While earlier it was not the best option, but everyone today is going long term because of the benefits that you get. We are talking about the long term insurance plans for your family. Long term insurance policies have come a long way and even companies are advertising it. Today, people opt for long term insurance policies because the premium rates come down considerably when it comes to long term plans.
When you want a high cover for a low price, long term insurance policy is what you look for. The premium rates of a long term plan will be considerable lower when compared to the endowment plans, money-back policies or ULIP plans. So, before you compare term insurance plans online and buy one, here are a few things you need to consider and ask yourself how much profit you will get from going long term.
- 1. The amount of cover you need
Why do people buy life insurance today? The answer is simple. In the unfortunate case of the death of the policyholder, his/her family should have enough to cover for their life. Perhaps, the major expenses that they will occur like marriage and education of his/her child(s). So, decide on the amount of cover you will be needing and then only look for a policy.
- 2. Term of the Cover
One needs to consider this factor very closely. There is no point of taking a long term insurance plan for a short period of time. Your long term insurance plan needs to be at least long enough to give you a cover till the age you are planning to work. Earlier, this was used to be 60. But, that is not the case anymore. So, having a long term plan till 65 years is the key.
Never go for long term plans of 15-20 years. When you take a long term insurance plan in your 20s, the premium rates will be low. But, if you go for a fresh long term plan in your 40s, it will cost you a lot of money. Moreover, 40s are the time when you need the insurance. Also, opting for a plan that is flexible with the tenure is a good way to go about it.
- 3. Consider inflation too
Inflation is one thing that can change the economic structure and will definitely affect your financial status. Thanks to inflation, the sum of INR 50 Lakhs which you thought would be sufficient in the coming years would go as low as INR 25 Lakhs with just 6% inflation in the next years. When you are looking to Buy Online term insurance policy for your insurance companies online, go for the ones that factor in all these problems. The solution that you need to look for is in a company that either offers a raise of 5-10% every 10 years in your sum assured or index inflation. This way the money you will get at the end of the tenure will be sufficient.
