6 Things to Consider While Buying Term Insurance Plan

If you’re new to the world of life insurance, and are looking for a policy that will cover you for a specific period, a term life insurance policy, or a simply a term plan, can be your best bet. A term plan provides high sum assured to the policyholder at low costs. This sum assured is given to the policyholder’s nominee in case the policyholder dies during the policy term.

You can buy term insurance either offline or online. However, when you go to buy term insurance, you’ll get a lot of options to choose from which might leave you confused. Therefore, to help you out, we've listed certain things to consider while buying term insurance in this article.

Choose a plan that best answers the below questions for you:

Plan Features

What are the features offered by the plan? – Some important features to look out for will be flexibility in enhancing the cover as per your need, cover critical illnesses or cover all your protection needs

Maximum Coverage at Affordable Cost

How much premium are you required to pay? – Do evaluate a term plan from a Company who has a legacy of trust and then identify the maximum coverage that you can get at an affordable cost.

Flexible Payment Term

What is your payment term? – Look out for a plan that provides you flexibility in choosing the payment term. For example, you may decide to pay premium in lumpsum amount or in monthly/yearly instalments.

Riders¹

What are riders? – These are helpful additional features that you can check out like include waiver of premium, accidental benefits, etc.

Claim Settlement Ratio

How good is the insurer's claim settlement ratio? – The higher and more consistent the claim settlement ratio, the quicker and more robust is the company in its claim settlement process.

Solvency Ratio

What is the insurer's solvency ratio? – As per IRDAI, every life insurance provider should have a solvency ratio of 1.5, which tells if the company will be financially capable of settling your claim, should such a requirement arise.

If you always remember these things to keep in mind while buying term insurance, it will not be a painful or confusing task for you. You should be aware of what you are looking for in terms of coverage, how much you can spend, and how long you need insurance for.