If you are wondering what is term insurance policy, think of it as a protection that you buy for your family’s safety. A term plan is an agreement between you and an insurance company, stating that in your absence they will pay your nominees a lump sum. It is an excellent policy, offering ample cover at a low price.
Various term plans are available in India, and you need to do intensive research to find the most suitable one. The following steps can simplify the process:
Compare your choices
There are many respectable insurance companies in India, offering a variety of term policies. To determine which of them is best for you, perform a thorough online comparison. Evaluate their coverage, benefits, premium, and flexibility options. Reviewing these aspects will help you determine the offerings of different term plans. Insurers have online term plan calculators, which you can use to discover the best options, which are currently available with ease. Everybody’s needs are different, and the policy cover has to meet the requirements. This is why buying a suitable term plan is essential.
Find the Claim Settlement Ratio (CSR)
When buying a term policy, you must get it from a trustworthy insurance provider. One of the best ways to do so is to look for their Claim Settlement Ratio (CSR). It is the percentage of total claims they settle out of the total number of requests they receive in a given year. The CSR shows if the insurer has the financial strength, whether they are customer-friendly, and if they have an efficient claim processing system. The Insurance Regulatory and Development Authority of India (IRDAI) releases the CSR data of the country’s insurance providers yearly. You can check that to get a better idea. A CSR of 90% or higher is considered excellent.
Look for a flexible term life insurance policy
Buying an online term plan helps with the selection process, as you can find all the required information quickly. When selecting a term plan, prioritize its flexibility. An ideal term life insurance plan is the one that lets you change your cover value according to your needs. If you ever require to increase or decrease the sum assured and the premium, it should be a hassle-free process.
Search for an affordable policy
One of the best aspects of a term plan is its affordability. It offers you a large cover at a reasonable premium. However, not all term plans have a similar price. You need to spend some time comparing suitable policies to find one that fits in your budget. However, deciding on the required sum assured is important here. Choose the cover value depending on your financial liabilities and then look for the most economical option.
Understand the policy
It is essential to have complete knowledge about the term policy before buying it. Every term life insurance policy has different regulations and benefits. You have to look for certain aspects, including its exclusions and inclusions, components that determine the premium, whether you can update the sum assured and the nominees, and the policy’s CSR. Purchase the policy only when you are satisfied with all these factors.
Finalize on the mode of premium payment
Once you have decided which term plan to purchase, the next step is to find the best premium payment method. First, you have to select the payment frequency and then the mode of payment. Ensure that the insurance provider offers the payment method that you find most suitable. An online term plan serves best in this aspect, as you can complete the process from anywhere.
After following these six steps, you will have a clear idea about which term plan to buy. Purchasing the right policy is essential to ensure the future financial security of your loved ones.