Monday, January 17, 2022

Need The Best Term Insurance Plan? Keep These 5 Things in Mind Before Getting Started 

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Today, the requirements of an individual are not limited to recurrent spending and incidental expenses. The nature of expenses today have changed drastically[1], with inflation and high-lifestyle costs being effecting the monetary situation of people across all income brackets. In order to sustain oneself and their dependents, it has become imperative to practice financial planning for the years to come.  

The need to have a contingency plan in the event of a primary income earner’s demise is the goal that is fulfilled by term insurance.  

A term insurance plan is a plan that covers the monetary needs of the insured and their dependents through an assured benefit sum in the event of the policyholder’s demise. Often deemed as the best term insurance plan in India, a standard term insurance policy is considered to be one of the most affordable means of securing one’s future where premiums are low and one can customise their coverage and payout methods as per their convenience.  

Since these are anxieties most people have to mitigate, insurance providers and policymakers have introduced an abundance of term insurance options in the market. Choosing the right one however, can be a tedious process to navigate. Therefore, it is very important to know all the details, features and benefits of term insurance before investing.  

Since term insurance is an important process and requirement, it helps for first-time policyholders to make an informed choice and find a plan best suited for their needs. Therefore, let us look at some of the things to keep in mind while choosing the best term insurance plan: 

  1. Calculate Present Liabilities and Expenses:

The sum assured is the benefit, or assured monetary guarantee that a policyholder is given at the time of the purchase of the policy. The best term insurance plan and the coverage it offers is determined on the basis of various fields such as age, income, assets, liabilities, and existing cover. A life insurance calculator calculates a coverage amount that is adequate to cover the debt expenses an investor may leave behind, and any additional financial liabilities[2] their beneficiaries may have.  

In case a policyholder seeks additional coverage, with a nominal amount paid over the existing premium plan, a policyholder can expect to secure the additional cover provided under various riders that are made to protect the policyholder from situations apart from death.  

There are riders available in term insurance for situations such as Accidental Death, Critical Illness, and Disability. 

2. Future Financial Obligations:

Term insurance plans are also designed to help people become more adept at managing their finances and being equipped with financial literacy that can help them plan their future through ideal investments. A policyholder and their dependents are able to fulfil all financial goals such as education, asset purchases, and marriages without exhausting their savings, even in the event of the policyholder’s death.  

Therefore, before buying a life insurance plan, a potential policyholder should duly understand the features of their plan. Insurance plans therefore they are beneficial to potential policyholders seeking adequate coverage for their dependents. Foreseeable dependents such as children and spouses and their costs should be considered while asking for life insurance quotes. 

  1. Age:

The premiums paid towards the best term insurance plan in India will still be significantly lesser than other insurance plans in the market. The premium cost of term plans are determined on the basis of factors such as the policyholder’s age, lifestyle and dependents. For example, a younger policyholder will have a low cost premium as they have less liabilities, are healthy and have less dependents; whereas an older policyholder will have higher premium costs as they have liabilities and are more prone to illness.  

Buying a prolonged term insurance plan in one’s mid-twenties is the ideal decision, as the cost of premiums is significantly less and one can alter their terms of coverage once they have major life developments such as a marriage or a child. 

4. Avail Payout Plans:

For the aforementioned sum benefits, there are options available for prospective term insurance plan policyholders to choose their payout method – as the beneficiary may not find it suitable to receive a large influx of money and manage it as per the needs of the family. They may benefit more from the lump sum being converted into a monthly, quarterly, bi-annual, or annual income as per their requirement.  

5. Opt for Reputable Insurance Providers:

As goes for any insurance or investment plan, it should be bought after adequate market research. Since there are a variety insurance providers in the market, which have their own provisions as per their provider; an investor should compare across all plans and providers and go with the most reputable and secure provider. 

The purchase of insurance plans is more or less a simple and intuitive process today with the benefits of online resources as well. To explore further, you can reach out to financial advisors over at Max Life Insurance who will provide assistance through every decision and feature before you commit towards safeguarding your future.  

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