Life is full of unpredictability, and hence a life insurance plan
acts as a much-needed cushion against the uncertainties of life. However,
everyone has his or her own needs, and therefore it is important to choose a
term life insurance plan that covers those specific needs. But, before we get
into the nitty-gritty of choosing the right term insurance, let’s first
understand what term life insurance is.
What is Term Life Insurance?
The name term insurance itself suggests that this kind of insurance
is only valid for a specific period. A term insurance offers death benefit to
the nominee of the deceased insurance holder, however, if the insurance holder
survives the insured period then he receives no maturity benefit. Term
insurance also has lower premiums as opposed to its counterpart, however, the
premium amount keeps increasing with time.
Now that we have a better understanding of what term insurance is,
here are 5 tips that will help you chose the right term plan
Don’t Fall For Your Peers Words Alone
While other’s experiences are always something to consider, one
should also keep in mind that your friend or colleague’s requirement from their
term plan can differ from yours. So, before you make your choice it is
advisable to evaluate your future goals, liabilities, assets, etc. and then
weigh them against the sum assured and only then zero in on the most suitable
plan.
Think About Your Present As Well As Your Future
The financial responsibilities a single individual has are different
to those of a married man with a family to care for. Since the number of people
dependent on you may change with time, it is important to factor them while
choosing a suitable term life insurance.
Decide How Long You Want the Cover For
As important as the amount of cover is, equally important is the
duration of the cover. A term insurance policy is meant to cover an individual
till they retire. So, if you are planning to work more than then the expected
age of retirement, which is 60 years, then you need to make sure your term plan
covers those extra years as well.
Factor in the Amount Needed for Your Family’s Maintained Lifestyle
The cover you receive should largely be able to help your dependent
family members sustain their current lifestyle. Also, while calculating the
same, keep in mind factors such as inflation etc.
Look Out For a Good Claim Settlement Ratio
At the end of the day, what matters most is that your family is
protected if anything were to happen to you. Therefore, it is wise to have a
look at the claim settlement process of your insurance company as well as the
ratio of claim settlement when picking a term life insurance plan.
Keep in mind all the above points and make a well-informed choice. We recommend Tata AIA Life Insurance Term plans, read more about the plan.