If you have bought a term insurance plan, that is a good thing. You thought about your family in time and made the right decision keeping in mind their future. Term plan provides cover to your family in your absence so that your family can bear your monthly expenses, liabilities, children’s education expenses etc. without any financial hassle. There will be many of you who are planning to buy a term plan this year. Before buying a term plan, it is very important to know about it. The better we know about the term plan, the better we will be able to take advantage of it. Through this article, we are going to give you very important tips about term insurance, which you will read in 2019.
You will read the following very important tips about term insurance in 2019
Understand how to get the best coverage on the premium paid – Life is full of uncertain events. These incidents happen without warning. The term insurance policy provides financial protection to your family in times of such uncertainties. We are paid the premium by the insurance companies for the policy. But sometimes people are not able to get the best cover even by filling high premium amount. We should fix the amount covered by adding our monthly expenses, liabilities, children’s education and other expenses. This amount should be at least 10 times our annual income.
When determining the amount covered, think about your standard of living and the number of family members – Your family members may have different ages and needs. Responsibilities change over time. So while determining the term policy cover amount, you should think about your family’s standard of living, their number and future requirements.
The company with a high claim settlement ratio – The claim settlement process of a term insurance company should be quick and effective. The claims settlement ratio shows the claims settled by the insurance company in a particular year. The higher the claims settlement ratio of the company, the lower the chances of claims being rejected and the more likely your family to get the cover amount in your absence.
Riders increase coverage – In addition to the death benefit in the term plan, additional cover is provided when riders are taken. Critical illness rider, disability rider, accidental death rider etc. are some of the major riders. These riders can be added by paying some extra premium. Taking these riders increases the cover amount of the original term plan.
Claim Settlement Capacity – The claim settlement capacity of a company can be understood by its solvency. This shows whether your insurance company is financially competent to settle your claim if needed. According to IRDAI the solvency ratio of each life insurance company should be at least 1.5. The company’s claim settlement capability is important because a large number of claims are received by term insurance companies in case of a natural disaster. In this case, more claims have to be settled as soon as possible and in such situations the solvency ratio becomes important. The financial security of your family depends on the financial stability of your life insurance company. Natural disasters may not occur, but this important aspect cannot be ignored.
Take a policy for a longer period at a younger age – Term insurance companies usually offer policies for a term of 40 years and for people between the ages of 70 and 75. But at a young age, it is better to take a longer-term policy. This gives you more cover at a lower premium as the premium amount increases with age.
Give the correct details – The relationship between the insurance company and the customer is based on trust. Giving one of your false information affects the relationship between the company and you and there is a possibility of a doubt. Therefore, fill the form to be filled for the policy with the correct information. Even if filling the correct information increases your premium amount. If you smoke and drink alcohol, do not forget to mention it. If you already have a disease, then also mention it. If you fill in the wrong information in the form and at the time of the claim process, if the company finds that the information you have submitted was incorrect, the company can also reject your claim. Therefore, in your absence, the claim should be dismissed and your family has to face trouble, it is better to pay more information and pay more premium.
Along with the things mentioned above, we should do a comparative study of various schemes and choose the policy.