Things To Consider While Choosing The Correct Term Plan

Want to be around even after you are gone? Get a term plan for your loved ones. India has many companies that have excellent term plans that you can buy both online and offline. To discover which is the best for you, you must make a list of questions that are most pertinent to your family and based on that you will be able to select from the best term plans for your loved ones.

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For those who do not know what a term plan is let me explain to you what it is! 

A term plan is an insurance plan like any other. If the insured person dies due to an accident or any critical illness, the assigned nominee gets an assured sum of money. Term plans don’t pay out on maturity. This is only a risk coverage plan.

Criteria to Determine Best Term Plans for 2019

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The reputation of the company – The most important criteria is to know the reputation of the company you are getting a plan with. If a company has been in existence for a long time and has good reviews online,  it is your safest bet. 

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Claim Settlement Ratio – The claim settlement ratio of any insurance company is nothing but the number of claims that are settled or paid back by the company to the respective insurer’s nominees. The claim settlement ratio or CSR is an important criterion used when buying term plans. Around ten companies in India provide a CSR of around 95% and those companies are the ones you should choose from.  

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Financial Background of the company – Make sure that you find out the financial background of the company i.e. the company’s ability to meet and take care of the short-term and long-term liabilities in case of any crisis in the future.

Another way to select the best company is to see what else they are offering in addition to the claim amount. 

And finally, if a company is offering a low premium, it is a good option as it very competitive out there and if a company is offering a low premium, you should grab the opportunity with both hands.

Now, you’ll also have to determine certain things that include you and your family and that is:

Cover Amount – The most important decision is to decide on the total amount of cover that you wish to opt for. So while deciding the cover, keep in mind the following things:

  • Your age
  • People dependent on you
  • Financial responsibilities
  • Your basic lifestyle and expenses
  • Loans, if any

Policy Period – The next thing that you need to determine is the policy period. This should be based on your age and also the age at which you plan on retiring.

Premium Option – You also need to decide on how and when would you like to pay the premium i.e monthly, quarterly, half-yearly or yearly. This depends on the income that you receive.

I would recommend all my readers to opt for a term plan as early as possible because it provides comprehensive financial protection to the ones you love!

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