Term insurance provides financial package to safeguard those who depend upon you for financial aid in case of your sudden demise. The coverage of term insurance is the cheapest insurance policy option available to you. Besides that, you can use the additional amount in other investment plans. Term life insurance does not create the cash value as a whole life policy does. The insurance premium usually elevates as the policyholder grows older on each renewal.
5 factors you must consider before buying a term insurance policy
Here are the five important factors to take in to consideration before buying a term insurance policy:
1- Policy Tenure
25-35 years is considered to be the best age for buying a term insurance plan. As you will not only pay less premium but will also get more coverage. It is the best age slab as your financial liabilities get significantly reduced and you can plan your other financial goals in a better way.
2- When should One opt for Term Insurance?
Well, the best time to head for the purchase of term insurance is now. The reason behind it is that the term plans get costlier as you get older. The most significant risk it involves is that the person can acquire certain diseases that often makes it difficult for us to enter the term plan.
The insurance company may deny underwriting any danger or increase the premiums if you come across any medical ailment. Our future is unpredictable, but our financial liabilities are certain, and therefore keeping a set of crippling financial penalties behind on one’s dependents is avoidable and irresponsible.
3- Should One Purchase More Protection via Riders?
Insurance policy riders are similar to the pizza’s extra toppings. A traditional insurance policy pays the amount only at the time of death. But there can be certain circumstances like a severe accident or critical illness that can wholly remove one’s earning capacity.
Various forms of riders like Permanent Total Disability riders or Critical Illness riders act as a savior here. The given riders ensure that the insured sum is paid up to the policyholder if any of the mentioned unfortunate things occur.
4- Which is The Best Place To Buy Insurance?
The rates of term plan can vary from company to company, so you must do a lot of research before purchasing them. Well, your neighborhood agent may not seem to be the best person on whom you can trust for guidance. The plan he suggests to you may come with an exorbitant price tag and he might want you to go for the other products that would fetch him more significant commission charges. You might not be aware of the fact that the term products have low agent commission.
From our perspective, the best place to purchase a term insurance plan is online due to the given below reasons:
- You can compare all the features and prices of all the different term insurance plans delivered to you there.
- The process is quick and hassle-free, and it won’t consume more than 10 minutes of yours.
- Medical tests and several other documents will be arranged by the insurance organization at your home itself.
- You can pay for your premium amount either through your credit card or via net banking.
5- Disclose Correct Information
You must reveal all the needed details genuinely. Even a small discrepancy might become the reason the insurance organization would reject your claim. So, it would be best if you keep these pointers in mind at the time of completion of your proposal form:
- Tell everything about your medical history: You are not required to hide anything. Like if you are suffering from any disease previously, then you ought to mention it. At the time of death, the insurance company believes that it could be because of the non-disclosure of the existing disease; they can reject your claim. It usually happens in non-medical cases.
- Tell about your family history as well.
- If you drink or smoke, then mention that thing specifically. Besides that, you need to mention your physical parameters like weight and height.
- Mention your occupation and income correctly. If your work exposes you to greater risk (like mining, armed forces, etc.), mention it.
- Mention any other insurance policies that you have along with it.
The prime objective of taking the term insurance policy is to quickly replace all the financial loss that occurs after an earning family member’s sudden death. In simple words, a term insurance policy is essential for a young man/woman who is married and has children or someone who has just started his/her career.