5 Tips to Buy the Best Term Insurance Plan in India

Life is full of uncertainties. A few of these uncertain incidents can affect the dreams and lives of your loved ones. For such events, you cannot prepare financially in a day or two. However, you can have insurance to take care of their needs in times of need.

A term insurance plan is one such life insurance plan that acts as a financial cover for the dependent family members in the case of the policyholder’s untimely death. Getting the best term plan in India can make life easier for both you and your family.

Now, how do you find the one policy out of many that will work according to your family’s needs? Let’s find out.

Finding the best term insurance plan is a difficult task, but not an impossible one. While there are many aspects to consider for the same, you can simply follow the five steps given below:

• Measure the Effect of your Life-stage and Family Size: Your income may grow each year by a certain percentage, but life progresses in stages. Each life stage can have a different number of people, and each depends on you financially and emotionally. Also, each life stage marks a milestone in your financial life

For example, marriage, childbirth, purchase of your first house, etc., are all life stages.

Each life stage has a specific relation with your income, savings, and financial needs. For instance, marriage means you now either share your financial responsibilities with another person or have someone depending on you. Similarly, childbirth would mean a whole different list of immediate financial needs and long-term goals.

Each of these stages means your financial responsibilities are growing, and so should your term insurance. Therefore, ensure that your term insurance can keep pace with your evolving life needs. You can either look for a term insurance plan that continues to grow every year at a fixed rate. Or you can also look for a term plan that allows you to increase your sum assured upon every key life event.

Know more about increasing the sum assured in a term plan.

• How much Money will your Family Need?: Does a family need ₹1 Crore to live out their lives without the support of the primary breadwinner and their income? Or will they need ₹2 Crores to maintain their lifestyle as well as meet their important life goals?
  
  These are the questions you need to answer if you want to buy the best term insurance plan for your family. Here are the three primary objectives your family will need money for in your absence:
  1. Running the kitchen and lifestyle
  2. Paying off any ongoing debt
  3. Investing for long-term future goals

Usually, as a rule of thumb, you can assume 10-15 times your annual income will sufficiently provide for all three needs. While you are already looking for a growing term insurance cover, this is where the term cover should start.

So, if you are earning ₹2 lakh a month, you can start with a minimum term cover of ₹2.5 crores.

• Pay Attention to the Pay-out Options: The purpose of term insurance is not to ease your life but to ease the survival of the dependents in times of misfortune. The way the plan pays out the benefit is important for your family members, especially if they are financially dependent on you.
  
  Imagine if your spouse and children are dependent on your financial intervention. Now, in case of an unfortunate event like the policyholder’s untimely passing, suddenly they become the owner of ₹2 Crore from the life cover. Although the sum is huge, it is the only sum of money they may receive for many years to come. They also need to decide the following three:
  1. Pay off the debts
  2. Invest in future goals
  3. Daily expenses

While the first two options are still relatively easy to implement, as you only need to set aside a lump-sum amount, the third option presents a greater challenge. Withdraw too little and you risk shrinking your lifestyle. Withdraw too much and you risk running out of money in the future.

Thus, a term insurance plan, which can help you set up a regular monthly benefit payout is a better choice. As the term insurance plan itself will bear the burden of providing a regular income to the family.

• Maximising your Coverage with Riders: Riders are additional covers that you can add to your life insurance policy. These covers will enhance your risk coverage by providing financial assistance under different circumstances.
  
  For example, in the case where you met with an accident, the accidental rider will support you financially. If you end up losing any two limbs, the rider will ensure that your term cover continues without further premium payments.
  
  The best term policy is the one that provides useful riders, like:
  1. Accidental death and disability cover
  2. Terminal illness benefit
  3. Premium waiver benefit

Term insurance plan like, iSelect Smart360 Term Plan by Canara HSBC Life Insurance, offers all these benefits and a rider for child support benefit. Child care benefit ensures a lump sum payment for the child’s future upon the policyholder’s untimely demise.

• Insurance Providers with High Claim Settlement Ratio: The claim settlement ratio is one of the important parameters to check while purchasing life insurance plans. This ratio answers the following two questions:
  1. How smooth is the claim settlement process of the insurer?
  2. How fast does the insurer settle a new claim?

Both factors are important measures to judge how easily your family members will get the financial support you have planned for them. Nowadays, insurers like Canara HSBC Life Insurance promise to settle the eligible claims within one working day.

Additionally, the best insurers have processes in place to support bereaved family members through the claim-filing process.

Buy Only the Best Term Insurance for Your Family

A term insurance policy is an instrument made to ease your family’s survival in your absence. While nothing can replace you for your family, the least you can do is ensure that they don’t face financial and social hardships without you. Be financially responsible by buying a term insurance plan.

Thus, the criterion for selecting the best plan makes life easier for your family. Additionally, you can look for options like online availability, payment options, and other features.

Conclusion

While looking for the best term insurance plan in India, you may come across several deciding factors. However, the claim settlement ratio, flexibility, ease of accessibility, after purchase support, etc., remain the utmost important ones.

At Canara HSBC Life Insurance, we ensure that all the features of an ideal term insurance plan are met in our offerings. From added rider benefits to return of premium and more, our plans offer online availability. Explore our top plans and compare the returns through our online calculators to ensure a financially secure tomorrow for your loved ones.

Make your smart financial move today.