How to Choose Best Term Insurances – Factors to be considered
Best Term Insurances: this article is all about giving the best of the best-term insurances available in the market and what would be the best for you. Term insurance is such insurance that has to be taken for a particular term or period. If the insured person dies during the said period, then the sum insured would be provided by the insurance company to the insured persons’ family members.
Best Term Insurances
Factors involved while taking decision for the best term insurance:
1. The first and foremost factor that comes while deciding the term insurance 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 it is unable to pay the claims, it would be of no use. The best companies coming in the list of high claim settlements of which the highest is of LIC, which consists of around 97%, then comes to the ICICI, HDFC, SBI, etc.
Must Read – Health Benefits along with Fixed Deposit Account
2. The second factor comes from the solvency factor. The insurance’s financial position should be very much powerful as there may be many claims that need to be paid off in case of low premiums also. Solvency Ratio here means that the Size of the Capital involved in the business is 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 solvency is to be checked, and 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 a very less Solvency rate, but the 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 a monetary factor, which helps decide 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 that need to be taken care of along with the price.
Must Read – Travel Insurance
4. Time taken for claim settlement:
IRDA every year provides the report on all the necessary matters for the decision-making, in which it distributes the time taken into three parts.
- Less than or Equal to 30 Days
- 31 to 90 Days
- More than 90 Days
The lesser the time is taken for settlement, the better the organization it is. In this list, LIC tops again within the 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 promotional 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 an additional factor.
Must Read – Life Insurance Policy
6. After Sales Service –
The next comes how the insurance companies provide the after-sales services, which should be confirmed by contacting the people already in that policy.