Life is full of unannounced uncertainties and no one knows what may happen next. So, it becomes quite imperative to secure the future of the family. Term Insurance Plan comes to the rescue. Term plan is a pure insurance plan that pays sum assured amount as a lump sum to the nominee/family and thus it assures financial protection to your family.
It’s a fact that the term plan plays a key role in securing the financial future of the loved ones, however, it would be a wise move to first read few quick tips that will help you make a right buy.
Determine the Right Cover Amount
There are various determinants that influence the coverage amount you would need to secure your family financially. Assessing the responsibilities and liabilities you have, helps choose the right cover amount. Financial liabilities such as children’s higher education, his/her marriage, home loan or car loan, etc. As a rule of thumb, you should go to buy a life cover of around 10 times the annual income.
Policy Tenure
Before buying a term plan, it’s important to look for a tenure for which you want to buy a plan. The ideal policy tenure would be up to the retirement age and more importantly, get a policy up to an age so you have paid-off all your financial liabilities. If you are buying the plan at an age of 30 years, choosing a policy tenure of 30-35 years would be the right one.
Choose Right Payout Options
Typically, a term plan pays a lump sum amount to your family in the event of your untimely demise during the policy term. It needs to assess whether your family don’t face difficulty in managing the huge lump sum amount or you may opt for other payout options such as income option, lump sum + income option.
Choose Nominee Carefully
When choosing a nominee for your plan, it needs to make sure that he/she is trustworthy enough to provide him a legal right to receive a sum assured amount on your death. Usually, policyholders choose his/her spouse a nominee and at sometimes the child.
Disclose the Material Facts
Before buying a term plan, it is advisable not to hide facts while furnishing details on the proposal form. Key facts such as age, health condition, smoking/drinking habit, your occupation, etc make an impact on the policy premium, so you should provide the right information. The insurance company will carry out the detailed checking before paying the Sum Insured to your nominee and in case, you are found at providing the wrong information, the insurer may deny from paying the claim amount.
Compare Online
Prior to buying a policy, you have the option to compare term policies online and choose the one that fits to your requirement. Moreover, buying a plan online helps you get premium discounts, plus you can enjoy the hassle-free buying with quick policy issuance.
Conclusion
Buying a term plan is a wise decision that provides financial protection for your family. You only need to choose a right life cover, they actually deserve.
