Term plan is the right product for life insurance. It gives financial security to your family in case of any untoward incident. However, in this, the policyholder does not get any amount on the maturity of the plan.
Investment advisors also recommend keeping insurance and investment separate. If you keep insurance and investment separate then you will get better insurance cover and you will also be able to earn a good return on investment.
In a term plan, the person buying the insurance continues to pay the premium for a pre-determined period. If the insured dies during this period, then his family or nominee gets the sum assured.
Term plans actually get you cover at very low premiums. Usually, the term plan can be taken for 10, 15, 20, 25, or 30 years.
Now telling what 4 things you should keep in mind before buying a term insurance policy?
1. Take cover as needed
Financial advisors say that you should buy insurance at least 10 times your annual income. Along with this, keep increasing the insurance cover as your income increases or with the change in life or buy a separate term plan.
Accordingly, if you earn 15 lakh rupees in a year, then you should buy a term plan of at least 1.5 crore rupees.
2. Term Plan Premium
The premium of a term plan is actually dependent on three factors- your age, amount of coverage, and the term of the policy. For the same age, term, and life cover, the insurance company may charge a different amount from a different person.
You can compare different features on the online website before buying a term insurance policy. Only after this, you should buy a term plan.
While comparing on the online website, you need to see the claim ratio of the term plan of a company. You can consider a company with a claim ratio close to 95% as reliable for buying a term plan.
3. How many types of term plans are there?
As your age increases, so do your insurance requirements. When you are young, the need for insurance will be something. Insurance cover will have to be increased after marriage. Similarly, having children will require more cover for you. Many insurance companies sell such plans in which you can increase or decrease the sum insured over time.
4. Nomination or Nomination
Nomination is the most important part of any insurance policy. You take a term plan for the financial security of your family. Nomination ensures that only the one you want gets the sum insured in case of any unforeseen circumstances. You must give the information of the nominee while buying the insurance, especially the term plan.