6 Ways to Choose the Best Term Insurance Plan

6 Ways to Choose the Best Term Insurance Plan

 

Investing in term insurance plans helps you add a protective shield to secure your family’s financial security. In addition, it will provide the necessary financial assistance during your unexpected demise. However, choosing the best term plan is crucial to satisfy your financial needs. 

Top Ways to Choose the Best Term Plan

Here are a few ways to help you select the term insurance correctly.

  • Analyse your current income and expenditure – Understanding your different sources of income and the expenditure will identify your current financial status. List down the income from all the sources and note down your routine expenditure and other utility payments. Include all other expenses such as your medical requirements, entertainment, travel, etc. 

Based on this budget, allocate a specific fund that you can invest in for your life insurance term policy. Ensure to define this fund to the maximum extent possible to accommodate a huge sum assured. In addition, you can restrict certain expenses to make it comfortable for you to invest long-term. 

  • Identify existing debts and future financial commitments – Apart from defining the routine expenditures, it is also important to calculate the existing liabilities and future financial commitments to determine the sum assured. For example, if you have availed of a home loan, you should determine the amount left for repayment. 

It is equally important to analyse the different stages in your life and the financial commitments related to your dependents to calculate the liabilities such as your child’s education and marriage fund requirements, parent’s medical requirements, etc. 

Based on these commitments, you can identify the extent of the sum assured required from the life insurance policy term plan that will reduce the financial burden for your family in your absence. 

  • Determine the right policy term and affordable premium – After understanding the necessary sum assured and the fund you can allocate from your steady flow of income, you can decide on the policy term and the most affordable premium. Insurers offer online term plan premium calculators to help you do this accurately. In addition, you can try different combinations of policy tenure and premium for the required sum assured. 

And, if you have decided to invest in term plans, do it early! It will help you afford a huge sum assured at the cheapest premium rate possible because you will be able to choose a longer policy term, and you will be in your best health which will reduce the death risk that your insurer has to cover.

 

  • Add the necessary riders – Choose your riders wisely. Insurance providers offer different rider options to enhance the benefits, such as the critical illness benefit, waiver of premium benefit, etc. Based on your family’s medical history and lifestyle, you can decide on the riders as it is available to you at an added cost.
  • Determine flexibility – Flexibility to term insurance solutions is necessary to customise the product to your advantage. For example, the Tata AIA life insurance term plan will allow you to increase the sum assured at different milestones in your life to help accommodate the increasing financial commitments. It should also offer flexible premium payment and payout options. 
  • Compare term insurance products – To identify the best term plan for your family, you need to compare different term insurance solutions based on flexibility, cost, and other features. Most importantly, you need to assess the claim settlement process and ratio to ensure maximum financial benefits when you are in utmost need. Then, you can read through the different plan options and features, compare the cost and identify the best term plan online. It is convenient and cost-effective. 

Conclusion

Term insurance plans provide the necessary financial security to your family during your unexpected demise by providing the death benefit. However, choosing term life insurance rightly is necessary to ensure the same. And to do so, you can analyse your income, financial liabilities, policy tenure and premium, flexibility, and compare products to choose the best term plan for your financial requirements. Finally, when you have purchased the term insurance plan, stay invested during the policy term to benefit maximally!