When you plan to buy term insurance, you get plenty of policies for various insurance providers. As term insurance plans are essential, you must be vigilant while purchasing one and these 5 things to know before buying a term insurance plan. Term insurance plans are not just about paying premiums and getting lump sum amounts, but it’s more about the financial security of your dear ones.
Term insurance plans are pretty simple: you pay premiums for specific tenure, and your family gets the cumulative amount in case you pass away. When it comes to family security, one must maintain quality. The same thing goes with term insurance. Before buying one, you must consider all the essential aspects to provide 100% security to your family.
Before buying a term insurance plan, let’s find out Things to Consider
Important Things to Keep in Mind while Buying a Term Insurance plan
It will help if you look for various aspects of a good term insurance plan. Here, we have listed the most essential 5 Things to know before Buying Term Insurance Plan.
1. Enough Coverage for You and Your Family
The first thing to Keep in Mind while Buying a Term Insurance plan is determining how much coverage is required. Most people make the mistake of choosing inadequate coverage, which they regret later. According to experts, a person should go for term plan coverage 8-10 times his gross income.
Remember to consider your age, annual income, medical history, family members, and monthly expenses when choosing the term insurance plan. Refrain from being lured by the low coverage plans and their lower premium amounts. Be mindful and choose the one which provides adequate coverage.
2. Choose the Term Plan Tenure
Another essential thing to consider before buying a term insurance plan is choosing the policy period. If you wish to get higher coverage at lower premiums, buying a term insurance plan when your age is near 30 is recommended. The policy purchased early offers a more robust financial wall and maximum policy tenure. Long-term investment plans can be beneficial for buying a term insurance plan.
Additionally, Insurance companies offer you a chance to enhance or decrease your coverage in exchange for some higher premium during starting years of the term insurance plan.
3. Disclose all the Information Honestly
Many times people complain about the rejected claims. It’s primarily because of the false information they provided to the insurance company. You must provide all the information honestly to the insurance providers, including all your medical history, existing policies, etc.
If you hide the information from the insurance providers, chances are high that nominee will face issues with claiming a lump sum amount after your death. So, disclosing real information is necessary among the 5 Things to know before Buying Term Insurance Plan.
4. Look for a suitable rider
Consider the available riders in the term insurance plan if you require additional coverage. These riders offer you and your family additional benefits with just a little extra premium. Let’s know about some of the riders
a. Accidental Mortality Rider Benefit
This rider offers an additional amount, and a lump sum to the family if the insured person dies in an accident.
b. Critical Illness Term Plan Rider
In case the policyholder gets infected with a particular critical illness. This rider provides the nominee with the lump sum amount.
c. Income Benefit Term Plan Rider
This rider provides monthly income to the family for 8-10 years after the policyholder’s demise. The payment is in the enhancement of the basic sum assured.
5. Choose the Best Insurance Provider
Now that you have all the essential information about the term insurance plan, it’s time to check the authenticity of the insurance provider. Term insurance plan is crucial for your family after you, so you must hand over your hard-earned money to an excellent reputed insurance company.
You must have their experience, read the customer reviews, and check on the ratio of claim settlement, the company’s establishment, and economic strength. There are various cases where people get trapped in fraud because they don’t investigate appropriately about the term insurance provider. You must be vigilant and look for a trusted and reputed insurance company.
A term insurance policy is a practical investment option that offers financial security to your dears. Hence, choosing the best term insurance plan is essential to eliminate your financial burden. So, the above 5 things to keep in mind while buying a term insurance plan.
5 Things to Know Before Buying Term Insurance Plan – FAQs
What are the death cases that the term insurance plan doesn’t cover?
Ans. The cases like murder, Alcohol-induced death, death due to heavy smoking, suicide, already existing health issues like HIV, AIDS, etc., and Childbirth are not covered under term insurance plans.
What are the necessary tests required for buying term insurance?
Ans. The tests required are BMI, Urine test, Blood test, CBC, Sugar test, Kidney function test, liver function test, Lipid profile, ECG, X-Ray, HIV, Ultrasonography, Trade-mill test, and comprehensive trail-making test.