It is said that safety
is the cheapest and the most convenient form of an insurance policy. A life
insurance policy plays a vital role in your family’s well-being. A term
insurance policy does not offer you any cashvalue benefit, but in case of any
unfortunate event of death, the term policy offers the full sum assured to the
beneficiaries, which is considerably high as compared to other life insurance
plans. Source Source 12 Here are some facts that everyone needs to consider
before opting for a life insurance policy.
Right time to buy term
insurance
You might think of
purchasing a term policy after a few years as some money could be accrued
during the period. However, the fact is, as the age increases, the premium
amount of the term insurance plans also increases. Furthermore, you are more
exposed to illnesses with increasing age. This is why earlier the purchase
happens, better the premium amount is.
Use the term premium
calculator
While finalising the
plan, using the term insurance calculator is always beneficial in order to
determine the right quote. The insurance companies and aggregators offer term
insurance calculators on their sites that help in analysing which plan suits
you better.
Don’t judge the plan by
price
If you get to see a
plan worth Rs 20 per day, and another one at Rs 6,500 per annum, ultimately,
the lower price gets more attention. But going for the first one could cost
more than the per annum plan. It is a marketing strategy which leads to more
confusion and results in unnecessary spends. Many times, the amount shown while
getting quotes increases after medical tests. Don’t step back in such
situations. The company always checks all the facts and determines the premium.
This certainly reduces the chances of last moment claim rejection
Choose a rider if you
need it
Riders are available to
provide additional protection to the term insurance policy. One can choose a
suitable rider by analysing needs. If you are a frequent traveller, it is
better to go with the accidental death benefit rider. However, understand that
buying riders casually may increase the premium unnecessarily; so choose them
wisely.
Disclose all the
information
Always disclose
information about any unhealthy habits to the insurance company. Many people
try to hide smoking/drinking habits in order to lower down premiums. The
premium calculation is entirely based on the critical information you provide.
Hiding facts is nothing but breaching the contract, which may lead to claim
rejection. Usually, the claim rejection ratio in the case of term insurance
plans is very low. Disclosing family health history is also essential. Many
diseases are hereditary, where you are also likely to adopt the same. The
company considers probabilities and determines the premium amount.
Get adequate life
coverage
Usually, term insurance
offers the cover of Rs 1 crore, which seems to be a considerable amount. But
bearing in mind the inflation and other aspects, choose the minimum cover of
around Rs 1.5 crore and so on. The simple calculation is that the cover should
be equal to 250 times the annual expenses if the tenure is 25 years. Complete
all the essentials while submitting insurance application and filling out the
form. Putting nominee name carefully is the most important. Making any mistake
in the entire process may lead to claim rejection.
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