Term insurance is designed to replace the income generated by the bread-winner and to help cover basic household expenses, debt and major expenses such as child’s education or child’s marriage if the worst were to happen.
Once you take a life insurance policy, here is what you have to do to ensure that your family is not harrowed as to how to deal with the issue in case of your unfortunate demise
- Inform your family members:
You bought the policy for the wellbeing of your family in your absence. The first step is to explain the complete policy to them and the claim process. Make them aware of the benefits of your term insurance plan. There are a number of reasons why claims get rejected or delayed. A prime reason is inadequate documentation or the claimant not being able to understand the claim settlement process.
- Ensure that your documents are safe:
Keep your life insurance document safe. Make a copy of your term insurance policy and store it in a secured place. Even if the policy was issued to you electronically, ensure that a hard copy is kept for your family.
- Never default your premium:
Be regular with your premiums to ensure that the policy stays active. If you have not paid your premium amount due to which your policy has lapsed then there is no way the insurance company is obligated to make the payment to your beneficiary. If you miss a premium payment, look out for the grace period. Incidentally, the grace period is generally not more than 30 days. If the premium payment is monthly, then the grace period stretches to just around 15 days. You can pay online via net banking or via your debit/ credit card. It’s better to opt for standing instruction which will enable auto debit of premiums so that you are regular when it comes to renewals.
- Consider changing circumstances:
Circumstances change. The number of dependents may increase. You may have a second child. You may be burdened with a home loan and a car loan. The cover you selected may not be sufficient for your family. Review the coverage amount once a year. Also, keep tab of when the policy expires. Don’t put yourself in a position where you find yourself completely uninsured for a period.