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Determine the Best Term Insurance Plan with 6 Steps

When buying a term insurance policy, you need to compare policies based on the sum assured, benefits provided, flexibility options, risks covered and, most importantly, the premium amount.

By Newsd
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A term insurance plan is a no-risk plan that offers your family the financial security and you the peace of mind that after you are gone, there will be someone who would take care of them. As you use the term insurance calculator, you will be able to see how a low-premium insurance product provides great cover benefits. This is one of the leading reasons why investors add them to their financial portfolio.  

However, with so many policies and insurance providers, choosing the right plan will take a bit of research and use of online tools such as term insurance calculator to calculate the premium you can afford. When you get overwhelmed with all the choices, a term premium calculator will simplify things for you and help you pick the plan that fits not only your budget but also your needs. In this article, we break down the process into simple steps that will help you buy the best policy with ease.  

1. Compare Available Options  

When buying term insurance policy, you need to compare policies based on the sum assured, benefits provided, flexibility options, risks covered and, most importantly, the premium amount. You can get all this information with a click of a button. Once you have found a suitable policy, you can use the term premium calculator to evaluate the term plan quote and see if the plan is affordable in the long run.  

There are many reputed insurance providers, such as Max Life Insurance, that allow you to compare policies online and use the term insurance calculator to make the right investment decision. The idea is to find a policy that is both affordable and provides adequate financial security to your family.  

2. Check the Claim Settlement Ratio  

Once you use the term insurance calculator and find that the insurance policy is available at ridiculously low premiums, then you must tread with caution. This is where you will perform the next important check, and that is Claim Settlement Ratio.  

When you have an idea about the insurance plan but not sure about the insurer, then you must check the claim settlement ratio, which indicates the insurers intention to honour the claim when the time comes. A ratio above 90% indicates the following:  

  • Strong financial creditworthiness 
  • High customer service standards 
  • Information accuracy to the customers 
  • Hassle-free and straightforward claim settlement process

Insurance Regulatory and Development Authority of India share the list of insurance providers with their latest claim settlement ratios for the investors to make the right choice.  

3. Assess the Ease of Increasing Cover  

An ideal term insurance plan coverage is the one that is flexible enough to meet your goals through various stages of life. What is affordable today may not be ten years down the line or when you add more responsibilities.

You should be able to renew your policy and premiums when you want to. Be sure to choose a plan that allows you to include your spouse or expand the coverage when you have children. You can use the online term insurance calculator to recalculate the premium while looking to expand the coverage.

4. Look for Plan with Minimum Premium Rate

The term premium calculator will calculate the premium after assessing your current age and health level. The younger you are, the lower will your premiums be. When calculating the requisite insurance cover, you should strike the perfect balance between adequate sum assured and the premiums you can afford to pay for the duration of the policy. 

5. Understand Your Policy 

Once you have finalized the plan, you must ensure that you understand the policy thoroughly. Some of the things you need to know include:  

  • Policy inclusions and exclusions 
  • Factors that can increase or decrease premium costs 
  • When does the insurer cancel the penalty and if there is a penalty 
  • Can you change the policy nominee? 
  • Insurer rating 

6. Ease of Payments  

When investing in term insurance, don’t forget to take the ease of payment into account. After choosing the right plan with perfect sum assured and insurer with incredible creditworthiness, it is time to pay for the policy. You should be able to choose from multiple payment methods as per your convenience. Choose the payment term such as monthly, quarterly, half-yearly, or annually and then make the payment online using NEFT, IMPS, or your debit/credit card.

Shop around to find the right life insurance policy and use the steps mentioned above to invest in the right plan after careful research and evaluation with the help of a term insurance calculatorApart from securing your loved one from a financial dependency in your absence, it also gives you tax saving benefits under Section 80C, which makes you eligible for deductions up to Rs. 1.5 lakhs per annum from your total income. Even the claim amount received by your beneficiaries is tax-free under Section 10 (10D) of the Income Tax Act. 

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