Term insurance is amongst the most commonly availed plans when one wishes to secure his family in case of an eventuality. The growing popularity and trust in the product has led to many providers to come up with plans of their own with competitive benefits and features. But before you move on to purchase a product for your needs, there are a few preparations you need to do at your end. Here’s what you need to be clear about –
Decide the sum assured you want –
Before you invest in any financial product you need to assess your expectations from it. Same is the case with term insurance. The first thing you need to be sure about is the sum assured you want. While deciding the sum assured, remember you need to be well insured and not over or under insured. Also, understand the reason why you want the policy, is it to make sure your family is secured in your absence, or you have a loan that needs to be paid of etc. Factor in inflation as well.
The time frame for the policy –
Mostly policies offer a time period of 10, 20 and 30 years to invest in a term insurance policy. You need to pick one as per your needs. So if you are buying the policy at an early age consider a longer period as you will get long term cover at an affordable cost. Consider settling on a term period around your retirement age, in this way you’d be free of most of your financial liabilities.
Your affordance –
This is a very important aspect to pay attention to. The sum assured you choose, your age and the coverage offered by the policy play a major role in deciding the premium amount you pay. Hence, it is advised that you buy the policy at an early age. Avoid being over insured or under insured. Being over insured will force you to pay high premiums and affect your cash flow in the present. Being under insured will not give your family the financial security they want. But while selecting a policy focus on the benefits it provides you and not just your affordance.
The provider you need to choose –
With so many providers in the market, you are bound to get confused as to which policy you should choose. Research on the different products in the market to understand what every provider has to offer. Then settle down on the policies that you feel are best for your requirement. Compare them for the features they have, benefits the offer, the premium they charge and the claim settlement record. Finally choose a policy that fits well as per your list of criteria.
Homework you need to do before buying a term insurance