A good insurance policy will ensure financial safety in time of need. Despite this, the number of insurance policies available in the market is large, and can be difficult to navigate to find the right policy for you, says Resclaim, a company that focuses on appealing rejected insurance claims.
Keep reading if you are also looking to purchase life insurance and don’t know where to begin. Here you will find every detail involving planning, selection, and purchasing a term plan insurance.
Term Plan Insurance
A term plan insurance is an insurance policy that provides life cover for a fixed term. Most of the features of every term plan insurance are according to the term life insurance guidelines.
A person can choose such insurance plans if they are the only earning member of their family. If they pass away during the term, the family or nominee will receive the assured sum. A generous assured sum of the policy will provide financial support to the family in the absence of the insured person.
Apart from the sizable financial support, there are other features that make term plan insurance popular. Given below are some of the main features of a term insurance plan.
Pocket-friendly: Even if you choose a high assured sum, the premium amounts of term plan insurance are always low. As opposed to major types of insurances, term insurance will have pocket-friendly premium amounts.
Money-back Policy: Some term insurance plans have a money-back policy if they are ULIP insurance plans (more details). It means if the insured person is alive at term-end, they will get back the entire sum paid as premiums, according to Forbes. And in case of the insurer’s demise mid-term, the nominee will get the premiums paid until then.
Multiple Options to Receive Assured Sum: If the person is alive at term-end, they can choose how to get the remaining money back. They can choose if they want a one-time payment or a monthly payment for the rest of their lives. They can even choose a combination of these two. In that case, they will receive a substantial percentage as a lump sum. And the remaining sum they will receive as monthly payments.
Tax Relaxations: There are several tax relaxations involved with term insurance. In India, you can claim an even higher relaxation if the insured person is a senior citizen or a super senior citizen.
Critical Medical Cover: Some term insurance plans also have health insurance features. But they are only valid for fatal diseases.
Knowing all these features will help you plan your requirements from a term plan insurance. The only major thing you need to consider before the selection process is the required assured sum.
You can easily know this from the annual expenses of your family. Considering the expenses of a few years and other unforeseen expenses, you can find an estimate on your requirement. If you can’t decide on your estimate, choose an assured sum that can last more than 10 years of annual expenses.
Selection of A Term Plan Insurance
The next stage is the selection stage. You will have to select a suitable term plan insurance that can provide your required assured sum at this stage. There are different methods in plan selection. You can choose any comfortable mode of selection.
The most conventional method of term plan insurance selection is by a referral. These referrals can be through word-of-mouth, social media, or advice from friends and family. But there are limitations on the authenticity of the information received via this mode.
Consulting agents is an authentic way to gain knowledge of term insurance plans and their premiums. But, always make sure that they are authorised insurance agents before taking advice or making payments.
Online Term Plan Calculator
An online term plan calculator is the most advanced and modern plan selection method. It is convenient, free, and provides instant results. All major insurance providers have a term plan insurance calculator on their official websites. You can log in to the website to find a suitable policy.
The calculator will need a few personal information to process and find suitable insurance plans. Given below is a general outline of procedures of every term plan insurance calculator.
- Input personal information.
- Select the required assured sum.
- Choose a suitable policy term, premium term, and premium interval.
- Choose any extra add-ons.
- Click on calculate.
You will get the exact premium amount for the selected options by clicking on calculate. If the resultant premium amount and plan are affordable, you can select that particular plan. Or, else, you can modify the details for a more personalised insurance plan.
The final stage of buying term plan insurance is the actual premium payment. Before purchasing, there are a few formalities like document submission, opted policy details submission, verification and approval. You can process payment only after your documents are in order. And after purchasing the term plan insurance, the insurance provider will mail you the policy papers and receipts.