How Can I Select the Best Term Insurance Plan

Published by: nidhi on 13th Jul 2017 | View all blogs by nidhi

Term insurance plans provide you financial security for a selected period of time. In the event of your death, the assured amount of money is paid to your nominee along with some benefits. These plans are specially created to give financial protection, which your family needs in times of emergencies.

Analysis

Term insurance plans are critical investments for life. It gives you financial protection and is an affordable plan. When you choose a term insurance plan you have to consider the following things:

● Your age
● Family
● Income
● The number of dependents
● Liabilities
● Duration of the plan

There are more than hundred term plans available in the market, hence you should choose a product which helps your family when you are no longer there to help them financially.

Online vs Offline

Nowadays insurance companies have both online and offline term insurance plans. Take a look at the following pointers that will assist you in making the right decision between online and offline term insurance:-

1. Premium

● The premiums for online plans are 40% cheaper than offline plans.
● if a plan is bought offine, for every premium, a certain amount of money goes to the broker.

2. Benefits

● With offline plans the customers usually have a lower sum assured because of the high premiums to be paid.
● But with online plans, you can get higher sum assured that too for a lower premium because of the low mortality risk and reduced service cost.

Time Required for Cover

The duration of your term insurance plan is as important as the amount of cover. Normally a term insurance policy covers a person till the age he works. So your policy duration must be the difference between your retirement age and current age. The premium amounts increases with age, hence it is advisable that you buy term plans when you are young so that premiums are less expensive.

Considering Inflation as a Factor

Inflation factors are the rise in prices of commodities over time, which causes the value of rupees to drop. For instance, if the inflation rate is 5%, the value of 60 lakhs will approximately drop to 38 lakhs after 10 years.

To overcome this problem many insurance companies have plans that offer 5-10% hike every year in the covering amounts. This gives you increased income as well as protection against inflation rates.

Claim Settlement Ratio

According to the insurance and regulatory development authority (IRDA) guidelines, a claim settlement ratio declared by any company is a mix of both online and offline insurance plans. So make sure to consider the claim ratio of each company before buying plans and be transparent about your age, income and other factors while filling the application form.

If you claim your settlement within the first 2 years, the insurers have duration of 6 months to settle the claim. If you claim settlement for a policy that is older than 2 years the insurers have duration of 90 days within which the settlement has to take place.

Popular Term Insurance Plan

In India, the following are the top 5 popular term insurance plans:-
● ICICI Prudential iProtect smart
● HDFC life click2Protect plus
● Max life online term plan plus
● Argon life iTerm plan
● PNB MetLife Mera term plan

Coverfox as an Online Broking Firm or Buying Term Plan

Here is why Coverfox is ideal for all customers:-
● With Coverfox you can choose between a monthly or a lump amount payout.
● You can avail tax benefit on base premium.
● It has add-ons offers, which can cover critical illness and accidental death.
● It gives you knowledge of all the information needed and unbiased comparisons.
● It has tie-ups with over 25 insurance companies.
● With Coverfox you can always find a plan that is best suited for your needs.

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