Term Life Insurance: 4 key points to select
Today I am going to tell you about some of the steps by step key points on how to select term insurance.in this article, I will tell you about the big question of what is term insurance who can take, it what are the minimum ages and maximum ages, etc. What is the maturity of term insurance
But before proceeding to the article make sure you would check other articles also which will be helpful for your investment and insurance decisions.
Term insurance is a type of insurance which only provides you safety and risk cover this is not a type of insurance you bought for investment or to get gain of bonuses on your Corpus. These policies never get maturity.
Term insurance is bought for peace of mind to get free from your liabilities and loans In case of any mishappening. The premiums are very low in the term insurance and risk cover is always high but there is no maturity in this type of insurance. the only USP of the term insurance is its low price.
The premiums of term insurance also depend upon age, habits, profession, and income sources. A person can get maximum insurance about 20 times his/her annual income. Educational qualification requirements vary according to the amount of Insurance cover.
The minimum age for term insurance is 18 years and the maximum age for term insurance is about 65 years and companies provide a minimum term for insurance of 10 years and a maximum of 40 years, some of the companies also provide cover for the term of 45 years or up to the age of 85.
Now let us discuss the steps to select the term insurance there are some key points which A person should follow before buying term insurance. You should do complete market research before buying term insurance because it is a product of life, it means you are going to pay for a whole life you should select a product which would be easy to understand easy to buy, and also it should be easy for your survivor after you.
Steps to consider before buying term insurance
step 1 CSR: CSR is mainly known as the claim settlement ratio, higher the percentage of claim settlement ratio means the company is more willing to pay the claims submitted by the customers. you should always select a company that has higher claim settlement ratios. A higher claim settlement ratio also increases the chances to settle easily you are claims also so always select a company that has a ratio of more than 95%.
Step 2 Pricing: Pricing of term insurance premium is also a matter, some of the company provides very low prices and some provide a higher price for the same amount of insurance cover but you should check about the claim settlement ratio. some times the companies with low-cost premium have low claim settlement ratios.
Many times pricing also include rider benefits you should properly check about the rider benefits added in the policy sometimes there are in build riders or sometimes these are additional and sales executive don’t tell you about the additional charges.
They will tell you the Rider rate with premium and it cost you many more so please ask for this to the sales executive.
Step 3 Claim rejection ratio: Most of the time when we are buying term insurance, we consider all the steps but we never check about the claim rejection ratio of any company. This is considered as the number of claims rejected for every hundred claims arisen. You should never consider a company that has more than one percent claim rejection ratio.
Step 4 Longevity in the market: Before buying a term Life Insurance, as I mentioned above that Life Insurance is for the lifetime thing, you should select a company that would stay in the market at least for our life which means we should go with the trusted brands. There are many examples in India where the companies are joint ventures of Indian counterparts and foreign counterparts some of the companies keep changing their foreign counterparts or partners from time to time.
It means taking a term life insurance for the term of 40 years does not guarantee you that the company will stay for 40 years in the market so keep your market research notes and select wisely for the term insurance company.
So friends the above steps are a must-do before buying a term Life Insurance. We should do good market research checks about CSR Rejection ratios, claims arising, and longevity in the market. Use comparison websites talk to Executive and I will advise you should talk at least three to four different executives before selecting term insurance.
After selecting a term insurance product and before buying it, you should tell the company about your habits like smoking, no smoking, drinking, any risky profession for other existing diseases. You should never hide any material fact or previous health issues about you, before taking any type of insurance.
Because in case of a claim, the company always do an inquiry about the claim if they found any fraud on life then the claim can be rejected. This is the main reason for the claim rejection of many companies.
Personally I would go with Life Insurance Corporation of India
Hope many of you got an idea of how to select term insurance and can advise your near ones. Who are confused about selecting term insurance and don’t know how to select and what are the parameters.
here is the link to our article about selecting a Health Insurance policy you can check it out also