In a life full of uncertainties, a term insurance policy works as a financial cushion for the safety and well-being of your loved ones in the event of your unfortunate demise. These plans help your family with a fixed monthly income to manage the day-to-day expenses.
Tips to Choose Right Term Plan for You
However, when it comes to choosing a reliable term insurance plan, you’ll find the process extremely overwhelming as there are various companies in the market providing this financial instrument.
Too many term insurance plans making you feel confused? Here’s how to choose the right one
Moreover, there are various factors that determine the efficiency of a term plan. But if you don’t even know “what is a term plan” and don’t have adequate knowledge about this plan, you may find it hard to choose a plan that offers you the maximum benefits.
To make the process easier, this article will list the factors that you must consider before choosing a term insurance plan to make an informed purchase decision. Additionally, you’ll also know about some of the most prominent term plans available in the market as of now.
Keep your life stage, dependents, and cover in mind
The number of family members dependent on you for fulfilling their financial requirements will vary as you age. The financial responsibilities of a person with a spouse and children are far different than someone who lives alone. That’s why it’s suggested to keep your current life stage and the number of dependents in mind while determining the cover amount of your policy. Moreover, as you progress through life, you need to make changes in the plan accordingly as per the changes in your financial responsibilities.
Determine your family’s current lifestyle cost
After assessing the aforementioned factors, you also need to determine the cost that you incur with the current standards of living of your family. This will allow you to choose a term plan that helps your family sustain the same type of lifestyle in the event of your demise.
While considering this factor, you also need to keep the current rate of inflation in mind. Once you assess the required amounts of funds for an optimal lifestyle, you can choose an adequate cover for your preferred term plan accordingly.
Understand Your Family’s Financial Needs
If you’re the only breadwinner of your family, the current salary you gain might not be sufficient enough in the future. Therefore, instead of focusing on the amount of your salary while choosing a term plan, you should consider understanding the financial requirements of your dependents.
You need to keep both the current and future monetary needs along with the rate of inflation in mind to come up with the ideal preferences of your policy. This will make it easier for you to shortlist various plans that resonate well with the financial needs and goals of your family.
Address your current liabilities
Usually, the primary earning member of the family has a burden of liabilities and mortgages like personal loans, car loans, home loans, and so on. Due to these financial burdens, you may find it hard to pay your premiums.
While selecting your term plan, make sure you choose an adequate coverage that allows your family to repay your existing liabilities in your absence. Moreover, make sure to be mindful of your choices of add-ons as they can have a gradual impact on your premium rates.
Aim for a reliable company
As term plans are one of the most popular investment schemes available in India, there are numerous companies that offer them at varying rates. However, not all of them would prove to be beneficial for you.
While choosing a company, make sure you have a look at their claim settlement ratio. In case all your shortlisted companies have a higher claim settlement ratio, consider looking at other factors like the company’s credibility and goodwill.
Best Term Insurance Plans Available in India
1. Aviva Life Shield Advantage Plan
The Aviva Life Shield Advantage is a non-participating and non-linked term insurance plan that offers you complete returns on your investments without any concession. It is a great plan to secure the future of your loved ones financially in case any unforeseen events take place.
In addition to the death benefit offered by this plan, you can also enjoy a return of premiums in case you survive throughout the tenure of this policy. This ensures that your funds are completely secure, regardless of the situation.
2. Bajaj Allianz eTouch Online Term Plan
The Bajaj Allianz eTouch online term insurance policy is one of the most popular financial instruments offered by the company. At very nominal premium rates, the plan offers great financial benefits to your family and loved ones.
It also allows you to choose from four different cover options, and the returns from this plan are also eligible for tax deduction and benefits under section 80C and 10D of the Income Tax Act of India. The process of purchasing this plan is extremely easy and can be done from the comfort of your home.
