While selecting the best term plan in India, people tend to compare the prices of different term insurance plans. Although price is an important factor, by giving it too much importance, you can end up compromising the financial safety net of your family. Thus, it is very important to decide on the right term insurance and the best term plan company.
If you are not sure about the points that can help you decide on the best term insurance plan as per your requirements, we have a list of points that might help you.
5 Features to Keep in Mind While Deciding the Best Term Plans
Here are five points that you must keep in mind while deciding the right term insurance plan for yourself:
- Claim Settlement Ratio
One of the ways to choose the best term plan company is to know the claim settlement ratio of the company. The CSR is the ratio of the claims settled by the company in the year to the total number of claims that it received. If the claim settlement ratio of the company is higher, there is a high chance that the company will settle the claim in case of your untimely death.
The main reason for buying a term plan is to ensure that your family is financially protected in your absence. Having a higher CSR means better security for your family when you are not there. You must check the total claims that the insurer has settled.
- Solvency Ratio
The insurance company’s solvency ratio is an indicator of whether the company will be financially sound to settle the claims if there is a need to do so. The IRDAI has mandated that every company should have a solvency ratio of at least 1.5. In case a disaster happens, the insurance company will receive multiple claims.
Since the insurer has to settle a large number of claims, the solvency ratio becomes important. The financial safety of your loved ones is dependent upon the financial status of your insurer. Thus, consider this while you decide on the best term plan in India.
- Critical Illness Cover
While you buy a term plan online, it is essential to check whether the term insurance plan offers a critical illness cover. Any critical illness like cancer or kidney failure can cause financial liability to your family. Having a critical illness cover ensures that you get a lump sum amount when you are diagnosed with any of the listed critical illnesses.
The amount that you receive can help your family pay off the hospital bills and also cover their day-to-day expenses. Also, the premiums that you pay towards a critical illness cover can be availed for tax deductions under Section 80D of the Indian Income Tax Act.
- Availability of additional covers
Term insurance plans come with a life cover to help your family become financially stable in your absence. If your goal is to ensure the maximum financial safety of your family, you must opt for extensive coverage and additional benefits. While you buy term insurance online, it is essential that you look at the add-on benefits. Some of the add-on benefits that you can get include a waiver of premium benefit, income benefit, and accidental death add-on cover.
For example, with Tata AIA term insurance, you can choose optional riders that provide coverage for accidental death, critical and terminal illness, etc. But, you must remember that these add-on covers come at an additional premium, so choose the ones that you think are necessary for you.
Once you have taken the above mentioned considerations into account, now you must evaluate the premiums that you need to pay for the best term insurance plan. Ensure that you do not compromise on the coverage of your term insurance plan just to save some money. Also, choose the right add-on covers as they also increase the premiums that you need to pay.
These are some of the major points that you must consider while choosing the best term insurance plan for yourself. In case you are the sole breadwinner of your family, a term insurance plan will make sure that your family can substitute your income when you are not there. In addition, it will ensure that your loved ones live a dignified and comfortable life when you are not there. So, compare different plans, research the insurance company, and purchase the best term plan in India.