Life is the name of uncertainties, anything unexpected could happen anytime. It's better to secure your life to some extent. A life insurance policy might function as a buffer for your family's financial stability in the case of any unfortunate incident. Life term insurance could save you from uncertain incidents in future.
When it comes to the final step of acquiring a term plan, most of us are often perplexed about the amount of life cover to choose, the policy length, which insurer to choose, and what plan to choose. Here are some pointers to help you make an educated selection.
1. Do you even need life insurance?
Do you even need life insurance? Ask yourself. It's the answer that will tell you whether you need term insurance or not. While making the decision you need to take care of various other things such as family, earnings, health. Also, your dependant family members may change as you progress through life. A single individual's financial duties are not the same as those of a married or childless person. The level of coverage should be determined accordingly. Remember to keep an eye on the future and plan for increased financial obligations.
2. Identify your need, Premium, and Tenure
Your term life insurance policy should roughly determine how much money your family would require if you died unexpectedly. Once you've determined how much coverage you require, you'll need to determine how long you'll require it. The duration should not be too short, as the insurance may lapse before your financial responsibilities are met. At the same time, the term should not be too lengthy, as the premium paid would be excessive due to the longer tenure.
3. Key factors to consider before buying any life insurance policy?
Claim Settlement Ratio
It is one of the important factors one should consider before moving forward with the insurance. The Claim Settlement Ration of a corporation indicates the number of policies that are resolved by paying back the claim in the case of death. Every year, the ideal business settles 98-99 claims out of every 100 claims. This is due to the fact that a denied claim defeats the entire purpose of acquiring the term plan in the first place. It is thus prudent to investigate an insurer's claim ratio before acquiring its product.
Some other ratios that also need to consider before buying term insurance:
1. Amount Settlement Ration
2. Claim Rejection Ration
3. Amount Rejection Ration
The policyholder may become handicapped as a result of an accident or the diagnosis of a catastrophic disease. This would have an effect on the policyholder's capacity to make an income. In such instances, the policyholder's family may struggle to meet expenditures. To defend against such eventualities, consider supplementing the term insurance policy with a number of add-ons or riders.
Some of these add-ons include critical sickness coverage, an accidental disability rider, and so on.
Disability Rider - The accidental disability rider ensures that the policyholder receives a regular monthly income equal to a particular proportion of the sum covered for a certain length of time.
Critical Illness Rider - If the policyholder is diagnosed with any of the specified critical diseases, a critical illness plan will pay out a lump payment similar to the death benefit.
5. How to buy term life insurance?
There are two way you can buy term insurance, online or offline. What is online insurance? Online term insurance does not require the involvement of a human (agents) during the insurance purchasing procedure. However, there are many distinctions between getting term insurance online and offline. By weighing the advantages of online vs offline insurance, you'll be one step closer to deciding on the best plan for you.
On the other hand, offline term insurance plan purchase refers to purchasing the plans through local agents or by visiting the nearest branch offices of insurance firms. By selecting this method, you agree to work with brokers who can assist you in picking the best plans for your circumstances.
Offline insurance allows you to engage with agents who can assist you in making an informed selection. This is especially useful when the policy buyer is unfamiliar with the different terminology and advantages of insurance coverage.
When the internet method was unavailable, the only alternative was to purchase term insurance plans offline. This is one of the reasons why some individuals choose to work with an agent for their life insurance requirements, whether they are purchasing, renewing, or filing a claim.