Term plan is the financial assurance plan that offers complete protection and monetary stability to the family in case of any unforeseen events to the insurer. An agreement signed between an individual and the company, which offers the term plan. It consists of terms & conditions, nominee’s name, term amount to various events (accidental death, paralysis, dismemberment and more), premium period and insurance premium.
Most of the customers, who are the sure buyers for the term insurance plan, may understand important points that explain the policy details and dozens of other things before they buy the cover.
We explore here some of the points that one should consider before buying a life insurance policy.
1. Don’t go for a long-term insurance plan
Term plans should be for the least period, say for 20 or 30 yrs. If we consider an example, where a 27-yr old insurer is getting an annual income of 4 Lake and chooses a plan for 30 yrs, then after the age of 57, there won’t be any premium amount to pay as the family members will be financially dependent on the insurer after the retirement age. Usually, one has more responsibilities after the age of 25, and hence, it makes sense to take a big cover. As the age increases, the responsibilities in the family will grow and at the same time, if taking a term plan for 30-40 years, it will be difficult to manage the expenses after the age of retirement, where one is in the situation of no longer remain a provider for his/her family.
2. Buy the primary version term insurance plan
Nowadays, a term plan comes with various benefits. The primary one is to the accidental death, where an amount is fixed for the insurer in case of any unforeseen events. However, there are versions, which offer income for a plan of 10-20 yrs along with the main cover and assures a lump sum at the time of claim. Sometimes, the other options, at the time of claim, need some very specific documents that are neither “better” nor “bad” compared to the base policy. Therefore, it is better to take the base plan that covers the risk of the accidental death in future.
3. ‘Rider insurance’ is a great add-on
Bike accidents are unpredictable and can happen at any time. Rider’s cover is another add-on to a term insurance plan, beneficial for those who ride two-wheelers on a daily basis. Most of the insurance companies add this due to the number of cases of accidents happening today. Riding insurance protects a rider financially in case of unexpected events and brings peace of mind even on the most dangerous roads. Therefore, while evaluating the term insurance, check for these various types of riding insurance that could be beneficial in future.
- Accidental Death Rider Insurance
- Permanent & Partial Disability Insurance
- Loss of Body Parts Insurance
And, take care of your loved ones, their aspirations despite increasing expenses.
4. Don’t hide your well-being status
Try not to hide health information while purchasing a policy. It is often that the customers hide their health status and never disclose it. The term-purchase, which may lead to void-out the term plan at any unforeseen events. There may be chances, where customer underwent operations or surgeries, and if these come in front, the term insurance process can get rejected. The insurance policy is actually a proposal, where it is mandatory to disclose all the details instead of the fact whether the company will accept or reject it.
5. Read the policy papers before signing-in
One of the things a customer should immediately check after receiving the policy papers is about the points and instructions that explained at the time of sales pitch. It is quite common that sales and back-end teams have no point-of-contact, they work as per the process; sales team transfers the lead to back-end team, where preparing & processing of documents done. Therefore, kindly go through each point and make sure about all things mentioned are correct or not.
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