Life is unpredictable, what happens tomorrow is totally out of your control. But the best way to deal with a disaster is to be prepared for it. Having a term insurance policy can help you protect the future of your family even in your absence. Investing in the right term life insurance can save your family from a financial crunch.
Having a term life insurance plan is considered the basis for every individual’s financial plan. Financial experts recommend that you must invest in a good quality term insurance policy early in life, preferably in your 20s. But most people find themselves unable to invest in such a plan before their 30s. When you are in your 30s having term life insurance becomes all the more important. At this stage, it is more likely that you are married, you have children, you have a place to live and there are many bills that you pay.
1. Choose the Sum Assured
You must chalk down your income as well as your liabilities when you are planning to invest in a term life insurance plan. Include:
- Monthly family income
- Monthly family expenditure
- Liquid assets you own
- Your financial milestones
- Cater for Inflation
2. Choose How You Want to Pay
Compare insurance plans offer flexibility. Depending on the kind of plan that you have opted for, you can make the premium payment on a monthly/ quarterly/ half-yearly/ yearly basis. Your bank may be instructed for automatic deductions.
3. Choose the Tenure
Deciding on the tenure of your term insurance is crucial as well, you need to know for how long do you wish to receive the coverage. A simple way to do so is to see when your liabilities would be over.
Tip: Avoid having an extra-long tenure as it would end up being too high
4. Choose the Add-Ons
The riders/ add-ons are also available at affordable prices. Pick only the ones that you think might suit your future needs. Most companies offer add-ons such as:
- Accidental Death Cover
- Critical Illness Cover
- Waiver Of Premium on Critical Illness
- Waiver of Premium on Disability
Tip: Make sure you read the policy documents carefully
5. Choose the Company
The company that you choose is another key factor you need to pay much attention to. The reputation that the company has built depends on its customer care, its claim settlement process and its procedures. It is therefore prudent to find out the company’s Claim Settlement Ratio as well as Incurred Claim Ratio when finalizing the plan.
No doubt, the 20s are a great time to start a term life insurance plan but that does not mean you cannot avail the benefits in your 30s. Remember, good-quality coverage that too at affordable prices is available throughout different age groups. But also keep in mind that if you carry the responsibility of your family, it is best suggested that you stop procrastinating and secure the future of your loved ones today.