Here’s How to Buy the Right Term Insurance Plan in 2021

When we first start earning money, our family, particularly our parents, encourage us to put money aside for a rainy day. Friends and co-workers gradually provide suggestions on how to approach financial planning. If you have ever been a part of one of these discussions, you know how important financial security can be. Those advising you would expressly recommend you to seek term insurance plan, especially if you have financial dependents.

The need to provide a secure future for your family has become even more urgent, especially during the pandemic. If you are looking for the right financial product to help you with this, you should definitely consider a term insurance plan. A term insurance policy is one of the most cost-effective investment options that offer enough coverage. 

Let’s understand how it works so you can make an informed purchase decision!

What is Term Insurance and How it Works?

A term insurance plan is the most basic type of life insurance, providing a fixed sum assured upon the demise of the insured person. The amount is provided to the nominee of the term insurance policy, and it is predetermined at the time of purchasing the policy. 

The premium rate for term insurance is determined by the policyholder’s age, health status, and the policy’s terms. A term insurance policy can provide adequate coverage for your family’s survival if you meet with an unfortunate incident. It is often recommended to buy the term insurance in India, early on in life to avoid paying greater premiums for suitable coverage in the future. 

Features & Benefits of having The Best Term Insurance in India

When it comes to financial security, each individual wants to purchase the best term insurance in India. However, most policy buyers start by comparing policy prices. Yes, the cost is a crucial element to consider. Nevertheless, putting too much emphasis on the cost of a term insurance plan could jeopardise your family’s financial security.

Understanding the features and benefits will help you compare term insurance policies provided by different insurers and make an appropriate decision, based on all crucial factors. 

Here are some features and benefits of term plan that you should know:

  • Term insurance is one of the most cost-effective financial instruments for protecting your loved ones’ future when you are not around. It has relatively cheaper premium rates than other insurance products and offers protection for a longer period. 
  • The plan solely provides a death benefit and does not provide any maturity returns. However, if you have a return of premium rider attached to your term insurance plan, you are eligible to receive a maturity benefit upon surviving the policy. 
  • A term insurance policy provides a substantial amount of coverage for the policyholder’s family at lower prices, especially if bought at an early age.
  • A term insurance coverage can cover you until you are 75 years old.
  • You can enable your family to maintain their standard of living, pay off debts and achieve life goals by opting for an adequate coverage amount with term insurance.  
  • There are riders available with term insurance plans that can increase the coverage of the policy significantly. 
  • You can also choose to pay the premium payment frequency to be monthly, quarterly, half-yearly or annually. 
  • The premiums paid annually for a term insurance plan are tax-deductible under Section 80 C of the Income Tax Act, 1961. 

Things to Remember When Buying Term Insurance

Let’s look at some things you should keep in mind to buy the best term insurance in India for your family:

  • Claim Settlement Ratio: Consider the insurance company’s performance before selecting a term insurance policy. You can easily find the claim settlement ratio of an insurance company, which is a measure of how frequently the company accepts or rejects claims.
  • Availability of Riders: Check for the availability of riders with the term insurance plan, compare the costs of the riders with different plans and buy the one that offers comprehensive benefits and aligns with your budget
  • Premium Amount: Use the term insurance and savings calculator to determine the payable premium amount on the basis of the cover amount, policy period and the riders you have attached to the policy. 
  • Personal Financial Situation: Understand your current and future financial needs well before choosing a term insurance plan. Also, keep in mind any outstanding debts you may have which can fall upon your loved ones in your absence. 

In the Indian market, there are a variety of economical term insurance options. Therefore, it is favorable to compare the plans online and then select the best term insurance in India that meets their needs and is within their budget.

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