Most term plans offer a variety of solutions tailored to fit a variety of situations. Here are a few steps to help you identify the right Term Insurance Plan.
I am looking for the old fashioned, no-frill insurance-If you want plain vanilla insurance, choose a plan with single premium options that offers your family the assured lump sum amount after your death. The policy's sum assured should be at least 15-20 times your current annual income.
- Accident cover would be a plus: If you are willing to go a little bit extra, get Accidental Death Benefit. Accident cover can add a large benefit at a low cost and can protect you against a range of uncertainties such as road accidents, by offering stretched-out benefits to your family in addition to lump sum payment.
3 Contrary to what you may have heard, health Insurance only compensates you for hospitalisation expenses based on actual s; it doesn't secure you against major illnesses which cost a lot to deal with as soon as they're diagnosed. Thus, if you have a family medical history of critical diseases such as Cancer, it's important you get financial protection in the form of a Critical Illness rider on a term plan.
When spoiled for choice, we are often drawn to buy a term plan that has the lowest premium. But that is not the right criteria to buy a product. While it is prudent to opt for a product that is competitively priced, one must remember that cheap does not mean best.
Since we are talking money, it is practical to guard your savings as your retirement age draws closer. If you think your healthy life will take you safely across the shore, look for a plan that will allow you adjust your premiums as you age. If you are a young and unmarried person opting for old fashioned life insurance, it is always advisable to pick a term plan that also allows you to increase your coverage when your spouse or your child come into your life. Similarly, there the ideal plan would allow you to lower your premium when your dependent cease to depend on you.
Fundamentally, every insurance transaction is a promise-that your family will be secure and protected no matter what happens. The insurer you choose must have the credibility and integrity to fulfill this promise. Choose a plan that comes from highly credible company. The first way to identify this, is to have a look at the Claim Settlement Ratio, as announced by IRDAI. However, since the Insurance Act prohibits denial of claims after three years except in cases of fraud involving material facts .. it is advisable to look beyond this number and also consider factors such as corporate governance record, solvency ratio, assets under management (AUM) and instances of violations of IRDAI norms.