The process of choosing a policy can be a daunting and tedious process, but with the abundance of measurement metrics available in the market today, one can streamline the process and determine the features of an insurance plan that are non-negotiable for their lifestyle. This helps to secure not only one’s own future but also protects those who are dependent on the policyholder from financial distress.
A term insurance plan is made effectively to cover the needs of the insured and their dependents through an assured benefit sum in the event of the policyholder’s demise. A basic term insurance policy in India is considered to be one of the most affordable means of securing one’s future where premiums are low, and one can customize their coverage and pay-out methods as per their convenience. But despite that, in 2019, India’s life insurance penetration levels were only at a low of 2.82 percent.
Since there is a wealth of options when it comes to term insurance plans, one can customize and compare across different policies to choose the one best suited for their needs. The foremost thing a prospective policyholder must remember is to identify the incentives and long-term benefits of any term insurance plan before making their choice. Let us read through the five top secrets to choose the best term insurance policy:
1. Identify Human Life Value:
The cumulative figure that one gets when they calculate their net salary and their debt liabilities as a total is called the human life value of a policyholder. It is an essential figure to calculate, as it helps navigate a policyholder through their assets and loans and gives them better visibility in regards to their financial choices. This figure can be used at the time of choosing a policy, as well as it can be used as a metric to compare the long-term pay-out one may receive at the end of their policy term.
Hence, one must choose a policy with a premium frequency that not only covers but also exceeds the human life value of the policyholder. Since the goal is to secure the future of the beneficiaries as well, one must take their financial obligations into consideration as well.
2. Reduce Costs:
Term plans are known for their affordability and simplicity. It is a simple insurance instrument that has premiums that can go as low as Rs 600 a month and are accessible to people from all income brackets. However, one can supplement the benefits of these plans by availing of a plan that has a combined premium and tenure benefit, which often comes with an added reduction on premium costs.
Since there are many customizable plans at the insurance provider’s disposal, one can go for a plan that doesn’t compromise on coverage but is a cheaper investment solution than the existing standard plan. One can also apply for term insurance plans online on the insurance provider’s website, which often has offers and supplementary discounts rather than the conventional consultation.
3. Boost Coverage:
An added benefit of investing in a term investment plan is the possibility of helping to secure the future of those who will be dependent on the policyholder. Since a singular term plan cannot be extended out to the dependents, it can, however, be boosted to add more coverage and an increased pay-out sum in the event of the policyholder’s death.
Many insurance providers offer special features where there are extra benefits and coverage added to the existing plan at important dependent-oriented moments in the policyholder’s life, such as getting married or having a child. The coverage provided when the policyholder gets married is boosted by 50% and 25% on account of the birth of a child. These supplemented costs are covered by a higher premium to be paid by the policyholder’.
4. Add Riders:
A term insurance plan with its variations and abundance of options can be an ideal choice for people who wish to have robust financial visibility for all unforeseen situations that may arise in their life. Therefore, term insurance plans offer additional riders and benefits that can help policyholders prepare for situations that are not limited to death.
One can add riders for Income, Waived Premiums, Disability, Accidental Death, or even Critical Illness in their existing term insurance plan. The cost of these riders added to the basal premium cost; hence one should choose after adequate deliberation.
5. Use Online Resources:
Along with several combinations and types of term investment plans available for a policyholder to choose from, there are many online resources such as a term plan calculator that are evolving with measurement metrics to help compare plans across insurance providers and their best customizable versions.
A person can use these resources by adding their requirements to get an approximate idea of the plan that is the most suitable for a certain income and lifestyle. One can also choose to directly compare and purchase plans on an insurance provider’s website as they often have incentives and offers for direct website purchases and consultations.
Combining resources such as a term plan calculator and identifying personal assets and liabilities can be integral metrics to help someone choose their best term investment plan. Since the end goal is to achieve complete coverage and protection from any financial distress, one must choose carefully, taking all factors into consideration.
To help you make an informed choice, you can consult financial advisors at Max Life Insurance to compare term insurance plans or use their term plan calculator for estimates. With your best interests at heart, Max Life Insurance will guide you to choose a plan that fulfils all financial obligations while mitigating all your anxieties about the uncertain future and how to prepare for it.