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Term life InsuranceJune 26, 2020

Certain essential things that you should verify in your term insurance policy

We usually don’t imagine uncertainties to knock their door, but it does. The present situation has taught us how to manage everything in the worst scenario and made us think again about securing the future of our loved ones at least financially.

Certain essential things that you should verify in your term insurance policy

No one should wait for the so-called ‘right time’ to secure their family’s future. Instead, it is better to be prepared and plan to handle such scenarios well in advance. Being secured financially lets you be stress-free during financial emergencies. And one prominent way to do this by investing in term life insurance.

Term Life Insurance is a simple, effective, and affordable way to safeguard yourself as well as your family from any kind of financial distress. It offers monetary assurance in case of an unfortunate event. To get going with this form of life insurance, you just need to pay premiums against the insurance coverage for a specific period of time. Upon the untimely demise of the policyholder, the insurance company pays the death benefit, or the sum assured to the nominee of the policy.

Therefore, moving further, we have listed certain essential pointers to look for when you opt for term insurance in a challenging time.

Research and opt for the right term life insurance: Your choice of term insurance wholly depends on your needs and requirements. Term life insurance act as a safety net for your family in times of uncertainty. Therefore, while opting for a term life insurance, you need to keep in mind your requirements, rising monthly cost and inflation. There are different types of term insurance – pure term plan, decreasing and increasing term plan, term insurance with monthly income and return on premium term life insurance. Whether you buy insurance policy online and offline, the choice of term insurance should be based on your needs only.

Assess your financial requirements: You must plan for your family’s financial needs well in advance. And term insurance is one such product that offers complete financial protection to your loved ones in your absence. To evaluate this, you should consider your income, debts and liabilities, number of dependents, regular expenses, present and future financial goals such as child’s education, marriage as well as your retirement planning amongst others.

Evaluate the insurance coverage: While opting for the right insurance coverage amount, you need to consider certain important factors like your age and duration of the policy. Experts suggest selecting a higher insurance sum assured or protection, keeping in mind the rising inflation such that it does not affect your family’s lifestyle. A thumb rule is when you are young about 25 to 30 years; the insurance coverage should be 10 to 15 times of your present annual income in addition to your outstanding loans and liabilities. Similarly, if your age is about 35 to 45 years then decrease the yearly salary by five times and the rest remains as it is.

Check your insurer’s claim settlement ratio: Before buying the term insurance plan, do check the claim settlement ratio of the insurance provider. Higher the ratio, higher, is the credibility factor of the insurer. And hence, it is always better to select an insurance provider with a high claim settlement ratio.

Add riders to enhance your term insurance coverageRiders are the add-on benefits that increase the coverage of your term insurance policy. There are a number of insurance providers that offer various riders along with your base term plans. Among all, the most popular riders include critical illness, death benefit, accidental benefit etc. But it would help if you always focused on your requirements and then choose riders.

Needless to say, that term life insurance cannot fulfil the irreparable loss. However, it can offer the most affordable and pure form of financial protection to your loved ones in your absence. Term insurance coverage amount ensures that your family has sufficient money to lead their life comfortably while managing liabilities and unforeseen expenses. If you want to opt for a term life insurance, then considering the above pointers will help you in choosing the right one for yourself and your family. If you still have any concerns, then you can also visit BimaKaro.in to get customised quotes for term insurance or speak to the insurance experts.

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