Knowing the difference between sum insured and sum assured
Most insurance policies use some terminologies that refer to the coverage amount, and a buyer should understand them properly. Sum insured and sum assured are the two most used terms by insurance companies while buying a policy.
Sum assured is a pre-defined indemnity amount determined by an insurer that offers death benefit as well as matured benefit. For example, a nominee can claim the amount when a policyholder passes away during the policy tenure. The insurance company will decide the sum assured amount based on the paid premiums. At the same time, the sum insured provides coverage only upto the defined sum insured in case of loss suffered due to health conditions, injuries, and accidents. It doesn’t provide any monetary benefit, and policy buyers should decide what type of coverage they want for their family.
Moreover, they should evaluate the difference between term insurance and life insurance before buying a plan from an insurer. Term life insurance covers death benefits, an accidental insurance benefit, and critical illnesses benefits.
Therefore, customers should determine the right type of coverage while buying a term life policy. They should also keep certain things in mind when purchasing a policy. Some of them include age, current liabilities, number of dependents in a family, income, current lifestyle, and major life goals.
Policy buyers should calculate both sum insured and the sum assured amount with an online calculator that will help meet the essential requirements. Also, they should keep inflation in mind while buying a policy. The best way to buy an insurance policy is choosing coverage 10-15% times of annual salary. This, in turn, gives methods to get better coverage for family members. In simple words, the term sum assured is used for term insurance and life insurance plans while the term sum insured is used for health insurance plans.
2. Choosing the policy period carefully
A term insurance policy should provide coverage for a family depending on the income that provides ways to accomplish goals during the claim process. In addition, it should cover benefits for policyholders till their retirement age. Therefore, it is wise for a young person to choose an extended plan, and an older person should select a plan with a limited duration.
Policy buyers should evaluate their needs and other things before buying an insurance plan from the markets. They can even choose a lifelong policy when the family members need financial support even after retirement. Anyone who wants to purchase a plan should decide the tenure to pay the premium amounts on time. Also, they should calculate the premiums after choosing tenure correctly. Buying a plan at a young age gives ways to lower the prices. Elderly persons have to pay more premium rates after selecting a plan.
3. Selecting the right insurer
Policy buyers should select the right insurer when buying a plan from the markets. Not all insurers are the same because the features, coverage, premium prices, and other things may vary. An insurance company should satisfy the requirements of customers when they want to buy a policy. Therefore, it is essential to read the review of insurers online before purchasing a plan. Customers should also consider some other things when choosing an insurer.
The first thing is the reputation, and they should check the same from various sources, including referrals. Claim settlement ratio (CSR) is another essential factor to consider when choosing the best term insurance plan in India because it allows policyholders to claim amounts as soon as possible. Insurers with high claim settlement ratios will make the claim process a simple one to overcome unwanted problems.
An insurance company should provide good digital options for policy buyers so that it can handle the queries quickly. It should cover customer care teams online to guide customers to purchase a policy that exactly fits their budget and needs. Trustworthiness is another essential thing to consider when working with an insurer. An insurer should offer the right coverage for policy buyers that will help a lot to lower the financial risks when they are not around.
Those who buy a term policy for the first time should know whether an insurer offers rider options or not. Furthermore, they should evaluate the additional costs of rider benefits with more attention. Top-up facility and renewal are other factors to keep in mind when buying a policy. This is because they show ways to save more money on buying a new policy. In addition, when choosing coverage for critical illnesses, customers should check the waiting period properly, which will help to proceed further. Finally, a policy buyer should understand the claim process of insurance companies while buying a plan that will help minimize complications.
How to buy the best insurance policies?
Online is the best platform to buy the best term insurance policies in India because it gives ways to explore a wide range of plans in one place. Moreover, it provides ways to save both time and money by addressing the essential needs of customers.
