While the features and benefits of different term plans can vary, there are some essentials that every quality plan offers. Check out this post to know more about these term plan basics.
If you are looking for a way to secure your family’s financial future, purchasing a term plan can be a wise decision. It is one of the purest forms of life insurance, which is functional and highly affordable too. Moreover, insurers now offer many different types of term plans to match the customers’ needs and expectations.
But while the features and benefits of term plans can vary between the type of plan and insurer you select, some elements are an absolute must in every plan.
Here are five such term plan essentials-
1. High Sum Assured
The sum assured or the policy coverage should be adequate to take care of the financial needs of your loved ones at least for a few years. The basic rule of thumb is to select a sum assured that is 20 times your annual income.
The policy you select should provide you with the flexibility to choose a sum assured that you feel is the best fit for you and your family.
2. Affordable Premium
Apart from the sum assured, the insurer will consider factors such as your age, health, income, etc., to calculate the policy premium. Compare the premium of at least a few popular term plans for the sum assured you want to choose one that is most competitively priced.
Avoid plans with premiums significantly lower than the market average. Such plans generally have hidden clauses and expenses. Prefer a reputed insurer with a healthy claim settlement ratio.
3. Multiple Add-on Options
Add-ons are an excellent way to enhance the features and coverage of your term plan. Your insurer should offer a wide range of optional add-ons, especially critical illness, the return of premium, and accidental death.
You can select add-ons as per your insurance needs for additional protection. Note that health-related add-ons are also eligible for tax deduction up to Rs. 25,000 in a financial year under Section 80D.
4. Easy Online Purchase and Renewal
Most insurers now allow you to purchase a term plan online. This eliminates the need for you to visit the insurer or meet any insurance agent for completing the purchase.
From document submission, premium payment to receiving policy documents, you can complete all the steps related to buying and renewing of the policy online. Similarly, the insurer should also allow you to renew your policy online for enhanced convenience.
5. Easy Claim Filing
In case of the policyholder’s demise, the term insurance policy nominee should be able to file a claim with the insurer easily. This is generally done by phone, online, or by visiting the insurer. The claim filing process should be simple and quick.
Ensure that your policy nominee is also well aware of the claim filing process so that he or she can take necessary steps on time for faster disbursal of the death benefit.
Term Plan for Affordable Life Protection
No matter what term plan or insurer you select, ensure that the plan comes with the basic features listed above. These features will ensure that your policy is functional, affordable, and offers valuable protection against the unexpected.
Compare the features and premium of a few popular term plans from reputed insurers to make your final purchase decision.