Recent Trends in Term Insurance & Steps to Buy It
Life is unpredictable, while one moment can be full of joy, the next could bring unexpected sorrow. It is important to have a financial safety net for your loved ones in case anything unexpected happens to you in the future. Therefore, we often look for the best term insurance to buy. A term insurance plan helps to relieve the financial burden on the members of your family if something were to happen to you in the future.
What is a Term Plan?
A term plan is a kind of a life insurance policy that offers a life cover for a pre-specified period of time. In case of an untimely demise of the policyholder during the term of the policy, the insurance provider pays out a sum assured known as the death benefit to the appointed nominee. If the insured individual survives the term of the policy, there is no maturity benefit provided.
What is the Current Trend in Term Insurance?
In the current scenario of the market, with the increased financial knowledge and it spreading among the different segments of society, many people prefer spreading their investments instead of having a majority of their funds stuck in a particular type of investment. Therefore, term insurance compromises an important part of the investment portfolio of the people these days.
Term insurance plans, especially the ones offered with additional riders are gaining popularity day by day. The reason behind this is that in return for an additional premium, these riders enhance the scope of coverage for aspects such as critical illness, accidental disabilities, etc.
Steps to Buy Term Insurance
There are numerous plans available in the market. The endless options often leave most of us baffled when it comes to choosing the most valuable plan. To make this search easier for the best term insurance to buy, below mentioned is the approach you can refer to while you decide to buy term insurance:
Assess Your Needs
A term insurance policy has to be sufficient for the needs of your loved ones in your absence. While keeping this in mind, you should assess factors such as the source of income, the dependents, existing liabilities, and the expenses incurred to sustain the current lifestyle. Furthermore, there are additional expenses that need to be taken into account such as a child’s education, child’s marriage or pension for your partner.
Compare Quotes and Choose the Variant That Is The Best for You
There are different types of plans available when you buy term insurance. It is advised to choose the kind of term plan that suits you the best in order to decide the best term insurance to buy.
The premium charged on your term policy varies with factors such as the cover amount, type of plan, cover duration, gender, age, and smoking habits. Therefore, to get the best deal for you, it is important to compare the quotes across different insurance providers.
Check Claim Ratio of The Insurance Provider
When you seek the best term insurance to buy, do not overlook the possibility of the insurance provider not paying out the death claim to your family members. For this reason, it is important to check the claim settlement ratio of the insurance provider. A claim settlement ratio helps determine how well the insurer settles the claims.
Consider the Inflation
While the most important factors to consider when you buy term insurance are age and duration. However, it is important to keep in mind the impact of inflation on your lifestyle and needs. Some providers even offer term plans that protect you against inflation. Such plans are ideal for someone who does not want inflation taking up a huge bit of their sum assurance.
Look for Additional Riders
Term insurance riders help in enhancing the scope of protection of your term insurance plan. Most of the insurance providers offer add-on riders to increase the level of protection offered by your term plan. Some riders available in the market are accidental death benefit rider, accidental total or partial disability rider, premium waiver rider, etc.
To Further Conclude
Term insurance is an exceptionally important thing which should be bought as soon as one starts earning a stable income, instead of putting it off until a later stage in life. It is the simplest type of life insurance and to buy term insurance is as easy as applying online.
While deciding on the best term insurance to buy, you should always remember there is no one best term insurance for all. It is always key to consider the lifestyle needs of you and your family members before opting for any term insurance plan. The terms of the policy vary as per factors that are different for different families. However, it is equally important to research your provider and ask around before locking in any policy.