5 Questions to Ask Yourself Before Buying Term Life Insurance

Term insurance is the most basic and important insurance cover one can buy. It offers a decent sum assured over a predetermined premium cover that helps the family cope in case of an unfortunate event. Apart from this, an online term plan is also the most economical form of insurance that comes with a Section 80C tax deduction benefit. Yet, not every plan suits all individuals. This is why it becomes important for everyone to ask themselves the following questions to make sure that they buy the best term plan.

 

  • Should I buy term insurance?

 

The first question that comes to mind is whether you should buy term insurance or not. To answer this question, you need to have a basic understanding of the concept of insurance. Term insurance is the simplest form of insurance that focuses on covering the life insured with the sum assured. The entire premium that you pay goes into your life cover. The best term insurance is the one that ensures complete payment of the sum assured and ensures that adequate funds are not an issue for your loved ones even when you are not around. 

 

  • What is the right time to buy term insurance?

 

Now is the right time to buy the best term insurance. Given the uncertainty and unpredictability of life, it is of utmost importance to ensure the well-being and comfort of your loved ones in your absence. As you age, medical requirements rise, which in turn can affect the premium amount. The younger you are, the lesser the premium will be. You can compare an online term plan offered by different insurance companies and pick the best offers and prices. 

 

  • How to decide the sum assured?

 

Sum assured can be determined by factoring in several components like age, family income, number of dependents, and the number of earning members in the family. Loans and liabilities are also important factors to be considered while deciding the amount of sum assured for your term plan. Once you have an idea of all these factors, you can then think of a round figure that will help your family in fulfilling their daily needs. You must pick a figure that is adequate to meet all kinds of liabilities and at the same time enough to combat inflation. 

Upon finalizing the sum assured, your premium amount will be calculated which will also be gauged against risks like lifestyle diseases such as heart attack, diabetes, age-related health issues, and diseases arising from habits like smoking, drinking, chewing tobacco, etc., to ensure you buy the best term insurance. 

 

  • Should I go for a term insurance rider?

 

A term insurance rider is an add-on to the basic term insurance policy that accounts for covering up certain aspects that the basic policy leaves out. There are several riders available like critical illness rider, family rider, permanent disability rider, etc. These riders allow the insurance bearer to ensure an added coverage in case of an accident that may lead to a disability of temporary or permanent nature by including the family under the same term plan.

Riders can be chosen depending on your needs and family’s requirements. You can also opt for multiple riders on your basic term plan. 

 

  • Should I go for an online term plan or pick one offline?

 

Term plans these days can be bought in two ways- online and offline. Traditionally, term insurances were bought offline by visiting the insurance company’s office or via an agent. This often ended up in increased intermediate costs and commissions. 

On the other hand, an online term plan is the best term insurance you can buy as it is comparatively economical. It involves no intermediate costs, and you can compare the term plans offered by various companies before picking one. 

Conclusion

A term plan is one of the best ways to ensure a secure life for your loved ones in your absence. One must practice due diligence before buying the best term insurance. Make sure to ask yourself these questions before you pick an online term plan. 

 

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About the Author: Paul Petersen

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