Things to consider while buying Term Plan online

Things to consider while buying Term Plan online 

A term plan is an investment that will allow your family to rely on a stable source of income in case of your unfortunate demise during the tenure of the policy. The best way to invest is to get a term plan online. Purchasing a term plan online allows you to consider several options at once and allows you to be the best judge of the investment you will make. The purchase of a term plan online provides you with the opportunity to avail the service from the convenience of your home; it saves time and is hassle-free.

Here is a list of things you need to consider before purchasing your term plan online:

  • Calculating your term insurance needs:

Your term plan should be based on estimated calculations of the amount that your family will require after your demise. Estimate your monthly expenses and consider certain funds that can be used by your family in situations of emergency. The rule of thumb is to multiply your monthly expenses by 150 and account for inflation as well. 

  • Determining the tenure of your term plan online:

Once you have estimated the coverage of your term plan, you can move towards the next step of getting your term plan online. The next step is determining the period for which you will need a term plan i.e. the tenure. The best way to estimate your tenure is to determine by what year your liquid assets are worth more than your term plan cover after subtracting all your liabilities. The age at that period will be your tenure. 

  • Targeting the best value of money for every penny invested:

For choosing a term plan online you could be faced with a dilemma of what service provider to go for. One of the easiest ways to tackle this dilemma is to research about the stability of the insurance service provider by considering various parameters that include the rate of claims issued, client base, tenure, and stability of the service provider. The stability of the insurance service provider is a key aspect as a term plan is a long term contract between you and the company. 

  • Learning about add-ons and using them wisely:

Add-ons or riders help you squeeze in extra value from your term plan in certain specific scenarios. They can be availed in scenarios like additional cover for accidental death, covers for critical illnesses, waiver of premium for any disability, and waiver of premium for certain critical illnesses. 

  • Comparing the claim settlement ratios:

A claim settlement ratio helps you understand the approach of the insurance service provider. If the ratio is high and healthy, it indicates that the service provider is in the business of providing welfare to its clients and is truly working to make lives better for its clients. If a company has a claim settlement ratio above 95%, then it is an indicator of an efficient claim settlement process. 

Term plans are a long-term contract between you and the insurer. This requires a sizable investment of both time and money. Therefore, proper and thorough research must be conducted before investing.

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