Are you looking for the best term plans? If yes, you should certainly aim to get the maximum possible coverage that will financially secure your family without any worries. How do you ensure the same? Here are a few tips that will stand you in good stead.
Choosing the Best Term Plans for Your Needs
The first thing that you should do before choosing term plans is to find out the coverage amount that is sufficient for you. Make a note of what your family will require financially in case you are not around in the future. This may include the following:
- Basic household costs every month
- Children’s education
- Weddings and other big-ticket expenses
- Repaying any loans that you may have
Ensure that you factor inflation into the mix while calculating all these expenses. Once you have the final figure, deduct this from your liquid savings and investments specifically earmarked for dependents’ financial security. The amount that is left will be your ideal coverage amount. The trick now is to zero in on the term plans that offer this coverage amount. You should also use a term insurance calculator to work out the premium payable for your desired coverage.
Make sure you opt for an adequate sum assured based on your financial obligations and dependents’ future needs rather than simply choosing the highest possible amount you can afford. So, once you’re done with your homework, you have to prioritise finding the right term plan that offers sufficient coverage at a reasonable premium. Another thing is to look out for rider options for term plans. These will provide additional financial support in specific situations, such as critical illness or accidental death.
Some Other Aspects Worth Noting
While choosing term plans, make sure you also selecting the right policy tenure for the same. This should be done based on your unique needs. For instance, you may want coverage for your working years or your lifetime, depending on your dependents and family circumstances. Finalise the maximum coverage amount that you can pay, choose the insurer offering the same at the lowest premium, check the terms and conditions, and then pick the riders you want to expand coverage.
Also, choose a reputed insurer with a good track record and an easy application process. Check what is known as the claim settlement ratio (CSR), ensuring that it is high and accompanied by a good claim processing record and grievance resolution rate. Be clear about the terms of the policy and what it includes/excludes. Also, review the premium loading, rider costs, and policy revival charges carefully to avoid any future surprises.
You can then make your decision and financially safeguard your family from unforeseen situations in the future. After all, skimping on the coverage is a strict no-no, since it is what gives your family that much-needed financial cushion to tide over your sudden absence.