How to Choose a Term Insurance Plan?

Buying term insurance is important, but choosing the right plan is absolutely vital. You cannot get the best life cover unless you understand the features of the plan, the benefits it offers and the pricing. It is therefore very advisable for you to take some time and do your research. This will help you to locate and choose the best term insurance plan.

Coverage of a Term Insurance Plan

When you buy a term insurance plan, you first need to analyse which factors of your life you intend to cover with it. Most commonly people look to cover the following with term insurance:

• Loans and debts: It is very common to buy a term plan to cover loans and debts. Let us assume you have a home loan that you are still repaying. You are the sole breadwinner of the family and a part of your salary is used to pay the EMIs. If you suddenly die, how will your family pay off the home loan? It can even lead to them being evicted from the house. That is a very scary thought, isn’t it? To prevent any such things from taking place, you need a term plan that is as large as your home loan. So even if you die, the sum assured can be used to pay the debt off.
• Kid’s education requirements: If you have a small child who needs to complete her education, start a business in the future and get married, you need to make the finances available for her, whether you are alive or not. A term plan can help you provide her with this assistance. Calculate how much she will need for her future goals and buy a term plan that is large enough for her to achieve all her dreams.
• Income replacement: Another cover to think about while buying term insurance is your income. After your demise, your term insurance plan should be able to take care of your family’s day-to-day financial needs, just like your salary did. So you need to choose a large cover and also be careful about the duration of the plan. Ideally, your plan should be active till the time you retire.

These are the very common and popular factors that most term insurance policy holders look to cover under their plans.

Noticeable Hurdles Faced While Claiming in Term Insurance

All the covers mentioned above sadly will be needed by your family only if you die. You won’t be there to help you family process the claim either. Many at time, the nominees of the deceased policyholders face hurdles when making a claim in term insurance. Most of these hurdles are encountered because:

• The documents are misplaced
• There was an error while filling the application form
• The policyholder gave false information while buying the term plan
• The claim application was submitted too late

As the policyholder, it is your responsibility to be completely honest while buying the term insurance plan. You may be tempted to hide some details, but if you die, your family members will be the ones to pay for it. Don’t push them into such troubles. Just be honest and help them get the claim smoothly. Then, tell them where you keep your policy documents and other papers that they would need to make a claim. Keep them prepared so the claim can be applied for quickly. If there is a delay in the claim submission, your beneficiaries may even miss out on the entire claim amount. It is never easy to think about your own death, but life is unpredictable. You need to be practical and inform your family what they need to do if you go. Start off by discussing the term insurance claim process.

The final word

Choose a term insurance plan after considering what the situation in your life is like. Your cover should be large enough to take care of your family members, both in the present and in the future. So the age of the family members, the number of dependent members, the other incomes of the family, etc must be calculated. Once that is done and you know what your ideal cover should be, look for plans that suit your requirements. Run an online comparison in a quick and easy manner and locate your ideal term insurance plan. After that, you can stay protected with a good, affordable and comprehensive term insurance cover.