10 Things to consider before buying a term insurance policy in 2023

Things to know before buying term insurance in 2023

Whenever we talk about insurance, the main terms we hear are health insurance, motor insurance, and term insurance. So, what is Term Insurance? A term life insurance policy is well-crafted financial coverage provided to a policyholder’s family for a specific period as mentioned in the policy. This coverage can be availed in exchange for a specific premium amount.

Want to buy the best term insurance plan? Do not hurry, and do not buy one unless you are aware of certain things about a term insurance policy. In this post, we aim to acquaint you with the 10 factors to know before buying a term life insurance policy. So, stay tuned and read on to know about the critical elements before you buy a term life insurance plan.

Why Should You Buy Term Insurance Plan – Term Insurance Benefits

As we mentioned earlier, the biggest benefit of one such plan is that it provides financial security to your whole family in your absence. Life is uncertain, and if you are the only bread-earner of the family, buying a term life insurance will help them with financial aid in case of your untimely death. It won’t be wrong to state that a term insurance plan acts as a temporary financial shield for your family to meet their short-term financial requirements like a child’s education, marriage, or paying debts and getting financial cover for a health issue in the family.

Also Read: How Is It Beneficial To Buy Term Insurance Online?

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To help you make the right purchase we are now sharing 10 factors worth considering before buying a term life insurance policy. Have a look:

#1. Right Time to Buy a Term Insurance Plan:

The first thing to know about a term life insurance policy is the right time to invest in it. The earlier you buy, the better it is. When bought at a younger age, a term life insurance plan comes with low premiums and the best benefits. Those who buy term life insurance at an older age, need to pay higher premiums due to an increase in the chances of their health disorders.

#2. Tenure of a Term Life Insurance:

The second important thing to consider when buying a term life insurance policy is its tenure. The simple formula in this respect is that the longer your term insurance tenure, the higher premium you would have to pay for it. Insurance experts usually advise a tenure dependent on your retirement.

#3. Choosing the Best Insurer:

To get the most out of a term life insurance plan, you must choose the best insurance company. Although all the term insurance companies are regulated by IRDA or the Insurance Regulatory Authority of India, they do have different plans and policies. Do thorough research about the insurance company and compare it with other companies as well before buying a plan.

#4. Term Insurance Tax Benefit:

Another thing to know before buying a term life insurance plan is that these days several term insurance companies also provide additional health cover. Those who buy a critical illness rider along with a term life insurance plan can avail of the tax deductions under term insurance tax benefit 80Dof the Income Tax Act.

#5. Choose the Right Type of Plan:

While buying the best term insurance plan in India, you must first check out the different types of plans available. For this, first, figure out your needs and your budget. Based on these two main factors, search for the right type of term plan with an affordable premium and maximum benefits.

Also Read: Health Insurance vs Medical Emergency Loan

#6. Buying Online or Offline:

It is not always wise to rely only on insurance agents for buying a term life insurance plan. The best of term insurance policies can now be bought online with a few clicks. Try PayBima for that matter to get the best term life insurance policies at the most competitive pricing after comparing the features, pricing, and availability of the best policies online.

#7. Adding a Benefit Rider:

Buying a plain term life insurance policy won’t benefit you unless you add on benefits with the help of additional riders. The best tip here would be to add a health cover plan too with a term life insurance to enjoy the benefit of both a term life insurance and health insurance. Some other popular riders to add are Accident Disability Benefit, Income Benefit on Accidental Disability, Waiver of Premium, Accidental Death Benefit, and so on.

#8. Term Insurance Premium Calculator:

Do not forget to use an online term insurance premium calculator to estimate the premium amount you may be expected to pay for a term insurance plan. A term insurance calculator will help you plan your budget accordingly and assist in buying the most appropriate and affordable term plan based on your income and savings.

#9. Claim Settlement Ratio/ CSR:

Another vital thing to know before investing in a term insurance plan is the CSR or Claim Settlement Ratio of the insurance company. When finalizing an insurer for such a plan, do check the percentage of claims settled by the company in a particular financial year. This will give you an idea of the reliability of that company to settle such claims. A good-term insurance company will have a CSR of around 95%.  

#10. Do Add the Nominee Name:

The last thing to know before buying a term insurance policy is that you must choose a nominee carefully. It could be your spouse, child, sibling, or anyone whom you intend to pass on your term insurance plan money.

Best Term Insurance Companies India

Also Read: List of 11 Best Term Insurance Plans in India 2022

Conclusion

Apart from using these above-mentioned 10 factors, make sure to first understand your requirement before you purchase a term life insurance plan. The Internet is the best place to search for information regarding various policies and calculate the premium with utmost ease. Do not delay buying a term insurance policy to secure your family’s future and for this make the right decision at the right time with all the valid documents.

Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

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