A term insurance policy is a life insurance product that offers financial protection to the insured person for a specific time. The best thing about a term insurance policy is that the insurance benefits will go to your loved ones to maintain their lifestyle and secure their goals in case of your demise during the insurance term.
Why should you buy a term insurance plan?
Term insurance is the most affordable insurance plan that you can take to ensure financial security for you and your family members. It is advisable to buy term insurance as soon as you start earning to have a financial backup at the time of a health crisis. It is more crucial to have a term insurance plan if you have dependents in your family.
However, there are numerous term insurance policies available in the market. It is prudent to make a careful term policy comparison before choosing a term insurance plan.
Term insurance comparison guide
The insurance market is loaded with different life insurance plans, and each plan has specific coverage features, discounts, and premium rates. It is imperative to make a term plan comparison online and get the best deal available for yourself and your family.
A term insurance policyholder should look into the following factors to compare insurance policies and select the best term insurance.
- Claim settlement ratio
Seeking a track record of term insurance claim settlement gives a clear picture of the insurance company when you compare insurance policies. The claim settlement ratio is provided by the Insurance Regulatory and Development Authority of India (IRDA) to help the policyholders in choosing the right insurer.
It would be prudent to look for a higher claim settlement ratio while making a term policy comparison. It indicates that the insurer has been quick in settling life insurance claims.
- Feature to add-on critical illness cover
You may face an unfortunate critical medical issue that requires brain surgery or a cancer operation. In such cases, it costs a lot of money. You have to redeem your savings and cripple your family finances to afford surgeries. If you choose a term insurance plan with critical illness cover, you can protect yourself against such risks. Almost all critical illness add-ons cover the costs involving the diagnosis of critical illness.
- Insurance company reliability
The insurance company’s reputation and reliability have a direct impact on your term insurance plan. You do not wish to opt for an insurer whose claim settlement process is slow and unreliable. While making a term plan comparison, ensure to check the credibility of the insurance company.
- Insurance Premium
The first step you should take while making a term plan comparison is finding out the premium rate that your insurer is offering. A golden piece of advice would be to look around and compare different insurance plans, and then choose an insurance policy that offers higher coverage at an affordable premium rate.
If you do not smoke, you can avail of discounted premiums offered by some insurance companies to non-smokers.
- Solvency Ratio
The solvency ratio is one of the crucial parameters to consider while making term policy comparisons. It indicates whether or not the insurance provider you have chosen has the financial capacity to settle the claims if the requirement arises. Based on IRDA, you should choose insurance companies that have maintained a solvency ratio of at least 1.5.
When buying a term insurance plan, you can add different rides to make your coverage more comprehensive. Although you will have to incur a slightly higher premium, the long-term financial benefits of these add-ons are impressive.
When making a term plan comparison, you must consider riders such as critical illness benefit, waiver of premium, accidental death and disability cover, etc. Furthermore, it would be wise to assess your needs and buy a term insurance plan that caters to your financial safety plans.
- Life insurance policy duration
No one can say that he/she can foresee the future even with great health and present financial stability. The benefit of opting for a life insurance plan is that it covers both your working and post-retirement years. It offers financial independence even when you are not earning after your retirement.
Therefore, when you compare insurance policies, choose to buy term insurance having a maximum insurance coverage period.
While buying an online term policy, look around and compare different insurance plans and choose the best insurance policy there is. To do that, it is essential to pay heed to the above-stated factors.