A term insurance policy is a life insurance policy that offers financial coverage to any of the family members/beneficiary of the insured, for a specific period. In case the insured meets an unfortunate death as a result of an accident, under the term insurance plan, the insurer will offer the claim amount to the policy beneficiary. The insured amount may be offered in lump sum or on a monthly income basis, depending on what the insured has opted for under the policy. Because of the policy’s flexibility in terms of the policy tenure, it is one of the popular life insurance plans available. In case you want to avail term insurance, you need to compare plans offered by various insurance based on certain parameters. You can visit third-party insurance websites and the official website of the insurer at your own convenience and compare the policies. Following are the parameters that you need to look out for when comparing policies:
When you purchase a term insurance policy online, affordability of the cover is a major factor you need to look into. The features and benefits that the cover offers you should justify the premium you pay. Affordability of the plan should not be taken lightly, you need to avail a plan that gives you maximum features and benefits at the right price. Hence, it is important that you compare the plans based on the price as well.
Claims settlement ratio is a parameter that exhibits an insurance company's capacity to settle claims and within the agreed time. The Insurance Regulatory and Development Authority of India (IRDAI) lists the insurance firms and their corresponding claim settlement ratios on the official website. An insurance company with a good claim settlement ratio should be favoured, since it indicates that there is a higher chance your claim will be settled at a time when you are in most need of the financial support that the policy offers.
Before you go ahead and purchase a policy, it is vital that you compare the overall time taken by the insurer to settle your claim. Another point to look into, is the simplicity of the claim settlement process. You don't want the claim settlement process to be difficult, especially when you are in need of the policy coverage during a time of emergency. It is important that you visit the insurer’s online website and read the claim settlement process mentioned on the site thoroughly.
Solvency ratio is nothing but the ability of the insurer to cover all the liabilities as mentioned under the policy. A solvency ratio exhibits the financial health of the company. It determines whether the company is in a situation of bankruptcy or not, and if it has the financial capacity to settle your claim when the time comes. An insurer with a good solvency ratio should be preferred always.
A company’s reputation and reliability is also an important parameter when deciding which term insurance plan to purchase. It is important that you do research and see if the insurer you choose has a good reputation, and whether or not it can be trusted. You can ask around, visit the branch offices, go through their official website, etc. to determine whether the insurer will help you at in times of need. A well reputed and established insurer will surely be reliable.
The maximum tenure for which the plan can be availed is another important parameter to go by. You need to determine how long you want the plan for and how much you can afford to pay, before you go ahead, and purchase the plan. Choose a firm that offers you the policy tenure as per your requirement or offers a number of tenure options to choose from.
Every policy comes with certain exclusions that may be a disadvantage to you at the time of claim settlement. This is where availing add-on covers will save you. Choose an insurer that offers add-on covers with your term insurance policy. Availing add-ons will extend the coverage you have availed, by including the corresponding policy exclusions. You might have to pay additional premium depending on the add-ons you are topping-up your policy with.
The number of critical illnesses covered under the policy is another parameter that you need to go by when choosing term insurance. Not all insurers cover the same number of or the same critical illnesses. Critical illness coverage varies from insurer to insurer. Hence, it is necessary to check if most of the illnesses are covered under the policy, especially for the money that you are about to pay. A term insurance plan is supposed to safeguard your life at a time of emergency, hence knowing what and how many of the illnesses your policy covers, is of grave importance.
Some of the insurers offer additional benefits such as:
In case you become permanently disabled, anytime during the course of the policy, the insurance coverage will continue without you having to pay the premium for the same.
Under this benefit, an increased claim amount will be offered to your family in the event of your unfortunate death due to an accident.
Under this benefit, the insurer will pay your family members the insured amount on a monthly income basis instead of offering it in lump sum. This benefit will only activate in the event of your death due to any accident.
These additional benefits are something that you need to watch out for when purchasing a term insurance plan.
The features of the plan are as important as the benefits offered under the plan. It is vital that you go through the features of the plan before you decide on which policy to avail. A plan with good features will aid you in times of need. The features as well as the benefits that the plan comes with, should justify the insurance premium you pay. Compare different plans based on their features to avail the best insurance policy.
Most of the insurers today offer the option of online purchase which is a convenience to all. You can simply visit the third-party insurance website or the official website of the insurer to make the purchase. Insurers save a lump sum on online purchases which are passed on to the customer in the form of discounts on insurance premium. Purchasing a policy online is one of the means by which you can save on your insurance policy.
The above-mentioned parameters can help you avail the best term insurance policy as per your requirements, at affordable prices. The coverage and policy period offered will vary from insurer to insurer. It is advisable to read your policy document thoroughly before purchasing the same.
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