Banking, Insurance

Read this before buying a term insurance

Posted By: Admin
September 25, 2022 |

Important Things to know Before purchasing Life Insurance

Term Insurance: Before thinking about investing your money, you should think of buying a term insurance. Term insurance is the best way to secure your family financially and maintain your financial wellbeing. The term insurance is a cost-effective way to insure unexpected conditions and it is also easy to buy. There are many companies in India which are offering term insurances. However, you must know some key points before buying a term insurance. If you have dependents in your family like spouse, children, parents you must buy term insurance before investing money in other instruments. Having a life insurance policy not only keeps your worries away, also it may fetch you good returns and save your income tax. The financial protection you create for your family always acts like a friend in need.

A life insurance policy protects family finances in case of the sudden death of a person who is an earning member. There are many benefits of an insurance policy which can be seen below –

Life insurance policy protects the finances of your family after you.
Money back insurance policy can help you in meeting long term financial goals.
Term insurance can help you in achieving short term goals like a child’s education and buying a luxury.
You can plan your retirement with term insurance.
Safeguard your precious items or anything which is costly like Fridge, Washing machines, Cars, Bikes, Buildings, goods, etc.

However, there are certain things which you should always keep in mind before buying a term insurance policy. We will see these points below –

1. Buy a term insurance which is sufficient according to your financial need. Don’t choose lower financial cover.

People generally don’t think about this. They don’t calculate the actual coverage. While choosing a term insurance plan, must consider a cover that is at least 8 to 10 times your annual income. Also, keep in mind that your family may require more funds hence consider the amount before buying a term insurance.

2. Policy should not be for a shorter period.

The purpose of buying an insurance policy is to tackle unexpected losses. While choosing a term plan, consider the time frame. Shorter policy terms may let you make a wrong decision.

Also read Types of Insurance, Why to choose banks for insurance

3. Disclose critical information about you

A person who is buying a term insurance should always disclose all the crucial information for the smooth processing of claims. It may be a pre-existing medical condition, family medical history, risky lifestyle choices like smoking and engaging in hazardous occupations or any other which you think can be a hurdle in claiming insurance amount. However, most of the insurance companies are taking precautions and asking for medical check-ups before issuing a policy.

4. Always check claim settlement ratio of the company

This is the very important point, which you keep in mind while buying insurance. While choosing the insurer, Check the company’s claim settlement ratio. The claim settlement ratio reflects the reliability of the insurance company in terms of paying the claims and also helps in understanding the overall performance of the company. The process of the claim settlement should be easy, and the customer should have a hassle-free experience. The claim settlement ratio can be seen on the official website of the company or IRDA.

5. Don’t just buy term insurance because someone referred you to a company. Search for the company and plan offered before buying an insurance.

There are many options available on the internet which can help you find information about plans being offered by the insurer company. Don’t just trust a company because the agent is easy to contact. Read the full plan offered to you, terms and conditions mentioned to claim insurance. Choose the right sum assured and riders if required.

6. Don’t choose too many riders

To keep the premium affordable, you should carefully select policy riders. Insurance policy riders are the facilities offered by the insurer additionally by paying additional amounts based on your policy. You should always opt for riders which suit you. Choosing additional and unwanted riders may make your policy unaffordable.

7. Buy Policy at right time

A person should buy a term insurance on time and should not be delayed due to laziness. Do not wait to avail insurance, remember it is to protect unexpected and sudden losses.

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