Getting a term plan can be confusing for some if they do not know the whats and whys of insurance. There are various tricks to choosing the best from the numerous plans available in the market. So, here are 6 tips to help you get yourself the perfect term insurance and safeguard your loved ones.
1. Consider the Number of Family Members You Have
It may just bAe your spouse and your parents for now but you might be planning for a child. Hence, the number of dependent members have to be considered while getting a term plan, as your spouse cannot care for the entire family. You also have to think of how dependent these members are as well. You may have a kid who will soon be moving to college. In this case, you can just account for the college education expense. Such parameters will aid you when choosing from a number of term insurance options and buy the most favourable policy.
2.Understand our Family’s Lifestyle
Everyone follows a lifestyle where they like to pursue certain hobbies and get themselves things without worrying about money. But in case something unfortunate happens to you, the financial stress shouldn’t affect your family such that they would have to give up their lifestyle. For this reason, you have to understand your family’s lifestyle and account for that in your life insurance policy.
3.Remember Inflation During Your Calculations
Inflation can cause a rise in prices such that the sum assured just ends up covering your family’s most basic requirements. This can cause your children to give up their dreams of an Ivy League College or your spouse’s dream of having their own business. Considering inflation while calculating the death benefit can help big time in securing the future expenses of your family.
4. Buy From Insurers with High CSR
While getting your term insurance, you need to consider insurers with good reputations and high Claim Settlement Ratio (CSR). CSR indicates the possibility of your claim getting accepted and hence, higher the ratio, greater the chance of your claim getting settled. This value can be found from the government’s official website which release these numbers every year.
5.Get Plans That Allow Adding Riders
Though most insurers provide various riders, all of them cannot be bought for certain policies. Riders are add-ons that you can buy with your term plan and maximize your coverage. By getting these additional covers, you can secure yourself during those uncertain situations and protect your family. The riders give a lump sum or regular payouts to cover your medical costs and other indirect expenses. So, choose a type of insurance policy which will allow you to add crucial riders.
6. Account for Your Liabilities
As you traverse through life, you are bound to take loans and accumulate debt. But you cannot leave such debts for your spouse or family and have to account for it in your policy. In this way, your family can pay off the liabilities without any financial strain.