Life insurance exists to cover for you in your absence, in monetary terms. It provides for your family in times of need and allows them to remain financially stable even after your unfortunate demise. One of the most popular life insurance plans is the term insurance policy. It is said to be one of the simplest types of insurance plans available at affordable rates.
How to choose the Best Life Insurance Plan
Here are a few tips on choosing the best term life insurance plan.
1. Examine the Claim Settlement ratio
What happens if your insurance claim does not get settled and your family is not paid the sum assured after your sudden demise? The whole point of buying the term life insurance is gone down the drain. Thus, it is important to understand the claim settlement ratio before plunging into the world of insurance to know how efficient the whole process is. The higher the claim settlement ratio, the better it is.
2. Evaluate your Family’s needs
Are you the sole breadwinner? How many members in the family depend on you and what are their ages? What are their lifestyle requirements? These are some questions you need to ask yourself to help you decide what kind of term insurance you must opt for. Further, do not forget to take annual inflation into account! So, the amount of cover you must choose should depend on the type of expenses your family needs to continue living the same way.
3. Analyse Riders
By riders, we mean all other benefits that the term insurance companies offer apart from the death benefit. Many of the best life insurance providers offer loss of employment cover, disability cover, critical illness cover, etc. You have the opportunity to use such riders as an add-on to your existing life insurance policy and cash in on more benefits according to your preference.
4. Check if the company offers enhanced Cover for life stage requirements
If you opt for an insurance at a young age, you probably do not need a large cover. But as you move ahead in life, your responsibilities increase and so do your needs. Thus, you should check whether your insurance company allows for enhanced covers. You can then choose to enhance your cover at important stages of your life, for example, when you have children or become a grandparent.
5. Study the Financial Stability of the Insurance Company
The solvency ratio of your term insurance company would show whether it is capable of settling claims when required or not. Imagine a scenario when a major natural disaster strikes and there is a huge loss of life. Your insurance provider would be needed to settle all the claims that come its way and it should be prepared for it! Therefore, an insurance company is needed to have a solvency ratio of 1.5 at the very least.
6. Figure out the Premium you can pay
It makes no sense to aim for the top without having a path to get there. Similarly, you need to pay a premium to receive the sum assured as the death benefit. Thus, evaluate your financial condition wisely before choosing the premium you would be comfortable with.
Process to Get the best plans
Now let us move on to the step-by-step process of selecting an insurance policy.
1. Know what you want
You first need to know what exactly you are looking for. Without that, you cannot plan the next steps to your ultimate destination – getting insured. Make sure that you are buying your term insurance as per your needs and not just because the world is doing it. Understand what a term insurance is, do your research, and then make the leap.
2. Work out the value of required cover
This is one of the trickiest things you need to know when choosing your term insurance company because well, you are opting for the term insurance to get a cover in the first place. So, as stated before, you need to examine what kind of sum would be ideal for your family after your unfortunate demise. A lot of factors need to be taken into consideration including general price level in the city you live in, the inflation in the country, and of course, the premium you can afford to pay right now.
3. Compare the options in the Market
The Indian insurance market has several different options for you to choose from. But you need to make an educated decision after checking details such as the claim settlement ratio, the solvency ratio, and what kind of additional benefits are available. Further, one of the most crucial aspects you should focus on is the reputation of the company in the market. Perhaps check some of the most popular term insurance plans for a comparison. What are the reviews of the people who have opted for the term policy or those who have received the claims? Are they customer friendly? Are they efficient in what they do? You can explore coverfox.com to answer a few of such questions
So, what are you waiting for? Start your process of buying a term insurance because the earlier you get covered, the better for you and your family!