Planning for the future is something that most people always consider their first priority. As sad as it may be, but death is an eventuality that we cannot overcome, it will happen. When an individual moves forward in life, many changes take place, change in the number of responsibilities one shoulders.
There is no arguing with the fact that a young and unmarried person will have relatively lesser responsibilities as compared to a married one. Hence, it is important to have a backup plan that helps provide protection to your family in case of any mishap.
If you are seeking a simple and uncomplicated protection plan for your loved ones, a term insurance plan is something you should consider. Term plan is very simple in their working, making them very easy to understand. This plan will offer financial protection to your loved ones, especially in any trouble.
Following are the things you should consider before choosing the right term insurance plan.
1. Evaluate your needs: The first step involved in the purchase of an insurance policy is nothing but the assessment of coverage needs. It is important for you to calculate the amount of coverage you think your family will be comfortable and after that set out to look for plans accordingly.
2. Premium: Premium is an important factor as it impacts an individual’s decision to purchase or not to purchase a plan. However, pricing does not define the efficiency of a plan. Always keep this in mind that an expensive plan will not necessarily mean the plan will offer the best benefits.
3. Riders: A rider is an add-on benefit which helps protect from such risks and can be attached to the base policy on the payment of an additional premium. When choosing an insurer, it is important for you to consider one that can offer multiple rider options. Some of the common types of riders available are Premium waiver rider, Accidental death rider, Accidental disability rider, Critical illness rider, Accelerated sum assured rider, and Hospitalization benefit rider.
4. Claim Ratio: Another important factor which must be considered when buying insurance claims ratio. Before you shortlist an insurer, make sure you check their claim ratio. This is nothing but the total number of claims registered in comparison to the number of claims settled by the company.
5. Check Insurer’s Reputation: Besides the claim ratio and solvency ratio, there are some other factors which one can consider that you should consider in order to assess the reputation of an insurer. You can check the insurer’s corporate governance record, their assets, etc.