Life is always full of uncertain events, and those go without warning. Any form of life insurance or term insurance plan will work out as a cushion for safeguarding your family’s financial condition against any form of uncertainty. Such plans will act as a major income replacement for all your family members. But, when it comes to purchasing one such term plan, most of you are confused with so many life covers to choose from. Right from the policy period to the right insurer to choose, it can get a bit too confusing with the choice to make. There are a few significant tips, which will make it easier to make the right decision.
Focus on the life stage and number of family members while determining cover amount:
The dependant family members might vary at multiple stages of life. The financial responsibility of a single individual won’t be the same as that of a married one or anyone with kids.
- The cover amount must be chosen based on the life stage and the number of family members living there.
- Make sure to focus on the future always and then plan for increasing financial responsibilities accordingly.
Think the amount that your family needs for maintaining a lifestyle:
While working your way on the dependent family members, the cover extent will largely depend on the present lifestyle of the family. You get the chance to assess the funds, otherwise needed to sustain the present lifestyle. Moreover, do not forget to factor in the inflation and then chalk out the life cover accordingly. It all depends on what you want and how much money you are looking for.
Determine the cover amount based on family needs and not quite on your income:
Whether you are playing the role of the sole breadwinner of the family or just a contributing member to collective family income, always aim for a cover amount, which is equal to the income amount, and needed to sustain daily bills for your family.
So, always think of the amount that your family needs to survive rather than focusing on your income plan, as that isn’t enough!
Don’t forget to add liabilities that you have to cover:
All the individuals, who are earning, are always under the burden of current liabilities like personal loans, short-term loans, car loans, and home loans. For preventing any burden of the EMI repayment from falling on the family, it is vital to include the repayable amount of the outstanding loans in the availed life coverage plan.
Always aim for higher claim settlement ratios:
To offer monetary reimbursement, the online term plan companies will have effective forms of claim settlement plans.Â
- The claim settlement ratio is a numerical value, which will focus on claim numbers settled against those filed.
- If the claim settlement ratio is higher, then you have better chances of procuring the entire sum assured amount.
Make sure to deal with these plans now, and then you get to focus on the best term insurance plan to choose. Simple tricks will go a long way, especially to help you make the right decision.
