Things to keep in mind before your choose term insurance

Everybody knows term insurance as one of the most economical, best & purest form of insurance. It cannot be considered as an investment, but can be used as a financial tool which will take care of your financial burden in case of unprecedented events like death or critical illness. Before you narrow down on the best possible insurance plan, make sure you keep in mind the below mentioned factors.

Term insurance does not guarantee returns:

First and foremost, unlike money back policies, term insurance does not provide returns. All premium paid towards term policy are purely reserved to cover your life. The only returns you are assured with is peace of mind and financial security.

Know you need and buy a cover accordingly:

This is undoubtedly one of the most important factors to keep in mind before opting for a term insurance plan. Buying an insurance is one thing but to critically evaluate the amount of the coverage is highly important. Ideally a person should go for coverage that is equal to 6 to 10 times of his/her annual income. It is highly advised to take the help of a financial planner who can calculate the exact cover amount looking at your financial status.

Take a good look at the claim settlement ratio:

This is a key factor to look into before opting for any kind of term insurance plans. It would be a complete waste of your efforts if your insurance providers rejects your claim for any XYZ reasons. The claim settlement ratio is the number of claims an insurance provider has successfully settled and disbursed. So, higher the ratio, more the chances of your claim getting disbursed.

Low premium rates isn’t always the best:

Insurance companies need to consider a lot of factors before they firm up on the accurate pricing of insurance premiums. So, it is not necessary for the policy with the lowest premium to be the best choice. Pricing should only come into picture once you have narrowed down on a couple of policies & it should never considered as your crucial deciding factor.

Look for rider benefits:

Majority of term policies offer rider benefits apart from the death benefits such as coverage in case of permanent disability or coverage for critical illness. You can look at different insurance policies and analyse the rider benefits, which is best when it comes to additional cost and overall benefits.