A â€˜term plan’ is the simplest of all insurance products and very simply put, is a contract where the insurer protects your family’s financial future in the unfortunate occurrence of your demise. Purchasing a term plan is an easy, hassle-free process with four small steps:
Determine Life Cover
The life cover refers to the sum of money given to your family in the unfortunate event of your demise. Based on your income, number of dependents and existing EMIs, you must calculate an optimum amount that would be sufficient for your family to cope up with the loss of income in your absence. Do note that with inflation and subsequent rising prices, even a large number today can be miniscule in the future.
Choice of Riders
Along with the life cover, you may also opt for riders, i.e. additions that give you additional benefit in certain events of your choice: critical illness, accidental death, waiver of premium, accidental permanent and total disability rider, etc. They come at relatively cheap marginal premium.
Term plans are cheaper than other insurance offerings. Apart from the sum of life cover, premium is also determined by age, health and lifestyle choices. It is also influenced by the term of your plan, i.e., until what age would you want to be insured. Opt for a premium which fits best with your financial condition. You can choose to pay premium either as single payment or every year i.e. the annual payment mode.
There are multiple insurance plans available, each catering to a specific need. Try choosing a product which gives you the largest life cover, multiple riders and other features at the lowest price. Look out for plans that provide cover up to a greater age, like 80, since they provide protection for a longer period of time.
Although insurance was only bought through sales agents earlier, technology has transformed the sales process. You can now log on to the insurer’s website, select the suitable plan and buy insurance from your home through your computer. Online plans are relatively cheaper than offline products. You can also request an assistance call and let the advisor guide you through the process as you fill the form.
Eureka! In 5 easy steps, you’ve successfully insured yourself and your family.