Life is uncertain, and you are always at the risk of untimely death. And if you are the sole breadwinner of the family, your family could lose its only source of income. In critical situations like this, your savings would not be sufficient to meet all your financial liabilities. This is where a term insurance policy plays a pivotal role. A term life insurance policy guarantees financial security and assists your family in dealing with the financial loss. Today you also have the convenience of taking an online term plan. Irrespective of where you are taking your term plan from, it is important to be careful of certain factors to make the right decision.
Determine Your Coverage Need
Before you go out to purchase a term insurance plan, be clear about the coverage you will require to meet your family’s needs in case you meet with an untimely death. Following are the steps that you need to consider when calculating the coverage –
- Estimate the monthly expenses of your family and then multiple it with 150 (future inflation).
- Add the liabilities you have, such as personal loans, home loans, credit card bills, etc.
- Subtract the liquid assets you own, such as mutual funds, stocks, fixed deposits, etc.
- Include the expenses associated with important life goals.
- Add the retirement corpus for your spouse.
Select A Credible Insurance Provider
When you are looking for a term insurance plan, the importance of a credible insurance provider cannot be overlooked. Search for the top insurance companies online and read through their website. Owing to digitalization, comparing term insurance plans by different providers has become easier than ever. Ensure to read each and every fine print properly and understand them. Based on the offerings, compare various providers, and determine who is able to cater to your needs in the most efficient manner.
Consider The Tenure
You must decide how long you want your coverage to last. You do not want the policy period to be too short; then, you will not be able to fulfill all your financial obligations. And when you extend your policy for too long, you end up bearing a high premium. So you have to find a middle ground which allows you to get the benefits without restricting your financial freedom. Many websites today have a term plan calculator, which allows you to calculate the premium you will be paying based on the coverage and tenure. This offers a simple way to determine the tenure of your term insurance policy.
Term life insurance policies offer different types of add-ons at reasonable costs. Ensure to consider them as they may provide add-on benefits. The premiums of various add-ons vary based on their nature. Therefore, research about the additional benefits and consider whether or not they are worth the premium charged.
Term life insurance is an important investment that will protect your family. Therefore, it is important to choose your term insurance provider carefully to get the most out of money.