If you are on the hunt for a life insurance plan that provides a gigantic size cover but does not burn a huge hole in your pocket, then term insurance is your prey.
In simple words, you pay the insurance firm a premium amount and they will insure your life for a set period. God forbid, if you no longer survive during that period, your nominees get a death benefit.
Buying a term plan can be tricky since there are so many aspects to it. We make it simple and detail the aspects you should keep an eye on.
1.Cover Amount
It is the amount your nominees receive on your demise. You do not want your loved ones to struggle with finances because the cover amount is low, do you? Therefore, figure in the plan tenure, inflation, and financial goals. Keeping these goals in mind will give you a clear idea on the right coverage amount to choose.
2.Plan Tenure
You choose a cover amount considering the term plan tenure. The time period for these plans ranges from 5 years to 80 years. Once you set the tenure, the premium is calculated and stays fixed for the remaining tenure. It makes sense to choose a tenure which goes up to your retirement. The longer the cover for your loved ones, the better.
3.Premium
It is the amount you pay in exchange for buying a term plan. One effective way to get an idea of the premiums is to use a term insurance premium calculator. Add in your details such as Name, Date of Birth, Annual Income, and Life Cover requirement; the calculator will display the premium amount you will have to pay.
4.Riders
You can increase your term plan’s effectiveness with riders. These are add-ons over and above the basic term plan. Some riders cover critical illnesses, some cover accidental death, and some cover illnesses pertaining to women. You will have to pay an additional fee for these riders. Choose well.
5.Online vs Offline
While you can buy a term plan with both ways, there is a benefit to buying it online. It is more convenient, endorsements are easy, and firms charge you a lower premium because online sales result in low infrastructure needs and decreased expenditure on agent commission.
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