Factors to Keep in Mind While Purchasing a Term Insurance Plan for Yourself
Life insurance is a crucial part of financial planning that provides coverage for a specific period in exchange for a premium. It has to be reevaluated at a regular frequency. Most individuals go for a low-premium term plan, but is cost the only factor that should be taken care of? What are some other key factors to be considered while buying a term insurance plan?
Individuals should determine the right amount of sum assured and the term of the policy for which they should take into account their income, expenses and retirement timeline. Focus on getting the right life cover regardless of the higher premium. What is the point of buying a low-premium policy if the insurance company’s claim settlement performance is not satisfactory? Sometimes, you have to pay more for quality.
Evaluate the available policy options thoroughly and consider the following options:
- Are additional benefits, such as critical illness coverage or accidental death benefits, provided?
- Are these benefits already included in the basic policy premium or available at an extra cost?
- Is there any preference for a payout option, lump sum or periodic?
- Will the payout option affect the cost of the premium?
There is no such thing as a right-term insurance plan. It depends on what you are comfortable with and what your preferences are. Make sure you analyse and evaluate all factors while buying a term insurance plan and go for what suits you best after carefully considering these factors.
