Is Your Term Plan the Best? Think Again!
In the ever-evolving life insurance policy arena, two different types of policies can be found. The traditional life insurance plans that offer a death benefit, and term insurance plans that offer life coverage for a specified period.
A lot has changed since the beginning of these two kinds of plans as insurers have been constantly improving them to meet customers’ growing needs. That being said, several features make an ideal life insurance plan.
However, if you don’t have an idea of what to look for, there’s no way you can get the right coverage at the best price. In this post, we’re going to provide you with some tips and strategies on how to analyze your options to find the best term plan as per your financial needs.
1. Regular Pay-Outs
Before you buy a term plan, it’s vital to make sure that the policy you’re considering offers the option of a regular income payout. This will ensure a consistent flow of income to your loved ones in the unfortunate event that both parents should die before their children are fully grown up and capable enough to take care of major financial burdens on their own.
Regular income pay-out is more important than ever before because most families depend on two incomes rather than one these days. The best term plans allow you to choose from several different options like monthly and lump-sum pay-outs, based on your financial requirement.
This is a flexible option best suited for people who don’t have a consistent income stream. You can even choose to get a lump-sum amount along with monthly installments. You can select the proportion between the installments and lump sum, from 25%-75%, 50%-50%, 75%-25%.
2. Coverage for Spouse
You invest in the best term plan for the financial security of your family which essentially means making sure that they are taken care of if you die. It’s important to have coverage for your spouse too, especially if they’re entirely dependent on you financially.
When you buy term insurance online, make sure you’re getting a discount for being able to add your spouse on a term policy, then you won’t have to purchase separate coverage for them as well. The best term plan will offer you this service with a discount on rates as well.
3. Premium Waiver Benefit
If you get into an accident or are disabled, your ability to continue making a living for yourself may be at risk. But if you’ve added the Accidental Total and Permanent Disability rider, then in the event of disability all of your monthly payments will cease to exist and your policy will continue unabated. The minimum coverage benefits will be paid out and the policy will remain active regardless of any such unfortunate events!
4. Different Cover Options
The best term plans let you grow or decrease your life insurance policies over time. For example, if you buy the plan early in life and think that your responsibilities may grow larger in the future, this policy is ideal for you as it gives you the flexibility to swap out options as your needs change at different points in your lifetime. You can also factor inflation into these plans later on when necessary.
5. Accidental Death and Critical Illness Rider Availability
Riders are additional benefits for your standard plan. To expand the scope of what a rider does, consider adding an addendum to your already impressive coverage. For example, if you find yourself travelling more often or working in an area prone to accidents, it may be smart to look into purchasing the Accidental Benefit rider as a supplement to cover you in those instances.
On the other hand, an insurance term plan that features a critical illness rider can prove to be a boon to patients suffering from critical illnesses such as cancer. Such a policy would provide lump-sum benefits on the diagnosis of the illness thereby aiding patients in receiving prompt medical care without worrying about how they would manage financially.
6. Rebates for Specific Conditions
Choosing a higher sum assured can also help you get rebates if the sum assured is met during the term of your policy without any claims. Another way to make sure you’re getting value for money is by working out which insurer offers more coverage and benefits that fit what exactly you will be using it. With regards to saving on premium costs, women and non-smokers do enjoy being given preferential treatment because typically speaking, they are statistically less likely to face medical risks associated with heart disease or difficulty breathing during their lives.
7. Flexible-Premium Payment Terms
Term insurance is a contract that covers you for life and protects your family in case something should happen to you. To further ensure the security of your loved ones, most insurance plans offer flexibility in terms of premium payment where people have the option to pay yearly, quarterly, half-yearly, or monthly. This works well with budgeting since it enables people to pay as per their convenience and according to their budget effectively making sure protection doesn’t cause much strain on their financial needs.
An ideal term plan offers multiple different types of coverage at an affordable premium. Pay attention to what your plan features and make sure it includes the protection you want and need. Don’t just assume that your current plan has everything you need, because you could be overlooking something important. Just by knowing more about your term plan, you can be sure you’re getting the most out of it. Make note of the monthly premiums and coverage period, as well as details regarding benefits, maintenance, conditions for withdrawals, and tax rebates from section 80C and section 89 of the Income Tax Act of India.