Being financially prepared for any situation in life is the best way to reduce financial risks and provide financial security to your family. But in today’s time, life has no faith. No one can say what happens to anyone. In such a situation, if you do not have some special property or some regular income other than the income from your job, then what will happen to your family? Have you ever thought about it? If any untoward happens to you in the future, a term insurance plan can help your family in this situation.
If you want your family to live with the same lifestyle even if you do not live, and do not have to take help from anyone to meet your needs, then you must buy a term insurance plan. If you buy this plan and you die during the policy period, then the nominee is given a lump sum as per the terms of the policy. You can buy a good term plan for yourself by paying a premium on an annual and monthly basis. Through this article, we are going to give you information about term insurance plan.
Types of term insurance plans
There are many types of term insurance plans in the market. From there, you can choose a better plan keeping in mind your requirement. Nowadays many insurance companies have launched customized plans of different circumstances, which provide cover in a special situation. Term plans are basically classified into four categories –
- Level term plan
- Increasing and decreasing term plans
- Return of Premium Term Plan
- Monthly income plan
Any scheme related to term insurance in the market will fall under one of these types. When choosing a term insurance plan, it is important to identify your needs and choose a better plan that suits your needs. By doing this you can secure the future of your family.
Things to keep in mind while purchasing a term insurance plan?
Due to the many schemes available in the market, it is a bit difficult to choose the best for you, but you can choose a good plan by comparing these plans online and keeping in mind your needs. When choosing a term plan for yourself, you should keep the following points in mind –
insured amount – This is the amount that is paid to the nominee when the policyholder dies during the policy term. This amount should be fixed keeping in mind your family’s expenses, debts and other liabilities so that if you are not there, your family can fulfill its obligations and lead a good life.
Maturity period – The maturity period is an important factor in a term policy. The premium of the scheme is decided on the basis of this. The maturity period of the policy should be chosen according to its liabilities. If you are the only earning member of your family and you want good coverage for your family, then you can keep the maturity of the policy till your age is 75 years.
Claim Settlement Ratio – If you want your family to take advantage of a term insurance policy in case you are not there, you must look at the claim settlement ratio of the insurance company and select the insurance company accordingly. It is good to choose a company that has a high claim settlement ratio. This gives you a guarantee that your claim will not be rejected without any valid reason.
Riders – There are additional benefits offered in a riders term insurance plan. Riders allow you to increase coverage of your policy and protect your family in a better way. Some riders are helpful in getting an additional amount along with the basic insurance cover amount. So choose a policy that offers more riders.
health check up – Most insurance companies conduct an applicant’s health checkup before offering a term insurance plan. Usually the applicant tries to circumvent this check, but you must have a health check before taking the policy. This gives you information about pre-existing diseases. Although you have to pay a higher premium for these, it makes it easier to settle claims.
Choose the appropriate option for payment of cover amount –
Currently, some insurance companies are offering lump-sum payments as well as an income replacement option. If your family is unable to better manage the lump sum, in this case, you can opt for the replacement payment option. In this option, the nominee gets a fixed lump sum and continues to receive a monthly amount for a fixed period. That is, he gets monthly income.
How to buy a better term insurance plan?
When you are not near your loved ones, then the money from the term plan will help your family financially. So buy a plan from an insurance company that has a good reputation in the market and is known for fulfilling its conditions and promises. Apart from this, keep in mind the points mentioned above before choosing the plan according to your need. Also, choose a better plan by reading all the terms of the policy well and comparing it online.