At some point or the other, you must have heard about the importance of life insurance before, especially term insurance. Term insurance is a type of life insurance that secures your loved ones in your absence. It does this by giving a monetary payout in the case of your premature demise. Earlier, term life plans only provided this base feature.
Now, term life plans have evolved with more and more companies offering online term plans and include a host of attractive features and benefits. While this is great to suit different people, it also makes it time-consuming when the time comes to buy term insurance. However, knowing these five things can make it easy to buy a term plan.
How to Buy Term Insurance Plans in India?
1. Determining the amount of cover you need is the first step in buying term insurance.
Before you start your search for a term life plan, it is essential to determine the amount of coverage you need. Financial experts recommend getting term insurance coverage between 10-20 times more than your annual income, depending on your age. The younger you are, the higher the coverage amount should be.
You also need to consider factors such as:
- The number of dependents/family members you have
- Your family’s lifestyle needs and future goals, such as:
o Cost of living
o Higher education
o Medical healthcare
- Your current loans/liabilities
- Your liquid assets, such as investments, property, savings, etc.
- The inflation rate, 20-30 years from now.
To get an accurate estimate, you can use this formula – 8x or 10x your annual income – the total value of your liquid assets = the average amount of finances your family will need in your absence.
2. Selecting the tenure of the term plan up to your retirement age is ideal.
Experts recommend a term plan whose tenure is up to your retirement age, as it is likely that your family members will not have to depend on your income/earnings once you retire. The ideal retirement age is around 60-65 years. So, if you are buying a term plan when you are in your 20s, a term plan of 40 years is suitable.
If you are in your 30s, a term plan of 30 years is advisable, and so on. Moreover, as you near your retirement age, your financial responsibilities will reduce, and your assets will increase. This will enable you to take care of your needs and settle any remaining loans or liabilities on your part.
Remember, you do not want to take the risk of paying extra term plan premiums for a longer duration or being uninsured with term plans with a shorter tenure. A simple way to calculate the tenure of the term plan is to take your ideal retirement age and minus it with your current age.
3. Comparing different term insurance plans will lead you to the right one.
It is vital to compare term insurance plans to find the best term insurance policy. All term plans provide this base death benefit; however, different plans have varying term plan premium rates and come with added benefits and riders. The riders provided in most term insurance plans in India include:
- An accidental death rider that gives an extra amount over and above the base death benefit in case of your demise due to an accident.
- A waiver of premium on permanent disability rider that waives the payment of future term plan premiums if you become permanently disabled due to an accident during the policy tenure.
- A waiver of premium on critical illness rider that waives the payment of future premiums if you getdiagnosed with one of the critical illnesses mentioned in the policy.
4. Disclosing everything to the insurer helps prevent claim rejection.
When you buy term insurance, it is essential to disclose all relevant information about you to the insurer. Your insurer will always ask you about your family’s medical history, your existing health condition, your total income, and such other questions. These details affect the price of the premiums and ensure your claim is accepted.
So, for instance, if you have a habit of smoking or drinking alcohol, and you keep that from your insurer, your insurer can reject your claim on the ground of non-disclosure. Or if you have a risk of developing a lifestyle disease and do not disclose that information, the chances of claim rejection might be higher.
5. Buying term insurance online will help you save money on premiums.
Buying an online term plan is cheaper than buying it offline as the commission that goes into paying brokers and agents gets eliminated. So, when you buy term insurance, insurers give you discounts in premiums that go even up to 30%.
Most of the best term insurance in India is now offered online. Moreover, you get to compare a plethora of term plans and find the best term insurance policy for you. You can also get a term insurance tax benefit and get a refund on the term plan premiums paid by you during a year, as long as they fall below ₹1,50,000.
Live Zindagi Unlimited with Zindagi Plus
Edelweiss Tokio Life Insurance goes the extra mile and provides its customers with an all-round online term plan – Zindagi Plus (UIN: 147N056V04). With this term insurance plan, Edelweiss Life insurance gives:
- A better half benefit that pays an extra amount equal to 50% of the base coverage amount to your spouse on your demise
- The payment of the death benefit even for your death due to a pandemic (including COVID-19)
- A cover amount of up to ₹99,99,000 without any medical tests/underwriting
- Convenient term plan premium payment options
- Discounts on a large cover amount in their online term plan––
- Protection against 35 critical illnesses with the facility to waive off premiums in case of diagnosis
You can buy the Edelweiss Tokio term plan online on our website and enjoy multiple benefits, like customizable cover, top-up benefits along with applicable term insurance tax benefits.
As crucial it is to do your research and compare term insurance plans, it is as crucial to buy term insurance from a trusted and reliable insurer. To do so, you can check various metrics that indicate its quality of services, such as its claim settlement ratio, its market reputation, and customer testimonials.
Edelweiss Tokio Life Insurance, with its Edelweiss Tokio Life - Zindagi Plus term insurance plan, offers a comprehensive term coverage, critical illness cover, spousal protection, COVID-19 death claims and much more. For more information, contact us for a callback today!
Chirag Iyer - BFSI Enthusiast
Chirag is a writer and an avid reader who loves to drink coffee! His other interests include boxing, karate, and singing