How to Choose Best Term Insurances – Factors to be considered
Best Term Insurances: this article is all the about giving the knowledge about the best of the best term insurances available in the market and from that what would be the best for you. Term insurance is such an insurance which has to be taken for a particular term or period of time. If the insured person dies during the said period than the sum insured would be provided by the insurance company to the family members of the insured persons.
Best Term Insurances
Factors involved while taking decision for the best term insurance:
1. The first and the foremost factor which comes while deciding the term insurance to be taken is the Claim Settlement % by each of the companies. This is important because if the claim amount is very high but if the company history says that it is unable to pay the claims then it would be of no use. The best companies coming in the list of high claim settlement of which the highest is of LIC, which consists of around 97%, then comes the ICICI, HDFC, SBI etc.
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2. The second factor comes is the solvency factor. The financial position of the insurance should be very much powerful as there may be many claims which needs to be paid off in case of low premiums also. Solvency Ratio here means that Size of the Capital involved in the business divided by the total risk involved in the business.
- The higher the solvency ratio, the better the organization is. The solvency ratio should be at least 1.5 as per the IRDA norms. Here LIC comes the last with nearly the minimum requirements. But the important thing to note is that not only solvency is to be checked but also the reputation would decide its business. So it is always advisable to be associated with those who have more credential reputation. For Example, LIC – It is having very less Solvency rate but reputation of the LIC is the best and so does the people trust the organization and invest in such schemes.
3. Policy Price:
Now comes the factor which would be called as monetary factor which helps in deciding the plan to be adopted. The price matters but the ultimate decision of what plan to choose should not be based on price. There are various other factors which needs to be taken care of along with the price.
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4. Time taken for claim settlement:
IRDA every year provides the report on all the matters which are necessary for the decision making, in which it distributes the time taken into 3 parts.
- Less than or Equal to 30 Days
- 31 to 90 Days
- More than 90 Days
The lesser the time taken for settlement, the better the organization it is. In this list LIC tops again within majority of the claims being settled within 30 days.
5. Additional Benefits:
There are many other benefits nowadays being given by the insurance companies as a promotion activity which we should take care that along with life cover, they are also offering accidental death cover, disability cover, illness cover, etc. which should not form part of the prominent factor but as additional factor.
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6. After Sales Service –
The next comes that how the insurance companies are providing the after sales services which should be confirmed by contacting the people already in that policy.