Buyer’s Guide 101: Know How to Buy the Best Term Insurance in India
December 6, 2021
Buying term insurance today is a non-negotiable investment that an individual has to make considering the growing threats to life. Maintaining financial security under unfortunate circumstances is one of the first things you need to consider when you are making a financial plan for your future.
It is especially crucial to find the best term insurance in India if you are the sole breadwinner of the family. Let’s understand how it works!
What is Term Insurance?
A term insurance plan provides coverage to the insured person by providing financial support to their loved ones in case of an unfortunate event. It is one of the easiest and most affordable ways to secure your life. The best term plan in India is one that will help you get adequate life cover and allow you to make customizations as per specific needs.
The process of buying a plan can be challenging, however, as there are many plans offered by the providers that come under the best term insurance in India. A person should buy a term insurance plan after weighing all the benefits and features offered by insurance providers who have created plans and incentives for those striving to plan ahead.
Now that you know what is term insurance, let us read through some of the features to keep an eye on while buying a term insurance plan, which will help us build the best term insurance plan in India within our means:
1. Adequate Coverage:
First thing to know before investing in a term insurance plan is the amount of coverage a person may require. Since the coverage amount can be chosen by the buyer, it has to be according to the long-term financial requirements of the policyholder since the tenure of the best term insurance in India can go up to 100 years of age. Determining one’s required coverage amount can be done by calculating their Human Life Value and by opting for a coverage amount that is at least 6 to 7 times their total value while keeping in mind the financial liabilities of their dependents.
The total amount that one gets when they calculate their net salary and their debt liabilities as a total is called the human life value. It is imperative to have this figure while investing, as it helps to guide a policyholder through their assets and loans and gives them better visibility about their financial choices.
2. Premium Costs:
Term plans are considered important assets; which is why they are kept as affordable and accessible as possible. One can have premiums that can go as low as Rs 600 a month which makes it accessible to those with limited finances.
There is also the option to add to the existing benefits of these plans by choosing a plan that has a combined premium and tenure benefit, where one can expect a significant reduction in premium costs. Often, combinations of an annual premium over an extended policy tenure may reduce the cumulative premium costs incurred in the course of the insurance.
3. Customizations Offered:
A bonus that a term insurance plan has apart from its affordability is its flexibility. Many insurance providers keep the plans as basic as possible, with the customizations for the client to add as per their discretion.
One can avail customizations which can range from the choice of pay-out method, which can be a lump sum or as a staggering income. Premium payment frequency can also be chosen as per their comfort. These are customizations one can avail of within the existing structures of the plan or can select additional riders/add-on covers, which are also available in several options such as accidental death, permanent disability, etc.
4. Policy Tenure:
The choice of tenure that one can expect in the best term insurance in India will always lean towards the longer side, such as 25 to 30 years. It may be cost-effective to buy a short-term plan with premiums, but once they complete their tenure, the age of the insured person increases. The increase in age results from the insured having to go for higher premiums as stipulated by most policy providers. Hence one should get insured at a time where the tenure carries them through and post financially vulnerable times such as retirement.
5. Online Purchase:
A prospective policyholder can browse through various resources online to get an approximate idea of the plan that is the most suitable for a certain income and lifestyle.
One can directly compare and purchase plans on an insurance provider’s website as they often have incentives and offers for on-website purchases and online consultations.
Buying a term plan is more or less a simple and intuitive process, where the benefits of online resources have made it easier to navigate different plans and costs. If one is well-equipped with their finances and visibility before purchasing, they can find the best term insurance in India with little effort.