Review by Indian Money Factors to Consider While Buying Term Insurance
Term life insurances are pure protection plans that comewith no maturity benefit. We all know the importance of a term life insurance andhow it helps us to secure the lives of our dependents. it is the simplest andthe most effective tool to secure your family at affordable premium rates.
Even if you have accumulated a large sum of money, acritical illness or an accident is enough to destabilize your finances. Buyinga term life insurance not only shields your dependents in case of your deathbut also provides coverage during a critical illness or an accident and coversthe loss of income.
Want to know more on Term Insurance We at IndianMoney.com Review will make it easyfor you.
4 Factors to ConsiderWhile Buying Term Insurance
Factors to ConsiderWhile Purchasing a Term Plan
As you are spoilt for choices, you must consider certainimportant factors while selecting a suitable termplan. Here are a few important factors you must keep in mind whilepurchasing a term insurance plan
Sum Assured
According to Indian money ReviewBangalore while purchasing the term plan the most critical step is tocalculate the coverage amount. The coverage amount is the sum that yourdependents will receive in the event of your death. As per the experts, the sumassured of your term insurance policy should be at least 8 to 10 times yourannual income.
To calculate the amount of coverage you require, you mustaccess factors like your age, liabilities, monthly expenses, lifestyle expense,and financial requirements of the family in future, your debts and inflation.If you have any loans, then the payout should be such that it will help yourfamily meet their financial requirements as well as repay the debt. You cantake the help of the human life calculator to understand the required coverageamount.
Policy Tenure
The main objective of purchasing a term plan is to leaveyour dependents a considerable sum of money. The money paid to the beneficiaryis meant to replace the income of the life assured in case of his or herunfortunate demise.
It is important to buyterm insurance early to gain maximum coverage. As such the age of entry isan important factor for deciding the coverage period. If you buy term insuranceat 25 years then you can avail a maximum coverage of up to 65 years. But if youpurchase a term plans at 45 or 55 years then the coverage period becomescomparatively lesser.
Therefore, life insurance must be availed for your entireservice period. You can even opt for a longer coverage period if you intend towork beyond your retirement years. Buying term insurance at a young age isbeneficial as you can enjoy longer coverage tenure at lower insurance premium.If you purchase a plan in your 50s then you will have to spend a good amount onthe premiums.
Claim SettlementRatio of the Insurance Company
The claim settlement ratio is one of the key factors buyersmust consider while purchasing a term insurance plan.The claim settlement ratio refers to the percentage of claims approved by theinsurer divided by the total number of claims it has received. This ratioindicates the number of claims the company has settled. It becomes an importantpoint while deciding which insurance company should be considered whilepurchasing the policy.
Insurance Riders
Riders are a provision that adds benefits to the basic insurancepolicy. You can choose riders to modify your base insurance policy toenhance protection. There are several riders offered by the insurers that allowpolicyholders to make the necessary changes.
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