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5 Things to Consider Before Buying Term Insurance Plan

dateKnowledge Centre Team dateJune 24, 2021 views192 Views
Buy the Best Term Insurance Plan | Term Life Insurance Policys

Buying a term insurance plan is a significant determination that should always be done mindfully. A term insurance plan not only provides a lump sum amount when required or at the end of the maturity period but further takes care of the aspirations that you hold for your loved ones.

It is a pretty uncomplicated insurance product where your life remains protected until you pay fixed term life insurance premiums. In case of your death, the insurance provider gives out a cumulative sum to your family to provide them with some financial stability. For them to avail of these benefits, you need to buy the right term life insurance policy.

5 Things to Consider Before Buying a Term Insurance Plan

While a term insurance plan is the most suitable investment option, it can provide a higher coverage benefit only when you purchase the right term insurance plan. Mentioned below are a few things that you must keep in mind while buying a term insurance plan.

1. Choose adequate cover

One of the most significant areas where most of us make mistakes while buying a term insurance plan is not choosing adequate coverage. However, selecting the right amount of coverage is the most important task and must always be done carefully.

You must always consider various factors like your age, earnings, profession, medical history, number of dependants, and average monthly expenses. Then, choose the term plan that can cover all these factors.

Choosing a term insurance plan with less coverage due to their low premium requirement will never prove beneficial in the long term. Hence, always ensure that you do not fail to choose adequate cover simply because it demands lesser premiums.

2. Decide on the term insurance plan period

Determining the term insurance policy period is the next significant selection to make. If you require higher insurance coverage at a low premium instalment, then it is always advisable to opt for a term insurance plan at an early age.

When the policy is acquired at an early age, you get the maximum policy period, proving beneficial in building a more secured financial bubble around you and your family.

Apart from this, many insurance providers further provide you with a facility to increase or decrease the life cover by paying a higher premium in the initial years. Thus, paying a term insurance plan premium does not feel like a burden when your expenses grow.

However, this is only possible when you choose the policy period wisely and opt for a term plan at an early age to safeguard your future.

3. Do not hide any information

To obtain the maximum benefits out of your term insurance plan and ensure that your family members do not get into any trouble while claiming the sum after your demise, you must never hide any important information from your policy provider.

If you are a regular smoker or drinker or may be suffering from an acute disease, disclosing all such information to the insurance provider will ensure that your term insurance claims are never rejected.

4. Add suitable riders, if needed

Choosing suitable riders is a supplementary benefit in a term insurance plan that provides you with additional coverage. These riders hold the potential to present added perks along with the benefits of the core life insurance plan. You can easily choose from the riders mentioned below that suits your requirement.

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ULIPs for planning your retirement

4(A). Accidental Mortality Benefit Rider

This accidental mortality benefit rider provides an added sum guaranteed to the nominee or beneficiary in the event of the accidental demise of the policyholder.

4(B). Critical Illness Term Plan Riders

A critical illness term plan rider provides a lump sum amount to the beneficiaries if the policyholder is diagnosed with a particular illness and that too, without any conditions or sub-limits.

All you need to know about critical illness benefits under a life insurance plan.

4(C). Income Benefit Term Plan Rider

By choosing this rider benefit, the family members of the demised policyholder will receive an added income every year for a duration of 5 to 10 years. The most helpful part of this rider is that it is in enhancement to the primary sum assured.

5. Choose the right insurance provider

Choosing an appropriate insurance provider is another important point that you must consider before purchasing a term insurance plan. It is essential to examine determinants such as the insurance provider's experience, patron reviews, claim settlement ratio, and economic strength.

You must also pay a higher weightage to the client-centricity of the insurance providing organisation regarding sales, assistance, and premium payment choices.

A term insurance policy is regarded as one of the most prudent investment options in your financial portfolio. This not just renders financial assistance to your family but additionally serves as an assistant in funding their future. Hence, it is always important to choose the right term insurance plan to have no financial burden on the future.

Suppose you are looking for the most comprehensive term insurance plan that provides adequate coverage with flexible premium payouts. In that case, you must always choose iSelect Star Term Plan by Canara HSBC Oriental Bank of Commerce Life Insurance to safeguard the future of your loved ones. A term insurance plan is a modern investment option that guarantees your family and loved ones remain economically secured and protected in case of your early demise. If a person purchases a term life insurance plan, they will have to pay a specific sum from time to time.

This payment of a specific sum will always ensure that the beneficiaries or the nominees of the policyholder will be left with an assured sum even after the sudden departure of the policyholder. A term insurance plan is the most powerful and efficient form of insurance that presents extensive financial protection to an insured person and their loved ones.

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Frequently Asked Questions (FAQs) for Term Insurance

A person can only purchase a term insurance plan till the age of 65 years, and they can choose the risk coverage for up to 99 years of age. One can easily buy the best online term plan between the age of 18 to 65 years.

This being a term plan doesn't offer any payout after maturity or expiration date.

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 70 years of age.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly.

If your key purpose is to give your Family financial protection, go for the term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, a term plan pays a part of the sum insured to treat your disease.

Term insurance riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term policy remains active until the expiration date.
  • Income Rider: The rider ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to Ask while Buying a Term Insurance?

  1. 1. Amount of premium you have to pay based on your age, habits, education, and monthly income
  2. 2. The total number of benefits covered in the term plan. Do they include benefits that you care about the most?
  3. 3. How to save money on tax if you pay for the term plan?
  4. 4. Do they offer regular income options?
  5. 5. Can you change the coverage and premium in the future?
  6. 6. Does the claim consider valid if death occurs outside India?
  7. 7. Which kind of death is not covered by insurance?
  8. 8. Can NRIs take term insurance? If yes, what are the conditions?
  9. 9. Does the term insurance plan have a cash value if you decide to cancel the policy?
  10. 10. Under what circumstances can a term insurance plan be cancelled?
  11. 11. Can I pay the premiums online or make electronic payments?
  12. 12. What will happen to the term plan if the life assured starts smoking after purchasing the policy?
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