Our future is never guaranteed. What is guaranteed is our present and the actions taken in order to create a future we want. The death of the bread earner of the family can cause financial turbulence; it is in such cases that term plans act as death benefits. Term Plans are the best way of securing our as well as our family’s future. The basic definition of a term plan is that it’s a type of insurance that provides coverage for a defined period of time. In the case of death of life, the amount insured is payable to the chosen nominee. Term plans are customised plans catering to the security of our family.
POINTS TO KNOW ABOUT A TERM PLAN
Buyers who are new to term plan insurance need to understand the following critical points while buying a policy.
- There is no right age for getting a term insurance. The earlier you buy it, the better. Minimum age to opt for is 18 years; maximum age limit is 65 years.
- Certain plans come with riders which cover aspects such as critical illness, accidental death or disability. These riders are available by paying a small additional premium.
- Opting for premium waiver benefit, while choosing a rider, ensures that you need not pay the future premiums in case of any eventualities.
- Premium to be paid varies depending on the policy holder’s age and the sum insured.
- Premium can be paid either in a single instalment or opting for a regular plan which can be paid either monthly, quarterly or annually.
- Do not hide information related to smoking or consuming alcohol. At present, plans are available for individuals who smoke and drink. Hiding of these facts will result in breaching the contract and result in rejection of the claim.
- Do not hide any critical health information while purchasing the policy. Withholding of your health issues, as well as your family health issues, impacts the premium.
- Paying an annual sum of 2-3% (of the policyholder’s annual income) can provide a cover amount up to 20 times that of the annual income.
- Term plans have their limitations. Suicides are the common exclusions which are not covered.
- Pay outs generated are the sum assured based on the option selected while purchasing. These pay outs can be a lump sum pay out, monthly income pay out, or lump sum and monthly income pay out.
- Term plans are specially crafted for people who are financially independent and sole bread earners of the family; have dependents; for singles wishing to start a family or who have children and wish to secure their future and entrepreneurs.
- Term plans cover the policyholder if he/she travels abroad for either leisure or business. This holds true if the trip is scheduled at the time of purchasing the policy and informing the same to the insurance company.
- Term plan coverage remains active if the policyholder becomes an NRI post the issuance of the policy.
THE PERFECT TERM PLAN FOR YOU
To choose the best plan catering to you and your family’s needs, the following factors must be kept in mind:
- Ratings of the insurance company. The reputation and stability of the company is the first step required for the customers to trust.
- The amount of insurance coverage that you need. Make sure that the need to purchase a term plan is based on an individual’s personal preference.
- Claim settlement ratio: Organisations having a high ratio implies that they have settled majority of claims received by paying back the sum assured in case of death.
- Rising inflation pays a major factor in paying the premiums. Hence one must opt for plans which cover the amount by a hike of 5-10%.
- Various insurance companies have their own terms and conditions thus one should always compare between various plans.
- Opting for two different plans from different companies ensures fewer chances of rejection of claims from either of the two companies.
- Low term insurance plans have their own terms and conditions attached for the time of claim. Opt for other plans offering a high coverage.
- Opt for either an online or offline term plan. Buying term plans online through various comparison portals is advantageous and economical.
- Be specific about the tenure of the term insurance while taking into consideration the age at which you wish to retire.
- Opt for riders that offer additional coverage in addition to the base term life insurance plan.
In securing our future, there must be a backup plan and onlineTerm Plans are the best for doing the job. Widely available everywhere, this simple yet beneficial form of insurance provides benefits in the form of sum assured to our families even after death.
TERM PLANS AND THE WAY IT SHOULD BE LOOKED UPON
Our future is never guaranteed. What is guaranteed is …