Term Plans are one of the most popular life insurance plans due to their simple product offering at an affordable cost. You get a sizable life cover (sum assured) at a relatively small premium.
Term insurance can help you secure your family’s financial future, even if you are no longer around. It works as a great protection tool helping your family weather financial uncertainty and manage expenses. It is therefore very important that you choose your term insurance plan carefully.
Here are a few key factors you must consider while comparing term insurance plans available in the market:
1. Duration of Cover: Ideally, a term plan should cover you for the total income you would make duringyour working years. Most companies offer policies for 10 to 50years. Ensure that you choose one that covers your needs comprehensively. You can compute the same in the simplest format as Income * Working Years = Protection Cover. Although it may be difficult to arrive at exact numbers, you can also weigh in an average yearly inflation rate of 6%.
2. Type of Plan: Historically, term plans are pure protection plans without maturity benefits. However, apart from the basic life cover policies, you can also choose from available plan options like the ones which provide a monthly income for your family’s living expenses apart fromthe lump sum cover. Choose a plan that best suits your requirements.
3. Additional Features and Benefits: You can maximize the benefits from yourterm plan by opting for add-ons, in the form of ridersat a nominal additional cost. Choose a policy that offers riders like accidental death, disability, critical illness etc. coverage.
4. Cost of the Plan: Different companies charge different premiums for the same life cover and tenure. This is because they have different service offerings and pricing policies. However, do not be influenced by cost alone. Examine the cost vis-à-vis its track-record, service offering, and overall purchase experience.
The Life Insurance Provider: Life insurance is a two-way contract. You play your part by paying the premiums; however, the moment of truth is when a claim needs to be made. Hence, choose your insurance provider wisely. Check an insurer’s performance with respect to its claims handling. Pick a company with one of the best claims paid ratio and a low claim pending ratio. You should also check the company’s financial stability by comparing the Sum Assured in-force value, as well as AUM numbers (Assets under Management).
Choosing a life insurance policy is an important decision. Feel free to ask questions, seek clarifications, and read the policy documents carefully. Explore the term plan details on the insurer’s website as well as compare term plans from different insurers.
Max Life Online Term Plan Plus. A Non-participating, Non-Linked, Term Insurance Plan (UIN - 104N092V03)