When it comes to buying term insurance, customers face various doubts,as they do not have proper knowledge of investing in a term plan. As we know a term insurance policy is a type of life insurance plan that offers financial coverage to your family in case of your death during the term of the policy. A term insurance plan works just like any other life insurance plan that offers high coverage and better protection in comparison to other life insurance policies. If you are on a lookout to buy term insurance, then here are a few things you should consider before buying one.
1. Determine the coverage you require: Firstly, calculate the amount of coverage you require. It is always advisable to opt for a sum assured that is 15-20 times higher than your annual salary. When deciding on the sum assured, keep in mind the lifestyle you and your family live. Understand if the sum assured would be sufficient to provide them enough financial coverage in your absence and if they would continue enjoying the same lifestyle that they are living currently. Do not under insure yourself in order to pay less premium.
2. Age: Your current age is an important factor that decides on the premium you would have to pay and the coverage you would require. Buying a term insurance plan at a young age will cost you less premium in comparison to buying one at an older age. Your age plays an important role as lower the age, lesser the premium and higher the age, higher the cost of the coverage.
3. Loans and liabilities: Take into consider all your loans and liabilities and see if the sum assured would be enough for the family to pay off the debts and continue living a good lifestyle.
4. Duration: Since a term plan only provides death benefit, it is advisable you opt for a plan that covers you for a longer duration. This keeps your family protected and also ensures peace of mind. Remember, if you survive the term you are not eligible to receive any survival benefit and if you buy a term insurance at an old age, then the premiums too would be high.
5. Premium: There is nothing like buying a term insurance plan that comes at an affordable premium rate. But you should not opt for a coverage that would keep your family’s financial future at stake. Never do the mistake of opting for low coverage thinking you will have to pay less premiums. Always opt for a coverage amount that provides you enough sum assured to secure your family’s financial future.
6. Riders: You an always enhance the coverage of your base term insurance plan with the below riders.
7. Accidental death benefit: This cover provides you additional coverage to your family in case you die due to an accident.
8. Waiver of premium: If you become permanently or partially disabled, then this type of cover waives off all the future premiums.
9. Critical illness: This cover provides you coverage in case you are diagnosed with critical illnesses such as kidney failure, cancer, stroke, etc.
10. Income benefit rider: This rider allows your family to enjoy a steady flow of cash along with the basic term coverage you have opted for.
Consider the above things when buying a term plan to ensure your family stays financially protected at all times.
Health Insurance for Smokers - The fact of being a smoker amplifies the health insurance premium for smokers as compared to non - smokers.
Critical Illness Cover - Understand some of the important reasons why you definitely need to include a critical illness rider along with your term insurance plans
Life insurance can be combined with investments and many life plans allow you to do that. Check 4 Types of Life Insurance Investment Plan You Can’t Miss.
Term Insurance - Are you planning to buy Term Insurance? Check 5 Common Mistakes to Avoid While Purchasing Term Insurance Plan
We usually hesitate while buying a term insurance plan. Read 5 Myths about term insurance plans that you should not believe.
Life Insurance is important to be considered by every individual. Here are the 5 Things you Can’t Miss to Know about Life Insurance Policy.