Life never goes as planned. So your untimely death can leave your family in shock. Now imagine if they have to deal with financial difficulty while already being emotionally disturbed. This is very common for people who do not plan for their families rightly. If you don’t want to be one of them, a term insurance plan is your rescue. The policy assures that none of your family members has to go through a tough financial time after leaving them in uncertain conditions. However, it becomes a little challenging to choose the best term insurance plan with so many options available in the market. To make your work convenient, here is a complete guide on these policies that will help you get through the hassle.
The Working Of Term Insurance
For selecting the best term insurance plan, it is crucial to know how they can work for you. A term insurance plan is an amount saved for your family, which they will receive if you have an untimely death. The amount is decided based on factors like your monthly expense, current income, assets, liabilities, etc. Once you come up with a number, your insurer calculates the premium that you will have to pay throughout the policy term. Your health, age, and a lot of things can affect this premium.
If you are alive by the end of the term, you either get a lump sum, or the plan collapses. You can renew the policy by the time you are in the age limit, and the premium would be calculated again at each renewal. Plus, you can also decide the payment method to be one-time or monthly income. It will depend on the requirements of your family.
Features Of Term Insurance
You can find a variety of options to choose from, and each one of them has its benefits. Some of the necessary features that you should look for are:
- Age Limit: There is generally an age limit of 70-85 to avail the coverage.
- Sum Assured: is the amount that is paid to the beneficiary in case of your death.
- Health Test: To check for critical illnesses, the insurer can ask you to undergo a medical checkup.
- Tenure: The period for which you are covered under the policy is known as its tenure.
- Claim Settlement Ratio: CSR is the ratio of insurance claims that have been settled by the insurer. So a higher CSR means the insurer is more responsible towards their clients.
- Riders: These are the extra benefits that you can add in your best term insurance plan. You can check out the guide on term plan riders.
Points To Consider
The few factors you must consider while opting for the best term insurance plan are:
- The premiums should not be hefty on your pocket.
- The sum assured should fulfil the needs of your family.
- The policy should be flexible.
- Riders should be selected carefully.
- The claim process should be quick and straightforward.
With the help of these points, you can select different types of term insurance plans.
You must have understood the working of term insurance plan by now. With the help of this guide, you can easily select the best term insurance plan that fits your budget and keeps your family’s financial future safe.