We all know that a life insurance policy protects the needs of our respective families and provides a death benefit in cases of death. Term insurance plan is no less of an exception when it comes to securing the needs of your beloved ones with the help of life coverage. Besides, the additional benefits like riders make term plan a long term option for investment.
On the other hand, there are times when a majority of investors blindly invest in term insurance based only on their coverage needs. As an investor, it is his responsibility to understand the working of a policy in details to get the most out of his investment. Lack of knowledge about the product can further lead to misconceptions and misunderstandings. Therefore, take a look at these FAQs about term insurance for informed decisions of investment:
Things you need to know about before investing in term insurance:
- What is term life insurance?
Term insurance is the simplest and the purest form of the life insurance policy. A term policy is specifically crafted for the needs of your family. Therefore, it offers the beneficiaries with a death benefit in order to help them survive without the policyholder.
- How many years of a term period should I opt for?
The higher the term of your policy, the higher will be your premiums. In order to take advantage of these premiums, it is advisable to opt for a plan with a term until your age of retirement.
- When can I invest in a term life insurance?
Ideally, the best time to invest in a term life insurance is at a young age. Hence, when you’re at the age of 25 years, start your investment in the policy. Investing at an early age ensures a lower cost of insurance as the insurance costs, later, are higher for older people.
- What are a few important things to keep in mind before purchasing term insurance?
There are certain things every investor should keep in mind before investing in a term insurance plan. Given below are some mandatory things an investor should consider before opting for term insurance:
- The insurance company that he is opting for should have a name in the market.
- The requirement of your need for a cover should be kept in mind.
- Cross check with the claim settlement ratio
- See to it that your policy beats the terrors of inflation.
- Read the terms and conditions of the policy carefully.
- Confirm if there is an online availability of the plan too.
- What are the term insurance benefits?
Take a look at these benefits mentioned below in order to enjoy long term gains of the policy:
- Low costs
- Life coverage
- Tax benefits
- Death benefits
- Low premiums
- How should I decide the amount of sum assured for my policy?
Sum assured is nothing but the life cover offered by the insurance company to the policyholder. The amount of your sum assured decides the death benefit for your beneficiaries. Therefore, consider these following facts in order to protect them in times of need:
- Number of dependants
- The lifestyle of the dependants
- Educational facilities of your children
- Your affordability and investment needs
- What type of unforeseen events are covered in a term insurance plan?
When you opt for term insurance, you are undoubtedly covered in times of all unfortunate and unforeseen events. However, there are certain events that guarantee maximum optimization of the coverage. Events like death due to natural cause and death due to accidents and critical illnesses are typically covered by this type of policy.
- What happens if the policyholder doesn’t die within the term course?
When the owner of the policy does not die but rather survives the policy, a term plan permits the option of a survival benefit which you can only utilise if you avail the benefits of survival at the time of purchase of the policy. This means that your previous insurance plan is terminated. In order to continue the life coverage, you have to renew the term insurance policy.
- What is the difference between selecting online and offline term insurance plans?
The good news about term plans is that they are available online as well as offline. While offline investment in a term plan has several benefits, the money savings and time savings benefits are provided by an online term plan. Take a look at these benefits of selecting an online plan given below:
- Low premiums
- Comparison between different options
- How will my insurance company settle the claim if I own more than two policies?
When an investor owns more than two policies, he has to mention the same in the policy. Later, the death certificate should be submitted to that company which has been holding his policy for the longest period of time.
- Does the term insurance plan have criteria for smokers and non-smoker?Fortunately, enough, a term insurance company allows the investors with separate criteria for smokers and non-smokers. It provides benefits to the people who are into smoking and those who chew tobacco. Additionally, it also offers the flow of premium to the people who have quit smoking.
Now that you know everything about term insurance plans, are you ready in one? Trust us, with all these FAQs covered, your investment in a term plan will turn out to be worthwhile. Insure your loved ones with the right cover and expertise which comes in the form of term insurance.