Tips and Tricks to Choose the Best Term Insurance Plan in India

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Tips and Tricks to Choose the Best Term Insurance Plan in India

Natural calamities, viral outbreaks, an unexpected diagnosis of a critical illness, untimely demise, and so many other forms of emergencies point toward the fragility of human lives. And while we hardly worry about what happens to us, concern for our loved ones never leaves us.

Want to know what you can do for your family members to secure their future? Purchase the best term insurance plan in India to give them financial security and a good life in your absence.

What is Term Insurance? 

A term insurance plan is an agreement signed between the insurance provider and the person insured lasting for a specific term. The policy purchased by the policyholder makes the insurer legally bound to disburse an agreed payout in case of an eventuality. The policyholder assigns the beneficiary who is liable to receive the life cover.

You may wonder if the payout initiated in the situation of the insured person’s demise makes a term policy as effective as an accident insurance policy. Well, that’s not the case.

It’s because of the following reasons:

  1. An accident insurance policy only offers cover in case of the policyholder’s death due to an accident. However, a term policy provides cover irrespective of the cause of death, except for in the case of suicide.
  2. The accidental policy only covers loss or damage due to the accident. But the best term insurance plan in India may cover accidental death, critical illness, and disability. You need to pay an additional premium for these add-ons.
  1. While partial disabilities are not covered under term life policies, the accidental cover will also offer protection under partial disabilities.

Types of Term Life Insurance

While there are several types to choose from, the best term insurance plan in India for you will depend on your requirements. Here are the options you can choose from:

Level Term Insurance:

 It is one of the most popular forms of term policies. It is mainly opted by young families who must protect themselves against debt if the primary breadwinner dies. One of the significant distinctions of level term insurance is that it is sold in terms/duration that usually range between 5 to 30 years. Neither the premium nor life cover can change once the policy has been issued. Because the policy offers cover for a limited time, its premium rates are slightly more affordable.

Decreasing Term Insurance:

 It is the best term insurance plan in India for those who wish to cover their active loans and other financial obligations. Also called DTA insurance, it allows the decrease of the benefit monthly or yearly. It is because of this feature it’s slightly cheaper than level term insurance. It is also opted for by small business owners who need debt financing.

Yearly Renewable Term (YRT) Insurance: 

This type is ideal for short-term life insurance. The policy offers similar coverage as other term plans but needs to be activated yearly with a slightly higher premium rate.

Now that you reasonably understand term policy types, pick the best term insurance plan for yourself in India and go ahead with the purchase. Here are some tips that can help you. 

Tips to Choose Term Insurance Plan

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1. Buy From a Reputed Insurance Provider:

Several insurers provide accident insurance policies, critical illness cover, or a term insurance plan at a cheaper rate. But it’s wise not to get tempted by the affordability and buy the policy from an organization with a reputation for fairly clearing claims.

2. Choose Adequate Duration & Cover: 

This needs to be sorted out before you go ahead with the policy. Ideally, you should take the cover for 65 to 70 years, and the cover amount should necessarily factor in inflation. A cover amount that can help your family sustain a good lifestyle will be the best choice.

3. Select Add-Ons to Maximize Benefits: 

The best term insurance plan in India should give you options to add riders/add-ons like accidental death cover, disability cover, critical illness cover, and others. You must know that these add-ons come in handy and extend your range of benefits.

4. Cover Should Account for Financial Liabilities:

If you have liabilities like home loans, car loans, and others, you must consider term policies that will cover active debts in your absence.  

Final Words

Term insurance, the need of the hour, is especially important for the family’s primary earner. While most insurers claim to be the best in the market, the Insurance Regulatory and Development Authority of India (IRDAI) has laid down some regulations (Regulation (irdai.gov.in) for the insurance providers to abide by for the interest of the policyholders.

So, make sure you opt for the one that follows the policies designed by the government authority.


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