Life is very irregular and you never know what is going to happen in few hours and if you have dependents you need insurance which will give you confidence. Life insurance is good way to protect your dependents and term insurance is best option in it. Term Insurance is life insurance policy that provides high coverage at low cost.
Before buying any term policy, here are some keys points you must check below.
This term plan provides financial support to family if something happens to you. You must have term insurance in your financial portfolio. These plans are not restricted to people who are in 20s or 30s. This means that these plans are pure insurance product. Thus you need to choose best plan for family protection as per your need. Here are some key points before you buy term plan.
Assess your need
Secure your family life forever and especially when you are not around. Always keep in your mind before buying term plan that you must cover basic expenses like children marriage, education, and other liabilities like loans. You can also use Term Insurance Calculator to calculate premium you have to pay and also calculate at your own convenience.
As per your need you can calculate your insurance by looking liabilities for long term. It will help you to do comparison and figure out best term insurance plan that can match your needs. So, always take insurance with enough cover or else it will create lot of problem to your dependents. Also see What you can do to pay low premium?
What is your coverage?
It is important you to choose an adequate cover amount. This term plan must cover till you intend to work. You will get life cover around 10 to 20 times your annual income so you must buy cover according to your needs and not to go for high cover as it will add to your premium only. You must focus more on cover and less on investment part of it.
Premiums must be equal with sum assured you selected. Thus, it may not be suitable to go with lowest premium option. You must go according to your needs and wants. While plan Coverage depends on various factors such as your lifestyle, responsibility and liabilities.
In term insurance plan, sum assured is high and premium amount is low. Also, premium amount does not change under any circumstances. So if you want to get benefits of term plan at low premium, you need to buy term insurance plan as soon as you start earning. View New pension scheme launch for senior citizen
Tenure of Policy
You have to decide on period or term of cover you want to be protected. It is advisable to have life cover till you’re earning or till your life goals are fulfilled. Beside you need life cover if you have dependents. This term plan can buy till your retirement or when your financial liabilities end. Term plan premium varies from one insurer to another so when tenure of your term insurance increases then premium will also go up.
You don’t get any maturity benefit and this case you select other plans. So, there are plans which can give you premium return option once your policy term gets over. When you opt for such plans you make sure to know that your premium price may rise up to double.
So that you can pay without availing return option for same sum assured. You can calculate premium of term Insurance policy till retirement age taken as 60 years. It is good idea to get policy till you reach age of retirement. To know more about how these variants can differ from each other, check out our online term plan.
You must look at policy term, premium payment term and sum assured. And before you opt for any term plan it is important to compare term insurance plans online. It is a very basic step in your journey of financial planning.