A term insurance plan features a basic structure in which policyholders will be provided an assured sum upon their death or provide coverage till 75 years. And the premiums can be made only on an annual basis. However, over the years, new features are being added to the structure.
Presently, people have access to increasing cover plans, limited pay plans, the return of premium plans, and many other options. With the immense options that people have today, it has become complicated to choose the right term insurance plan. And, in this blog, we are helping you choose the right term plan for you.
Determine the Coverage Amount
The first step is not to assess how much money your family will require in case you are met with an untimely death. Calculate your family’s monthly expense and multiply it by 150 (this includes future inflation).
Ensure to add your liabilities such as personal loans, home loans, credit card bills, etc. Consider the amount you have saved up in terms of liquid assets such as mutual funds, FDs, or stocks. Lastly, you should add the expenses of fulfilling life goals and retirement corpus.
Consider the Te
After you have determined the coverage, the next step is to determine the age until you would need it, the tenure should not be too short as the policy will lapse before you fulfill your obligations.
Similarly, the tenure should not be too long as it will result in higher premium charges. To choose the right time to assess by what year your liquid net worth after subtracting your liabilities is greater than the term plan cover. The year these two coincide is the time period till which you should buy the term plan.
Disclose Your Correct Information
Do not conceal any information to save paying extra premiums. This is a breach of contract, and your claim may get rejected in the future. Be clear about your health issues and family health history.
What happens when you mention the wrong information and the insurance company discovers the cause of death is a medical condition that is not mentioned in the form?
In such cases, the insurance company has the right to reject your claim while invalidating the term policy. Therefore, make sure you verify all the information before submitting it to the insurance provider.
Ensure to Add The Name of The Nominee
When filling the proposal form, ensure that you do not miss out on the nominee’s name. A nominee can be your spouse or children to whom you want to pass the insurance benefits. When a term plan is taken under the Married Women Protection Act, the assured sum is passed onto the wide and children.
Term life insurance is one of the best investments to include in the financial portfolio. With the financial protection that this policy offers, you can ensure that your family accomplishes its goal without any challenge. You can check out Guaranteed Future Plan as well.
When you are buying a term insurance plan, make sure you choose a reputable insurer. And, also carefully assess every aspect of the plan carefully before making the final decision.