Things to know before buying a term plan

You may have listened to your financial advisor and decided to buy a term plan. However, after researching a little about life insurance policies, you may be more confused than before. Buying term life insurance is not as difficult as it looks. Although your mind is plagued with lots of questions, here are a few things that shall aid you in buying a term insurance:

Meaning:

What is a term life insurance plan? Its main purpose is to create the financial support to replace your earnings if you’re no longer around. In the event of your passing away, the insurance company disburses a fixed amount to your family. This corpus makes things easier for your loved ones. It could also be to fund future expenses.

The size of Life Cover:

Everyone would want a large life cover, but it is essential for you to think twice before you decide on how much life cover you need. It should be sufficient enough to replace your income and help your family tide over the difficult times after your death. It also depends on if there are any debts that you need to pay off. Keep in mind that with inflation, the cost of living shall go up further. An amount that looks big today may not be big enough at maturity.

Premium Payment:

Term plan premium is fixed for the length of the policy. It can be paid on monthly, quarterly, semi-annually or annual basis. Think about this carefully: how much money can you give annually towards paying it? The cost of an insurance policy depends on various factors including your age, health, and life cover you desire.

Choosing the Nominee:

Naming your beneficiary is very crucial. It should be a person who shall need the money most after your passing. It can be your spouse, your parents, or your child. It is advisable to keep your beneficiary informed about the key features of the policy and any changes that you decide to make.

Online or Offline?

Should you buy insurance plans online or offline? While there are a larger variety of offline plans, online term plans are cheaper and the buying experience is relatively hassle-free. Compare different life insurance plans and make an educated decision before buying one.

Siddhant Dubey - Writer & Photographer

Siddhant works as a freelance content writer who is interested in a wide range of spheres from photography and personal finance to cooking. He is also an aspiring photographer striving to showcase life around him through his vision.