Buying a term plan is considered as a crucial financial decision towards strengthening your portfolio. Primarily, term insurance plans are available at a lower premium than other life insurance products available. Furthermore, with a term plan, you can ensure a lifetime worth of financial security for your loved ones, even if something happens to you. In case, something happens to you within the policy tenure; the term insurance coverage will help your family stay financially independent and take care of their day-to-day expenses, along with other financial liabilities.
One common question people ask is about leveraging a term plan to maximum advantage. Before you decide to buy a term plan, first estimate the premium payable for the coverage that you desire, using an online insurance calculator.
To get maximal benefits from your term plan, you require an in-depth knowledge of how life insurance works. Apart from using an insurance calculator, you can also seek help from an insurance advisor to make the right term plan buying decision. Follow these five ways to ensure maximum financial security for your family under a term insurance policy:
1. Choose an Adequate Sum Assured
The term insurance policy you buy is meant to provide for your family members when you are not around. Since the household expenses and other financial liabilities are not the same for all, the term policy should not be the same either.
Before you buy a term plan, assess your family’s needs, and take into account the effect of inflation, and use an insurance calculator in India to determine your insurance buying needs and premium paying capability. For instance, if you are the only breadwinner in your family, then consider the regular monthly expenditure, education expenses for your kids and other liabilities like existing loans.
Keep in mind that purchasing a term plan with inadequate life cover defeats the sole purpose of providing financial security to your family. So, be careful while you select the sum assured of a term plan.
2. Select Critical Illness Rider
A healthcare emergency has the power to drain off all your savings in less time. Given the rising risk of healthcare ailments in India, you cannot say what will happen to you in the next moment. While a base term plan offers a death benefit, it does not cover any medical contingencies in its inclusion terms.
However, you can add a critical illness rider to your term plan to cover the exorbitant costs of getting treatment for various life-threatening illnesses. Since this rider is available at an additional premium, compare the difference between the total premiums with or without including it using an insurance calculator in India.
Term insurance plans allow you to choose a significant coverage, additional protection against critical illnesses and a lifetime of financial security.
3. Include Waiver of Premium Rider
Buying a term plan for your family can be considered the first crucial step. What matters alongside is the timely payment of policy premium throughout the chosen payment term. Failing to do so may cause your plan to lapse over time.
However, in case of an unfortunate happening in life dismemberment resulting from a severe accident, you may not be able to pay the premium. One way to ensure that the policy is continued against such eventualities is to buy a waiver of premium rider alongside.
Under this rider, you can avail of waiver of all future premiums in case of some specific unfortunate events defined in the rider terms. Since the cost of this rider may vary from one insurer to the other, you are advised to use an online insurance calculator in India to get an estimate of the premium.
4. Choose Return of Premium Option
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Many people expect the term plans to offer survival benefits along with the death benefit. But a base term plan only comes with the death benefit, meaning you will not get any insurance benefit if you survive the plan tenure. One way to strengthen the term policy in this aspect is by including the return of premium rider in it.
Term insurance with a return of premium feature is best suited for those who live a healthy, positive lifestyle. Since the chances are high that they will outlive the term plan tenure, they get the premiums paid back on survival against the odds in their lives.
- Term plan premium varies as you select the riders. So, make sure you use an insurance calculator to calculate your term plan premium with or without riders.
- Riders are available at an extra cost. Thus, the selection of riders should be based on your specific needs.
- The choice of a reputable insurance company is also crucial to help your family members avoid financial stress after you.
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