Term Insurance 1266 views July 11, 2019

Top Most Common Term Insurance Plan Buying Mistakes You Should Avoid

Are you looking to buy a term insurance plan in the near future? Well, term insurance is tremendously important so if you do not have one with you, this is the perfect time to go shopping. However, you have to be cautious and get the correct cover for yourself. Sadly, people make some very common and unnecessary errors while purchasing term insurance. These errors prove to be costly and even hamper the term insurance coverage in the long term. Take a look at this article to know more about these common mistakes and how you can avoid them for your own betterment.

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Major Mistakes to Avoid While Buying Term Insurance Plan in India

1. Buying a short-term plan

Term insurance is not a short term investment. It is an investment for your future, for the good of your loved ones. So you need a plan that is long enough to cover the majority of your living and earning years. You should ideally look to get term insurance till you are 60 years old. If anything happens to you in that period of time, the sum assured from the plan can financially secure your loved ones in your absence. So don’t make the mistake of buying a term plan for a short period of time, as that is seldom useful.

2. Buying it later in life

Term plan gets expensive as you age. So if it is highly advisable for you to get the coverage early on in life. Many people make the mistake of leaving the purchase for a later time in life. This leads to unnecessary expenses and you end up buying the same plan at a much higher price.

3. Not exploring your options

The next mistake you should stay away from is buying the first term life insurance policy that you come across. There are many options available to you. This is because the life insurance sector in India is thriving today and we have some excellent life insurance companies offering some very good plans. However, every plan is not suited to everyone. This is why you need to explore your options and see which plan suits you. it is very easy to compare – all you have to do is go online, run a comparison and get the results in just a few seconds.

4. Looking at the price tag

Term life insurance is a very affordable form of life insurance. However, different insurance providers offer different term life insurance quotes. You should not only look at the price tag of each plan and choose the cheapest option. This is a big mistake that you must avoid making. Look for a plan that is affordable, yet suited for you. the cheapest option may not serve you well at all, and all the money you pay for it will go to waste.

5. Not getting the correct riders

Riders are add on covers that you can purchase along with your base term plan. There are a number of riders available, so choose wisely. A common error is to pick up riders randomly, without understanding the scope of cover. Study the riders and see if they suit your requirements and then buy the ones you need.

6. Being dishonest in your application

Some people think lying about their age or physical health or other such factors can make their term plan more economical. While this can happen, being dishonest when buying term insurance can lead to disastrous results later on. Never, ever even think of making this mistake as your family may end up without a claim if your insurer finds out. You may have to pay a slightly higher premium, but being truthful is essential as it ensures a smooth claim process later.

7. Not looking online

The online term insurance plans are available at a lower price as compared to the offline plans. You should therefore not buy term insurance before checking the online options. Buying insurance over the internet is a safe and convenient thing to do, so make sure you look online before you buy.

8. Not informing nominees about coverage

And finally, you should not forget to inform your family members about the term plan that you buy. This is another common mistake many term insurance policyholders make. Explain the cover to them, show them where you keep your policy documents and also inform them about the claim process. Remember, the policy has been bought for their benefit and if a claim is ever made, you won’t be around to help them. Keeping your nominees in the know is a vital thing to do.

Avoid making these common term insurance mistakes and you will not face too many problems. as you may have guessed, there are some of the most avoidable mistakes. So stay alert and get the right plan at all times.

The Final Word About Term Insurance Plan Buying Mistakes

Keep the points mentioned above in mind and choose your term insurance coverage very carefully. Getting term insurance is not enough – you need to get the correct coverage and buy it in a legitimate manner. This will ensure you get the maximum benefit out of the insurance policy.

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