Term Insurance 2703 views September 10, 2019

How to Choose Best Term Insurance Plan in India

How to Choose Best Term Insurance Plan in India

Mangal was a healthy 25-year-old single banker. He was talking to his friend who recently bought a term insurance cover. After listening to his friend’s point of view as to why he bought the term insurance cover, Mangal was very impressed. He promptly went online and bought the exact same life cover for himself too. He, however, ended up making a massive mistake. Mangal’s friend was a 40-year-old father of two. He was a diabetes patient and his cover was only for 20 years. The identical cover, therefore, proved to be of no use to Mangal. Thankfully, he realized his mistake in time and cancelled the term life insurance policy within the free look period and got a more suitable term insurance coverage for himself.

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When you look to buy a Best Term Insurance Plans in India, you should never make the mistake of buying the very first policy that you come across. You need to pick and choose, compare and then find the cover that is best suited for your own requirements. If you blindly buy the plan your friend did, you will end up having a redundant cover, much like Mangal did! So be cautious and choose your term life insurance cover with care. Take a look at this article to know how you can choose your ideal term insurance cover and where you can get the best possible deals.

Free Steps (Tips and Tricks) on How to Choose Best Term Insurance Plans in India for Your Family Financially Security

Here are a few guidelines for you to find and purchase your ideal and best term insurance plan in India:-

1. Assess your needs

Like for any other type of insurance, for term insurance too, you need to assess your own requirements before you proceed to buy a life cover. As we saw in Mangal’s case, his life situation and requirements were completely different from that of his friend. So sit down and make a plan. See what your sum assured should be. How many dependent family members do you have?  What are the other sources of income for the family or are you the sole breadwinner? What are the financial liabilities and unpaid loans that you have? All these factors will determine your life insurance requirements, so a close assessment is of utmost importance. 

2. Make a budget

Next, you need to make a budget. Term insurance plans are available in a variety of prices. The term insurance premium you pay is dependent on the volume of the life cover, the term of the policy, the riders added, etc. You, therefore, need to make a budget before you buy. See how much you can spare towards your term insurance expenses. You may surely want to have the highest possible cover, but you need to be realistic and stay within your budget. Thankfully, the term insurance policies are available in a wide range of prices and no matter what your budget is, you are assured of finding a good term life insurance plan.

3. Take stock of your health and lifestyle

The term insurance premium you pay will depend on your health and lifestyle. If you are healthy and maintain a good lifestyle, your term insurance premium will be lower. If you have a few ailments, you smoke and drink or you are overweight, your term insurance premium will be much higher. This is why you need to take stock of your conditions before you apply for a plan. If possible, change a few habits and look to lead a healthier life to get your term insurance plan at a better rate.

4. Choose the right duration

A term life insurance plan should ideally cover your earning years. If you die while you are employed and earning a salary for your family, the term insurance cover can take care of their financial challenges after you are gone. To calculate how many years of employment you have left. In India, retirement usually happens at the age of 60. So if you are 30 years old now, get a term insurance plan for 30 years. If however, you have very young kids or aged parents who would need your financial support even after you retire, make provisions for that. If you have children who will become financially independent after another 20 years, take a term insurance cover till that period of time.

5. Make provision for inflation

When buying term insurance, you have to make provisions for inflation. Remember, college admission fees that cost Rs 50,000 today will cost a lot more in 20 years’ time. Keep all such factors in mind when looking to cover your family financially. Apart from the education sector, inflation will also happen in the medical field, in real estate, and in our daily lives. A packet of bread that costs Rs 35 today may well cost Rs 350 in a few years!

6. Compare Term Insurance Plans

Never forget to compare insurance quotes. Unless you compare the different term life insurance quotes, you will not know what your best options are. It is very easy to compare the term insurance quotes. All you have to do is visit a reputed insurance aggregator’s website and start comparing. Just enter your details, your insurance requirements and the results will be shown to in instantaneously. The process is free and easy to complete. It hardly takes a few seconds but proves to be of immense help to you for sure. You should thus never buy a term insurance policy before you run an online comparison first.

7. Shop online Term Plans

You will always find a better deal on the term insurance plans when you buy your cover online. Term insurance online is much cheaper than term insurance offline. This is mainly because you get to save a large chunk of money on the brokerage fees. Then, the Life Insurance Companies in India selling term insurance online save money on the processing and administrative charges. You are therefore offered a further discount on the processing and administrative fees. And last but not the least, to encourage more and more people to shift to online insurance, the insurance companies offer the online plans at a comparatively lower cost.

8. Add Insurance riders

Riders are very handy term insurance components. They are add-on covers that you get after paying an extra term insurance premium. You can add various orders to your base term insurance plan. Riders allow you to make your plan more flexible and tailor-made for your requirements. You can buy any rider from the available options. The common term insurance riders include the critical illness rider, the waiver of premium rider, the accidental death benefit rider, the personal accident rider, etc. A word of caution here would be to choose your riders carefully. Every rider comes at an added cost and the higher the number of riders you add to the plan, the higher the cost of the term insurance plan gets. Go over the available riders, weigh them against your needs and then pick up the ones that are of greatest use to you. You can add or remove riders at the time of a term insurance renewal as well.

9. Choose the correct payout

You can choose from multiple payout options in term insurance. When you buy term insurance, you will be asked about the way in which the death benefit will be paid if, if you happen to die within the policy period. You can opt for a staggering payout, a lump sum payout, or a combination of the two. In a staging payout, the total death benefit is broken up in small installments and paid for a fixed period of time. In the lump sum option, the entire amount is paid in one go and the insurance policy terminates. Choose the payout option that will benefit your family the most after your demise. Choose very wisely as the entire success of the term insurance policy will depend on this.

10. Select a good insurer for Buying Term Insurance Plans

And finally, you need to select a very good term life insurance provider. You need to get a good plan for an excellent life insurance company. You need to look at ratings and reviews and also consider the claim settlement record of the insurer you choose. The insurance provider should be positive and helpful. Once you find a good insurer, you will not face any problems in the term insurance cover.

Keep these checkpoints in mind when you start your best term insurance plan shopping. You can then easily and quickly find your ideal term life cover.

Final Conclusion About How to Choose Best Term Insurance Plans in India

As you can clearly see from the points mentioned above, a term insurance policy is of immense help. However, the plan can only deliver fully if you buy an ideal coverage at the ideal cost. Keep all the important points factors above in mind and you will not face any challenges when you look to buy your term life insurance policy. From choosing the right plan to the best life insurance company, you should not make any compromises along the way. A term insurance plan is highly beneficial and you should take full advantage of it at all times. In case, you find this article about How to Choose Best Term Insurance Plans in India useful and trustworthy, then please share it on social media platforms, i.e. Facebook, Twitter, Reddit.

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