How to Choose Best Term Insurance Plan: Term Life Insurance Tips


6 min read

With a good term insurance plan, you can be assured to cover your beloved family from any financial calamity in your absence. But how sure are you about picking the right term plan for your family?

Buying a term insurance plan is crucial. However, with the plethora of insurance companies offering myriad life term insurance plans, it is indeed a huge task to choose the best policy for your family. So, how do you make a selection? Well, here we are offering you certain tips to support your decisive decision of picking the perfect term insurance plan for your loved ones. Read on!

9 Tips on How to Choose Best Term Life Insurance Plan

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1. Understand the policy well

Usually, term plans are basic forms of life insurance without much ado, it is still likely that you should understand the details or the terms of the policy well before making a purchase. If you pick the most appropriate term plan, it will ease your worries in terms of offering financial stability to your family. So, make sure to research well and talk to concerned people to know its features like coverage, tenure, and terms of premium payment among others.

And for better understanding of policy, it is very important to read the policy document well. So, don’t miss this tip.

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2. Consider the objectives of buying the plan

The objective of buying a term plan might vary for every individual. Someone may buy a term plan to secure his/her family, while some may like to save on tax etc. So, it is crucial to understand your objective first before getting the term life insurance coverage. That way, you would know your priority and accordingly you can find a policy coverage to suit the purpose and secure your family. Also, considering your age and the number of dependents in the family is also necessary to understand the need of the term plan.

The tip here is to buy a term plan as early in life as possible to avail low premium.

3. Determine your coverage requirement

Once you know the purpose of buying the term plan, you would come to know the approximate requirement of your policy coverage amount. Though, as a general rule insurance advisors suggest buying a term plan with sum assured that is 10 to 15 times of your income per year. Things that are generally considered are:

  • Debt amounts or loans you have to clear
  • How much you want to save or keep aside for your child’s higher education
  • Family expenditure on an average per year etc.

Here, the tip is to make use of the online calculators of term insurance policies and try to get a rough idea on the coverage you may require.

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4. Research policies and compare them to receive the best deal

This is another crucial aspect. Just going for a plan as suggested by someone is not what you are ought to do. Rather, you must compare different plans to pick the one that suits you well. It may be somewhat time consuming but since it is related to the financial security of your family, you must invest a certain amount of time to find the best term insurance plan.

You may look for suggestions from people for guidance, but the tip here is to choose a plan that meets your specific needs.

5. Choose the policy tenure to suit your purpose

Another important aspect to consider while buying a term plan is to check the tenure of policy. Policy tenure is the time during which the insurer covers you under the plan. It can range from any number and may be available till lifetime. So, you must ensure the tenure that you would need your policy to cover you as per the liabilities or goals. The tenure of the policy must be such that it supports your loved ones in case of any unforeseen event that may appear in life.

The best tip here is to pick the longest possible tenure because you never know how long will you survive.

6. Choose a reliable insurer offering the best CSR

This is a very important aspect that most people tend to forget. You must check the claim settlement ratio (CSR) of your insurer in the past years to know how the company is performing and how good the company is in paying claims.

The best tip to find the CSR of various insurance companies is by checking the official website of IRDAI to get the accurate numbers.

7. Consider availing riders/add-ons/b>

Though you may not require a rider or add-on at the time of buying a term plan. However, you may need a rider in due course of time with your changing needs. So, make sure that the insurance company offers proper riders that you can opt for at the time of buying/renewing the policy.

Remember the tip to buy the riders mindfully as per your requirement to increase your term insurance protection. Don’t just pick any rider randomly.

8. Don’t hide any information from the insurer

Hiding details like any pre-existing diseases, any habit like smoking, drinking alcohol or any profession hazard etc., can lead to hassles in claiming the policy later. Further, it may cause the policy to get rejected too.

Hence, the tip is to be truthful in letting your insurer know about all such things.

9. Always go for comprehensive policies

As much as possible, try to seek a policy that would give you the option to include riders like critical illness or accidental death etc. This is because you are not sure what the future has in store for you. Hence staying prepared for such emergencies is important.

With the ever-growing insurance industry, policies keep changing. So, the tip here is to keep re-evaluating policies in terms of your needs so that you can opt for the best term insurance plan if given an opportunity.

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To Conclude

Of course, selecting a term plan considering all the aspects and features it offers is necessary. Also, it is equally important that such features serve your purpose well and suffice the needs of your family in times of need. If you are finding it difficult to make the best choice, the tips mentioned above might support your selection. After all, you are buying the best term insurance plan in India for the benefit of your family, to make them financially stable. So, it is very important to make the right choice.

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FAQs: 2023 Guide to Choose the Best Term Insurance Plans

What factors are required to consider while selecting a life insurance plan?

It is important to consider the below points before purchasing a life insurance plan:

First check your insurance requirements  
As per requirement, look for suitable plans 
Compare different plans before choosing the best one
Choose a policy premium that is easy on your pocket
Check the CSR or Claim Settlement Ratio of the best term insurance company in India etc.

What are the key components of an insurance plan?

The key components of best term insurance in India include:

Premium amount
Policy Limits
Riders or added coverage etc.x

What are the Different Types of Term Insurance Plans?

Various types of term insurance plans include:
Level Term Plans
Increasing Term Insurance plans
Decreasing Term Insurance plans
Return of Premium Term Insurance plans
Convertible Term Plans

Who is an ideal consumer of life insurance policy?

Most people prefer to buy a life insurance policy because it allows them to accumulate a corpus for the future or for their family. The ideal consumers of life insurance policies are those who want low premium or flexible premium options. Also, parents who want to secure the future of their kids serve as ideal consumers among others.

How insurance protects individuals from financial loss?

Insurance allows the family of the insured or the nominee to avail sum assured in the form of death benefit. Thus, it makes it easy for them to face any unexpected monetary losses in the event of demise of the policyholder. 

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Feb 20, 2023
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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