Buyer’s Guide: 5 Things to Look for in Term Insurance
A term insurance plan is made to cover the needs of the insured and their dependents through an assured benefit sum in the event of the policyholder’s demise. The best term insurance plan in India is one that successfully combines an affordable means of securing one’s future where premiums are low and where one can customise their coverage and payout methods as per their convenience.
A term insurance plan is an asset as well, which can help one to secure or pay off loans in the long run, even in the absence of the primary income earner. It is a resource to be used at times when unavoidable financial expenses have to be met by the surviving beneficiaries in the absence of the policyholder.
Purchasing the best term insurance plan in India best suited to a person’s insurance needs can be a daunting process for those new to insurance instruments. Hence in order to ease the hindrances in understanding the differences between the abundance of term insurance plans available in India, one must pay close attention to the features and benefits of each, and duly compare term insurance plans so as to identify the best term insurance plan in India which also serves their investment and insurance requirements.
1. Adequate Cover: The foremost thing to know before buying a term insurance plan is the amount of coverage a person may require. Since the coverage amount can be chosen by the buyer of the policy it has to be according to the long-term financial requirements of the policyholder since the tenure of the best term insurance in India is usually somewhere between 25 to 30 years.
One can determine their coverage amount by calculating their Human Life Value and choosing a coverage amount that is at least 6 to 7 times their total value while considering the financial obligations of their dependents. The cumulative figure that one gets when they calculate their net salary and their debt liabilities as a total is called the human life value of a policyholder. It is an essential figure to calculate, as it helps navigate a policyholder through their assets and loans and gives them better visibility in regards to their financial choices.
2. Suitable Premium Rates: The premiums paid towards the best term insurance plan in India will still be significantly lesser than other insurance plans in the market. Term insurance plans are considered essential assets, hence they are kept as affordable and accessible as possible. It is a simple insurance instrument that has premiums that can go as low as Rs 600 a month, and are accessible to people from all income brackets.
However, one can supplement the benefits of these plans by availing of a plan that has a combined premium and tenure benefit which often comes with an added reduction on premium costs. Often, combinations of an annual premium over an extended policy tenure may reduce the cumulative premium costs incurred in the course of the insurance.
3. Policy Tenure: The choice of tenure that one can expect in the best term insurance in India will always lean towards the longer side such as 25 to 30 years. It may be cost-effective to buy a shorter-term plan with premiums, but once they complete their tenure, the age of the insured person increases which will increase the cost of premiums at the time of the renewal of the policy. Hence one should get insured at a time where the tenure carries them through and post financially vulnerable times such as retirement.
4. Relevant Add-ons Offered: One of the more interesting features that a term insurance plan has apart from its affordability is its flexibility. Many insurance providers keep the plans as basic as possible, with the customisations for the client to add as per their discretion.
These customisations can range from the choice of payout method; which can be a lump sum or as a staggering income. One can also choose a premium payment frequency as per their comfort. These are customizations one can avail of within the existing structures of the plan, on can select paid riders to their plan.
5. Reputed Insurance Providers: Insurance providers across the insurance market have various rates and term insurance plan customizations for prospective policyholders to choose from. Before buying, one should duly compare all plan benefits and features across different insurance plans and also do market research regarding the reputation and performance of various existing plans and the reviews they have. It is an important step as investing in the best term insurance plan in India cannot be possible without it being backed by a reputed insurance provider with a robust market presence and strong client base.
One can also choose to directly compare and purchase plans on an insurance provider’s website as they often have incentives and offers for direct website purchases and consultations.
The purchase of a term plan is more or less a simple and intuitive process today with the benefits of online resources as well. If one is well-equipped with their finances and visibility before purchasing, they can find the best term insurance in India with little effort. To explore further, you can reach out to financial advisors who will provide assistance through every decision and feature before you commit towards safeguarding your future.