Term insurance plans have been getting increasingly important in the recent Covid pandemic era. However, the benefits of a term plan will be available to the full extent when you understand the product and use the features well.
For understanding the coverage to using a term insurance premium calculator, here are nine questions you must ask before purchasing an online term insurance plan.
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What is the purpose of a term plan?
A term insurance plan provides the sum assured to your nominee if you meet with an unexpected death during the policy term. It is provided to your family against the premium amounts paid by you during the policy tenure.
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What is covered and what is not covered in a term insurance plan?
A term plan will cover natural death or death due to unexpected health emergencies. Additionally, accidental death or any treatment charges related to a critical illness or terminal illness is also covered when you opt for the right rider option. However, death due to a terrorist attack or a natural calamity will not be covered.
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What is the right age to purchase a term plan?
The right age to purchase a term insurance plan is during your 20s. The insurers calculate the premium and the sum assured based on the probability of death risk. It is based on your habits, family medical history and the extent of pre-existing illness present in your body.
At a younger age, you are not bound to get affected due to these factors, and the death risk is extremely low, providing a lower premium rate. You can use the term insurance premium calculator to identify the most affordable premium amount for the required sum assured at the expected policy tenure.
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Does the term plan get rejected if death occurs outside India?
If you have migrated to a different country and informed the same, the insurer might consider the case. However, if you migrate to a war threatened country like Pakistan, Afghanistan, etc., the term plan might get revoked.
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What are the rider benefits in term insurance?
Riders are additional benefits provided to enhance the offerings under a term plan. Some prominent add-on rider options are critical illness rider, terminal illness rider, a total and permanent disability rider, etc.
For example, the insured amount paid under the critical illness rider can come in handy to pay the medical expenses and hospitalization charges associated with diagnosing a critical illness during the policy term for the first time.
TATA AIA term insurance provides various rider benefits to provide maximum protection to you and your family members.
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How should you determine the required sum assured?
While calculating the sum assured, you should consider your current steady flow income and the various short-term and long-term financial goals. Account for the inflation rate too. It is generally preferred to be at least ten times your current income.
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Does a term plan have a maturity benefit apart from a death benefit?
The term plan is not entitled to provide a maturity benefit. However, based on the terms and conditions of the policy assured by the insurer, you can either extend the policy term or get the refund of the paid premium amount using the return of premium rider option or plan.
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How do lifestyle habits affect your term insurance product?
If you have a life-threatening habit such as smoking or drinking alcohol excessively, it should be informed to the insurer. The death claim can get rejected if the death occurs due to it and is not informed prior.
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How to get the best term life insurance plan?
Compare term insurance plans based on the features, benefits and, more importantly, the claim settlement ratio before choosing the term insurance plan.
Conclusion
Term insurance plans provide varied features and can be customized based on your personal requirements. The nine questions discussed above are some of the prominent ones and can be extended based on individual needs. Understanding the policy terms appropriately and getting cleared on the various doubts help you use the plan optimally!
