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What are the best ways to purchase online term insurance plans?

dateKnowledge Centre Team dateJanuary 20, 2021 views290 Views
What are the best ways to purchase online term insurance plans?

A term insurance plan is an insurance policy that provides comprehensive financial coverage to the policy’s beneficiary. The financial coverage provided by the policy comes under a limited period. If the life insured dies at any point of time during the policy’s active term, only the beneficiary will get the assured sum amount. Term insurance plan is the most effective form of insurance that covers financial security and other important aspects of life, such as your child’s higher education, child’s marriage, etc.

Why Invest in an Online Term Plan?

Life is short and being financially secured to face every backfall of life is a must. One can never foretell the life uncertainties, and thus, to ensure your family’s security from any financial misfortune, opt for term insurance. An online term plan enables you to compare, analyze, and choose the required financial life insurance coverage from the comfort of your home. An online term plan is a more affordable option for you, here is why-

  • Lower premiums - A term insurance plan has lower premiums since no investment element is in the insured amount. Also, you get much lower premium rates while purchasing an online term plan since there is no insurance advisor involved. Hence, the company passes on the amount saved from the agent’s commissions and distribution costs to buy the policy online. Along with such benefits, you also save from overheads such as logistics, stationary, and documentation.
  • Easy Comparison - Purchasing an online term plan is a fairly easy process. There are tons of choices and many comparisons and case studies, with term insurance calculators, customer reviews, and other informative articles. You can also change the plan and customize an online term plan or even an offline term plan when required.
  • Fast and Secure purchase - Stay out of those long queues and pay through the different online options for fast and secure online payments such as net banking, credit cards, or debit cards. The payments are instantaneously processed through a secure payment gateway and are quick and hassle-free. You can receive an instant online receipt that is ideal for furnishing documents and quickly claim tax exemptions. You can also choose from a monthly/quarterly/yearly payment system as per your need.
  • Riders- Riders are the additional benefits that come with term plans but with a nominal fee and should be taken if required in case of a genuine need. The riders that can be taken are critical illness, death due to accidents, partial or permanent disability, etc. A term plan can also take care of the burial and funeral expenses, covers education and other expenses of the family, and pays off loans/debts that might have been taken during the individual’s lifetime.

How to choose the Best Term Plan?

Choosing the best term plan, within your comfort zone while covering all your needs, is crucial. Some people depend on you, and thus, you probably need to buy the best term life insurance plan. Choose smartly to get the best price and ensure that the company you choose is not risk folding.

Here are some important aspects that one should consider before purchasing any term insurance plan-

  • Claim Settlement Ratio (CSR) - It is the total number of claims the insurance company covers out of the claims filed when the insured individual dies. If the company has an 85% claim ratio, it means the insurer pays 85 out of every 100 claims filed. A good claim settlement ratio is an important aspect for any insurance company that makes it reliable and trustworthy. One should look for CSR and the number of claims that are being made for a better and accurate idea. A company should have a consistent ratio.
  • Solvency Ratio - It is one of many metrics used to determine whether a company can stay solvent in the long term. It measures the enterprise’s ability to meet its long-term debt obligations, including cases where the insurer has to pay the insurance cover to the beneficiary in case of death of the policyholder. The main solvency ratios are the equity ratio, the debt-to-equity ratio, the debt-to-asset ratio, and the interest coverage ratio. It should be at least 1:5.
  • Inquire the Existing Customer Experience - Getting customer reviews and ratings of the company gives an idea of its service. Enquire the existing customers about their experiences. An excellent customer review is an indication of a trustworthy and reliable company. Make sure that these reviews and ratings are from genuine customers.
  • Choose the Benefit Carefully - Before purchasing any life insurance plan; one must carefully look into the benefits they offer; you may also inquire about the benefits you want to cover. You must carefully analyze some important benefits: the accidental death benefits, premium waiver in case of disability, number of terminal illnesses covered, regular income payout options, etc.

Best Way to Purchase Online Term Plan

In an online term plan, you have the freedom to select the most suitable policy. There are important things you should remember while buying term life insurance or online term plans. Here is the step-by-step guide to buying term life insurance-

  • Choose Coverage amount and term length - Make sure that you actually need a term plan. Figure out how many years you want to be covered under your coverage amount. It is usually recommended to have a coverage of 10 times of your annual salary. You may use an online term insurance calculator to estimate the premium for your desired sum assured and term of the plan.
  • Filter your Search - Find the best company which is most financially strong, stable, and risk-free. It is crucial to buy from a company that’s likely to stand the test of time.
  • Add suitable Riders - After choosing the best company, you should add suitable riders to enhance your family’s support in case of disability and life-threatening illness.
  • Gather your medical history and personal information - The beneficiary or nominee will get the amount only if the life insured dies within the term of the policy; it does involve a lot of math and statistics. You will be asked a series of questions about your gender, age, height/weight, habits, and medical history. You will have to answer a few questions based on your state of residence and ZIP code, medications you’re taking, family history of diseases, marital status, etc.
  • Get Ready to pay premium - Seal the deal by paying your first premium. Most companies also have a feature to automatically deduct the premium amount from monthly payments directly from your bank account. You have the option to select monthly, quarterly, or annual payment options depending on your needs.

At What Stage You Should Buy Term Insurance?

Needs change with age, but term insurance is far beyond these needs; it is more a ‘must-have’ thing needed at almost every stage of adulthood. Term insurance covers almost all purposes, from entering a college to your retirement. Here is a complete detail of why and who should buy term insurance-

  • Entering College (18-21 years)- A college student may need term insurance to guard against liabilities like education loans.
  • Post First Salary (21-25 years)- To ensure that your parents do not have to worry about money in your absence, opt for a term plan.
  • After marriage (26-32 years)- To let your partner’s life free from financial turmoil, you should buy a term insurance plan. This is an important stage of life that is most vulnerable to financial misfortune, so it’s always better to stay prepared to face any uncertainty of life.
  • After First Child (33-40 years)- Your child needs a lot of security and a lot of financial attention as well. To provide such financial security to your child to ensure their bright future, term insurance would be the best option.
  • After Retirement (60+ years)- Save money for retirement to take care of unavoidable medical expenses and in the event of being diagnosed with a terminal disease. This stage is more vulnerable to such life bothering expenses, and thus, being prepared with term insurance to face this stage is beneficial.

Term insurance is the need of today. You can choose an online or offline term plan, but an online term plan would benefit you. The most important thing is to buy term life insurance from a company that will exist for the full length of your policy’s term with a secure-stable and risk-free existence. The only best way to purchase an online plan is to properly analyze the company, your coverage amount, term length, and your premium. Considering all the important aspects, riders, and this analysis, buying term life insurance becomes easy. It is always recommended to choose a reliable and trustworthy insurance company.

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