Term life insurances are pure protection plans that come
with no maturity benefit. We all know the importance of a term life insurance and
how it helps us to secure the lives of our dependents. It is the simplest and
the most effective tool to secure your family at affordable premium rates.
Even if you have accumulated a large sum of money, a
critical illness or an accident is enough to destabilize your finances. Buying
a term life insurance not only shields your dependents in case of your death
but also provides coverage during a critical illness or an accident and covers
the loss of income.
Want to know more on Term Insurance We at IndianMoney.com Review will make it easy
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4 Factors to Consider
While Buying Term Insurance
Factors to Consider
While Purchasing a Term Plan
As you are spoilt for choices, you must consider certain
important factors while selecting a suitable term
plan. Here are a few important factors you must keep in mind while
purchasing a term insurance plan
Sum Assured
According to Indian money Review
Bangalore while purchasing the term plan the most critical step is to
calculate the coverage amount. The coverage amount is the sum that your
dependents will receive in the event of your death. As per the experts, the sum
assured of your term insurance policy should be at least 8 to 10 times your
annual income.
To calculate the amount of coverage you require, you must
access factors like your age, liabilities, monthly expenses, lifestyle expense,
and financial requirements of the family in future, your debts and inflation.
If you have any loans, then the payout should be such that it will help your
family meet their financial requirements as well as repay the debt. You can
take the help of the human life calculator to understand the required coverage
amount.
Policy Tenure
The main objective of purchasing a term plan is to leave
your dependents a considerable sum of money. The money paid to the beneficiary
is meant to replace the income of the life assured in case of his or her
unfortunate demise.
It is important to buy
term insurance early to gain maximum coverage. As such the age of entry is
an important factor for deciding the coverage period. If you buy term insurance
at 25 years then you can avail a maximum coverage of up to 65 years. But if you
purchase a term plans at 45 or 55 years then the coverage period becomes
comparatively lesser.
Therefore, life insurance must be availed for your entire
service period. You can even opt for a longer coverage period if you intend to
work beyond your retirement years. Buying term insurance at a young age is
beneficial as you can enjoy longer coverage tenure at lower insurance premium.
If you purchase a plan in your 50s then you will have to spend a good amount on
the premiums.
Claim Settlement
Ratio of the Insurance Company
The claim settlement ratio is one of the key factors buyers
must consider while purchasing a term insurance plan.
The claim settlement ratio refers to the percentage of claims approved by the
insurer divided by the total number of claims it has received. This ratio
indicates the number of claims the company has settled. It becomes an important
point while deciding which insurance company should be considered while
purchasing the policy.
Insurance Riders
Riders are a provision that adds benefits to the basic insurance
policy. You can choose riders to modify your base insurance policy to
enhance protection. There are several riders offered by the insurers that allow
policyholders to make the necessary changes.
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