You work hard to provide a comfortable life for your loved ones. However, there is no certainty in life, and an unfortunate event may completely change the circumstances for your family. An accident, critical ailment, or any other event can strike without warning, which can result in financial difficulties for your family members.
Therefore, it is important to create a backup plan, to ensure their financial stability. One of the best options is to avail of life insurance coverage. This type of insurance will pay the benefits to your nominees in case of your sudden absence during the policy duration.
A term insurance policy is the most affordable type of life insurance plan. You may ask “what is term insurance”? It is a pure life cover that pays the benefits to your nominees in your absence during the policy tenure. Most term plans do not offer maturity or survival benefits, which makes it an economical option to procure a higher sum assured (SA).
When you want to buy insurance coverage, you wish to reduce the premium. Although reducing your cost is important, you need to consider other features to maximize the benefits for your family in your absence. Here are six features, which you must check while buying a term insurance plan:
Flexibility in paying the benefits
Generally, term plans offered a lump sum payout of the policy benefits in case of an unfortunate event. However, this may not be a suitable option, as your family may not be capable of managing a large corpus. Therefore, several insurers now provide you with the convenience to opt for periodic payments of policy benefits to your nominees.
In this case, the insurer pays a certain part of the SA as a lump sum. They pay the balance sum in regular installments over a pre-determined period. Receiving a timely payout helps your family to meet their normal expenditures to sustain their lifestyles without having to worry about managing and investing a large corpus.
Return of premium
Term plans do not offer any survival or maturity benefits, which is why you may hesitate to buy this policy. However, many insurance companies now offer term plans that return the premium at the end of the policy period. Before you choose a term insurance with return of premium plan, remember that the cost is more for these policies.
Many insurers allow you to enhance the coverage of your base online term plan through riders. It can be beneficial if you select additional riders based on your family’s requirements. If you travel frequently or work in a risky environment, you can invest in an accidental cover rider for higher benefits. If your absence results from an accident, this additional rider will pay the benefit over and above the SA to your nominees.
Critical illness cover
Treating critical illness is expensive, and the treatment may last for a prolonged tenure. A health policy will only cover the hospitalization expenses, which is why it is advisable to include a critical illness rider in your online term plan. When you are diagnosed with an ailment, the policy will pay the rider benefit as a lump sum, which you can use for treatment or any other purpose.
A large number of insurers offer discounts and rebates if you opt for a higher SA. Additionally, women and non-smokers enjoy lower premiums due to lesser risk. Check these rebates and discounts offered by different insurers to choose the best term plan.
Multiple premium payment choices
You must buy a policy that offers flexibility in paying the term insurance premium. Insurers offer monthly, quarterly, bi-annual, and yearly options, which allow you to choose one that suits your financial situation.
It is recommended to buy an appropriate term plan to ensure the monetary well-being of your dear ones. Take time to research various options and make an informed decision.