Term insurance is a great option for people who want to ensure their family’s financial protection in case of an unfortunate event. However, a beginner might find it difficult to select the right term insurance.
In this article, we will discuss a few things that beginners should keep in mind while purchasing a term insurance plan that can provide a sum assured of Rs 1 crore.
Term insurance is a very common type of policy, which offers coverage for a specific number of years. It can provide cover against various illnesses, accidents and death. Term insurance is a preferred option for many people as it is easy to purchase. However, buying a term insurance for the first time can be confusing. There are a few things that you need to consider before buying term insurance. One of those things is the cover amount.
Before purchasing a policy, it is important to decide the cover amount. Keep in mind that the amount of coverage needs to be sufficient to cover the financial burden that may arise due to unfortunate circumstances like death or disability. For instance, if a person wants his/her family to pay off an expensive mortgage in case of his/her untimely demise, then it is important to get sufficient coverage to make sure that the family does not end up in financial ruin. A lot of people opt for Rs 1 crore cover amount because the funds can help in paying off any debts and meeting future expenses. Furthermore, buying term insurance has become very easy. A person can buy an online term plan quickly.
Apart from the cover amount, there are a few other things that a beginner needs to keep in mind, such as-
Policy tenure refers to the number of years that the term insurance plan will be in force. It is stated in the policy document. Generally, people look for long-term coverage and opt for a policy that has a tenure between 10 to 20 years. It is wise for people to select a tenure that is equal to their savings goal. For example, if a person is planning to save for his/her child’s education, then he/she should go for a policy that can provide cover until the child’s education is finished.
Assess Future Needs
While purchasing term insurance, the individual must ensure the sum assured is sufficient to pay for any financial liabilities and meet future goals. Furthermore, he/she should determine future expenses while calculating the sum assured.
Select a Reputed Insurance Provider
Selecting a reputed insurance company is important. An individual must check a few things such as the claim settlement ratio of the insurance provider. The claim settlement ratio provides information about the number of claims settled by the insurance company against the number of claims raised. Another important thing to check is the reputation of the company and the grievance ratio. By visiting this site you can know this about insurance plans.
Get Term Insurance to Provide Financial Protection
It might get difficult for beginners to select the right term insurance. However, purchasing the right term insurance is important because it can help people provide financial protection to their family. Therefore, keep the aforementioned points in mind while choosing a term insurance plan.