A term insurance plan promises you something, which no other investment avenue does – a high-risk cover at very low premium payments. The plan pays a lump sum benefit in case of death and thus aims to replace your income for your family in your absence. As important as a term plan is, it is always recommended to buy a plan after careful consideration. This is not a plan to buy on the fly. You should take special care of two things. Do you know what they are?
Let’s take a look:
- The coverage
Since a term plan helps in income replacement, your coverage should be sufficient. Your family should get a decent amount in case of your death so that they face no financial strains. Moreover, your plan should have all the possible additional coverage features (riders) which would render a comprehensive protection. So, you should calculate and select the optimal level of the Sum Assured and also choose applicable riders in your term insurance plan.
- The premium
While a comprehensive coverage is essential, you cannot ignore the fact that the charged premium should be affordable too. Moreover, the premium should be the lowest so that you get the best deal on your term insurance plan.
To ensure you get a better premium and comprehensive cover, there is only one thing you can do – compare term insurance plans. By comparing you can find the best plan, which not only allows the best coverage, but also has the best premium rate. Do you know how to compare?
The comparison process is quite simple and the following tips would allow you to compare term insurance plans easily.
- Go online and choose an online broker
You don’t have to sweat yourself in comparing term insurance plans by visiting or meeting agents. The online marketplace simplifies the whole comparison process. You just need to enter your details and the online medium would show you the available term plans, their coverage features and their respective premium rates.
Though you can compare either through an online insurance aggregator or an online broker, the latter is better. Online brokers render expert advice and help you to choose the best plan according to your requirements. Coverfox is an online broker that not only renders you personalized advice it also helps you at the time of claims.
- Use the online calculator to determine your ideal Sum Assured and find the plans offering it
Online websites also allow online term insurance calculators. These calculators help you calculate the Sum Assured which would be suitable for you along with the respective premium rates. For using the calculator, you have to enter your name, age, income and tobacco usage. These factors then help you to calculate the Sum Assured and premium. You can then see plans, which offer the optimal level of Sum Assured to start comparing between them.
- Look for the coverage features and plan benefits
To compare, look at the coverage extended by the available plans. Though term plans provide coverage against premature death, there are some plans which provide additional inbuilt benefits. For instance, some plans have an added accidental death benefit rider, which pays an additional Sum Assured in case of accidental death or disability. Similarly, some plans have an inbuilt terminal illness benefit where a lump sum benefit is paid if the insured is diagnosed with any terminal illness. Compare these features and choose a plan offering these inbuilt benefits.
Another thing to compare is the plan benefit structure. Some plans pay a lump sum benefit while others pay monthly incomes. There are other plans which pay a combination of lump sum and monthly payouts. Determine which payout suits you the best and then compare plans on their benefit structure.
- Compare premiums vis-à-vis coverage
The most common mistake which most of you make is comparing only premiums without looking at the coverage offered. Always compare the premiums along with the coverage of the plan.
If you follow these steps, you can compare available term insurance plans and choose a plan which has the best coverage. Were the steps difficult?
They weren’t. The steps are easy and if followed would help you get the best term insurance plan. Isn’t getting the best what you want?