Simplify Your Term Insurance Purchase with 5 Tips

It is no less than an achievement to maintain your financial health today. Among several responsibilities in life and growing expenses, it can be exceptionally challenging to grow your savings. In such a situation, when you struggle to save more and spend less, establishing an emergency fund has become even more crucial. A solution to this problem is to buy term plan online and avoid any unnecessary complications.

Simplify Your Term Insurance Purchase with 5 Tips
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Firstly, let’s understand what is term plan and how it works. 

Term policy in India is one of the most straightforward insurance plans that can offer long-term security to a family. Not only that, but it is also a relatively affordable option when it comes to insurance plans. You can buy term plan online today with just a few clicks and create a financial shield around your loved ones for an extended period. 

However, you might end up facing the problem of an overload of options when you buy term plan online. Since the financial demands are evolving rapidly, the market is becoming increasingly competitive with innovative policies. Now that you know what is term plan, as a policy buyer, you can take advantage of the user-focused market by following these tips carefully and buy term plan online: 

1. Buy A Term Plan Early For Affordable And Longer Coverage

When you begin earning, insurance is probably not the first thing on your mind. Nonetheless, the advantages of buying a term policy in India in the early stages of life is worth considering. It enables you to get comprehensive coverage at lower rates than buying it at a later stage in life. 

Moreover, insurance providers calculate the risk of covering your life by assessing your medical condition when you buy term plan online. When you are younger, you are less likely to have health issues that require extensive coverage, meaning lower premium rates. So, make sure you buy term plan online at the right time in life, considering the advantages carefully. 

2. Make Sure You Are Realistic When Deciding The Sum Assured

It is a common mistake among policy buyers to opt for an unsatisfactory sum assured when they buy term plan online. In some cases, the lower premium rates with an underestimated cover can sway your decision in the wrong direction. It is crucial to remember that the sum assured is the death benefit that your family will receive in case of your untimely demise. 

If you choose a lower sum assured to reduce your premium liabilities in the present, it can lead to financial distress for your family in a time of need. At the same time, make sure not to overestimate the cover amount when you buy term plan online. It can cause an additional burden on your pocket and affect your budget. 

You can use insurance calculators on the insurer’s website to avoid any disappointments with the sum assured when you buy term plan online. It will give you an approximation of the required coverage based on your personal financial profile. 

Simplify Your Term Insurance Purchase with 5 Tips
Image Source: Shutterstock

3. Select The Pay-Out Option As Per Your Family’s Needs

Insurance providers offer multiple pay-out options to help you customize the policy when you buy term plan online. You can choose the lump sum pay-out or the staggered pay-out option with term policy in India. 

  • Lump-Sum Pay-Out – Under this option, the nominee of the policy receives the entire sum assured amount as a one-time payment in case of the insured person’s demise. 
  • Staggered Pay-Out – Under this option, the family can receive the pay-out in the form of regular payments over a specified period. 

Depending on your family’s requirements, you can select the appropriate pay-out option to help them manage their financial situation efficiently when you are not around. 

4. Don’t Consider Price As The Only Factor

The insurance policy's price should not be the only driving factor when you buy term plan online. Although it is understandable that you may want to choose a cheaper option, consider other factors well before making the decision. For instance, you should look at the variety of benefits offered at the price and the insurance provider's credibility. 

Be sure to compare different policies on these crucial parameters when you buy term plan online. Besides, the tax benefits associated with a term policy in India can reduce the burden of premium payments. Under Section 80C of the Income Tax Act, 1961, the premiums paid for term life insurance canada are eligible for a tax benefit of up to Rs. 1.5 lakhs annually. 

5. Disclose Medical Conditions Without Fail

Hiding relevant medical information from the insurance provider can only cause you and your family trouble in the future. It can be viewed as an attempt at insurance fraud by the insurance provider, and as a result, the claim may be rejected. You can read the IRDAI guidelines on claim settlement to avoid any mistakes.