Tips and Tricks for Choosing the Best Term Insurance Plan in India
Natural calamities, viral epidemics, the unexpected diagnosis of a serious illness, premature death and so many other forms of emergency indicate the fragility of human lives. And even if we hardly worry about what happens to us, the concern for our loved ones never leaves us.
Want to know what you can do for your family members to secure their future? Buy it best term insurance plan in india to give them financial security and a good life in your absence.
What is term insurance?
A term insurance plan is a signed agreement between the insurer and the insured person for a fixed term. The policy taken out by the policyholder makes the insurer legally bound to pay an agreed payment in the event of a contingency. The policyholder designates the beneficiary who is likely to benefit from the death guarantee.
You may be wondering if the payout initiated on the death of the insured makes a term policy as effective as a accident insurance policy. Well, it’s not.
This is for the following reasons:
- An accident insurance policy only provides coverage in the event of the death of the policyholder as a result of an accident. However, a term policy provides coverage regardless of the cause of death except for suicide.
- The accidental policy only covers loss or damage due to the accident. But the best term insurance plan in India can cover accidental death, critical illness and disability. You have to pay extra premium for these add-ons.
- Although partial disabilities are not covered by term life insurance policies, accidental coverage will also provide protection in the event of partial disability.
Types of term life insurance
Although there are several types to choose from, the best term insurance plan in India for you will be depend on your requirements. Here are the options you can choose from:
Term Insurance Level:
It is one of the most popular forms of term insurance policies. It is mainly chosen by young families who must protect themselves against debt in the event of the death of the main breadwinner. One of the main distinctions of level term insurance is that it is sold for terms/durations which generally vary between 5 and 30 years. Neither the premium nor the life cover can change once the policy is issued. Since the policy offers limited term coverage, its premium rates are slightly more affordable.
Decreasing term insurance:
It is the best term insurance plan in India for those who want to cover their active loans and other financial obligations. Also called DTA insurance, it allows the reduction of the benefit monthly or annually. It is because of this feature that it is slightly cheaper than level term insurance. It is also chosen by small business owners who need debt financing.
Annually renewable term insurance:
This type is ideal for short-term life insurance. The policy offers similar coverage as other term plans, but must be activated each year with a slightly higher premium rate.
Now that you reasonably understand the types of term policies, choose the best term insurance plan for yourself in India and proceed with the purchase. Here are some tips that can help you.
Tips for choosing a term insurance plan
1. Buy from a reputable insurance provider:
Several insurers offer accident insurance policies, critical illness coverage or a term insurance plan at a cheaper rate. But it is wise not to be tempted by affordability and buy the policy from an organization known for its fair claims.
2. Choose the right term and coverage:
This needs to be sorted out before moving forward with the policy. Ideally, you should take the coverage for 65 to 70 years, and the amount of coverage must necessarily take inflation into account. A coverage amount that can help your family maintain a good lifestyle will be the best choice.
3. Select add-ons to maximize benefits:
The best term insurance plan in India should give you options to add riders/top-ups like accidental death cover, disability cover, critical illness cover, etc. You should know that these add-ons are convenient and expand your range of benefits.
4. Hedging should consider financial liabilities:
If you have liabilities such as home loans, auto loans, and the like, you should consider term policies that will cover active debts in your absence.
Term insurance, the need of the hour, is especially important for the primary breadwinner. While most insurers claim to be the best in the market, the Insurance Regulatory and Development Authority of India (IRDAI) has set some regulations (Regulations (irdai.gov.in) that insurers must respect in the interests of policyholders.
So, make sure to opt for the one that follows the policies designed by the government authority.