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Get Your Ideal Term Insurance Policy in 10 Steps – A Comprehensive Guide

Term insurance stands as a crucial financial tool safeguarding your family’s future. This life insurance variant ensures a lump sum payout to your nominee if you pass away within the policy term. It combines substantial coverage, affordable premiums, tax advantages, and the flexibility to tailor the term and sum assured to your specific needs.

Here is how to get the ideal term plan.

Step 1: Assess your life stage and financial goals

Assess your life stage and financial goals. Depending on your age, marital status, number of dependents, income, liabilities, and future plans, you must determine how much life coverage you need and how long.

You can use online calculators or consult a financial advisor to help you with this step. For example, if you are a 30-year-old married person with two children, earning Rs. 50,000 per month, having a home loan of Rs. 40 lakhs, and planning to retire at 60, you may require a life cover of Rs. 1 crore and a policy tenure of 30 years.

Step 2: Compare different term insurance plans online

After determining your coverage needs, you can assess different term insurance plans provided by various insurers on the internet. Compare features, benefits, premiums, claim settlement ratio, and customer reviews to select a plan that aligns with your requirements and budget.

Step 3: Choose the type of term insurance plan

There are various types of term insurance plans available in the market, such as level term plan, increasing term plan, decreasing term plan, return of premium plan, and term plan with riders. You need to understand the pros and cons of each type and select the one that matches your requirements and preferences.

Step 4: Choose the policy term

The policy term is the duration for which you want to be covered by the term insurance policy. It should be long enough to cover your working years and consider your life expectancy. You should also consider your retirement age and the age of your dependents. A general rule of thumb is to have a policy term that is equal to or more than the difference between your current age and your expected retirement age. For example, if you are 30 years old and plan to retire at 60, you should have a policy term of at least 30 years.

Step 5: Choose the premium payment mode and frequency

The premium payment mode is how you pay the premium to the insurer. You can pay the premium either as a lump sum or in regular instalments, such as monthly, quarterly, half-yearly, or yearly. The lump sum mode allows you to pay the entire premium amount at once and eliminates the hassle of paying the premium regularly. However, it may not be feasible for everyone, as it requires a lot of money.

Step 6: Fill the online application form and submit the required documents

After selecting the term insurance plan and the premium payment mode and frequency, you need to fill out the online application form with your personal, professional, and health details. You also need to submit the required documents, such as identity proof, address proof, income proof, and medical reports, if any. You must provide accurate and complete information in the form and the documents to avoid rejection or delay in the claim settlement process.

Step 7: Undergo the medical tests

Depending on your age, sum assured, health status, and the insurer’s policy, you may undergo some medical tests to assess your risk profile and eligibility for the term insurance plan. The insurer may arrange the medical tests at your home or a nearby clinic, or you may have to visit a designated medical centre. You need to cooperate with the insurer and the medical professionals and follow their instructions.

Step 8: Pay the premium and get the policy document

Pay the premium as per the mode and frequency you choose and get the policy document either online or offline. You need to check the policy document carefully and ensure all the information is correct and per your expectations.

Read the policy document thoroughly and understand all the clauses and fine print.

If you find any discrepancy or error in the policy document, contact the insurer immediately and get it rectified. You can also cancel the policy within the free look period, which is usually 15 to 30 days from receipt of the policy document if you are not satisfied with the policy.

Step 9: Review your term insurance policy periodically

Once you have bought the term insurance policy, you must review it periodically to ensure it is still adequate and relevant for your changing life stage and financial goals. You may need to increase or decrease the sum assured, extend or shorten the policy term, add or remove riders, or switch to a different plan, depending on your circumstances and needs. You can contact the insurer or your agent to make the necessary changes to your policy.

Step 10: Inform your nominee and family about your term insurance policy

Inform your nominee and family about your term insurance benefits. You also need to keep them updated about any changes in your policy and ensure that they have access to the policy document and other relevant documents. This will help them to claim the death benefit easily and quickly in case of your demise.

Also, educate your nominee and family about the importance and benefits of term insurance and how it can provide them with financial security and peace of mind in your absence. You should also advise them.

Conclusion

Having term insurance is like a safety net for your family if something happens to you. You can find the best plan by figuring out your current life situation and preferences, exploring different plans online, and paying the premium.

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