Term insurance is something we do not think about often but it is one of the most important things to buy currently. And if you have a family with individuals dependent on you, there should not be any hesitations about purchasing it. Especially in a situation where so many people have already lost their lives across the world because of COVID-19, it is prudent to not take any chance. If you are still not sure if you should buy term insurance plan, the 7 key reasons should nudge you in the right direction:
- Low premium with high sum assured
- Simple as compared to other plans
- Easy to understand
- Secures your family’s future
- High coverage
- Riders for additional benefits
- Competitive pricing
As you buy a term insurance plan, your family can take care of the financial obligations when you are not there, within the tenure of the plan. However, while purchasing a term insurance plan, many people get confused and end up buying one that is not the right one for them. If this is your first time buying a term insurance plan, here are some of the things that you must consider.
Disclose all the information, correctly
You absolutely should not lie to your insurer about any details that you are going to fill in the form. And if it is especially about your smoking and drinking habits, then you must disclose it. If you do not inform your insurer about your smoking and drinking habits and later it is found by them, the insurance claim might get rejected. Also, if you have any kind of health issue, it must be informed to the insurer. To sum it up, whatever information you put in the papers should be correct and there should not be any information that you hide from your insurer.
Get sufficient insurance cover
If you think that 50-70 lac will help your family after 20 years from now, you are mistaken. While you choose an insurance cover, you need to consider the inflation rates, your kids’ education, their wedding expenses, etc. Before you choose any random number like 75 lac or even 1 Crore, you need to think through all the expenses that your family would need to bear in your absence.
Do not forget to add the name of the beneficiary
As you fill-up the insurance proposal form, you must put the name of your beneficiary. The beneficiary can be anybody; your wife, your husband, and even your children. However, you need to choose a family member who has an idea of handling expenses and understanding finances. And if you are a man who wants to ensure that the funds are going to your wife and children, you can take the term plan under the MWP Act (Married Women Protection Act). This will ensure that the benefit of the policy will be availed of only by your wife or children.
Adding riders help in getting additional benefits in a term insurance policy. The riders give supplementary coverage.There are several types of riders that you can choose from, such as Accidental Death Benefit Rider, Critical Illness Riders, Terminal Illness Riders, Income Benefit Rider, and Waiver of Premium Rider.These riders help you get a more comprehensive insurance policy that protects your family from all possibilities no matter how distant they may seem.
Discloser of existing policies
You may take multiple term insurance policies; however, you must disclose these details to your insurer. Before you purchase a term insurance plan, you must disclose all the current policies you have, including the name of the insurance company, the policy number, and the sum assured. If you fail to disclose the information about your existing policies, it may later lead to the rejection of policy claims.
Keeping these few factors in mind will allow you to make an informed decision and choose the right policy and coverage according to your financial needs. There are many insurance providers and most offer similar plans with minor but important variations. You can go to the IIFL website to know more about these policies and compare them easily to choose the one that fits your needs. You can also find out important information regarding the insurance providers such as the claim settlement ratio which helps in getting a good idea about the experience your family members will be having while claiming the amount in case of your untimely demise. Taking a robust term insurance plan is the need of the hour as most of the major insurance providers and plans cover the COVID-related deaths, which have affected many families in recent times who have lost their sole breadwinner. So go ahead and secure your family’s future.