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Choosing The Right Term Insurance Plan

Term insurance is the purest form of insurance that you can get for yourself. However, it is important to evaluate your needs and also follow certain processes which can help you in choosing the right term insurance plan for yourself.
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Planning for the future is something which many young people delay in doing. As sad as it may be, but death is an eventuality which each one of us has to deal with, some time or the other. As one moves forward in life, many changes take place, which also bring about a change in the number of responsibilities one shoulders. A young and unmarried person will have relatively lesser responsibilities as compared to someone who is married and has children. In case of the latter scenario, having a back-up plan which provides protection to your family in case of a mishap is an absolute necessity.

If you are seeking a simple and uncomplicated protection plan for your loved ones, a term insurance plan can be an ideal option. Term plan are very simple in their working, making them very easy to understand. This plan will offer financial protection to your loved ones in the unlikely and unfortunate event of your sudden demise.

There are several insurance companies in India which offer a variety of term insurance plans tailored to cover a variety of situations. Term plans can be classified under 4 basic types – level term plans, increasing/decreasing term plans, return of premium plans, and monthly income plans. The real challenge, however, lies in choosing the right insurer and the right plan. The aim of this article is to help you identify the various aspects and elements of a term plan and choose the one which best fits your needs.

Assess Your Needs:

The very first step involved in the purchase of an insurance policy is assessment of coverage needs. Calculate the amount of coverage you think your family will be comfortable with in the coming years and then set out to look for plans accordingly.

Which Term Plan To Choose:

As you make progress in life, your financial situation will change. Choose a term plan takes these hanging situations and needs in mind. Here are the differences between the 4 types of term plans and how they might be helpful.

  • Level term insurance - Under this plan, the premium amount remains fixed throughout the policy term. This is a regular term insurance plan.
  • Decreasing term insurance – Different life stages are marked by different liabilities. During early years, one may have the responsibility of loan repayments, children, siblings, or aged parents. However, with time, after your children and siblings can support themselves and loan repayments have been successfully completed. You have lesser dependents to look after. This will automatically lower your insurance coverage needs. Decreasing plans are ideal for such situations as the sum assured amount decreases by a fixed percentage each year.
  • Increasing term insurance – Under this plan, the sum assured amount will increase by a pre-set percentage to take care of increasing costs due to inflation. Increased costs need a higher cover and this is where increasing insurance plans come in useful.
  • Monthly income plan – Under this plan, the sum assured benefit is paid out in regular monthly instalments to help the depends take care of monthly recurring expenses.

Term Insurance Premiums:

Premium is an important factor which heavily influences one’s decision is purchasing or not purchasing a plan. Premiums charged for term insurance plans by various companies are quite varied. However, pricing does not define the efficiency of a plan or the reliability of the provider. An expensive plan will not necessarily mean the plan will offer the best benefits. Similarly, a relatively inexpensive plan won’t necessarily be useless either. However, when purchasing a plan, do not let pricing be the prominent factor. Compare and select the plan which provides the best coverage and benefits, even if it is more expensive than what you’d be willing to shell out. Also, look for term plans online as these are usually significantly cheaper than their online counterparts.

Term Insurance Riders:

Besides death, there are several other risks such as accidents, critical illness diagnosis, accidental disability, etc., which can threaten the financial stability of your dependents. A rider is an add-on benefit which helps protect from such risks and can be attached to the base policy on the payment of an additional premium. When choosing an insurer, consider one which provides you with multiple rider options. Some of the common types of riders available are Accidental death rider, Premium waiver rider, Accidental disability rider, Accelerated sum assured rider, Critical illness rider, and Hospitalization benefit rider.

Term Insurnace Claim Ratio:

Another important factor which must be considered when buying insurance is claim ratio. Before you shortlist an insurer, make sure you check their claim ratio which is basically the total number of claims registered versus the number of claims settled by the company. For example, if an insurer has received a total of 100 claims and they honour 90 of those claims, then the claim ratio would be 90%. This is an important indicator of the company’s intention with respect to claim settlements.

Term Insurnace Customer Service:

When purchasing insurance, make sure you also do some research on state of the insurer’s customer service department. After all, once you have bought the policy and may have an issue, the efficiency of the customer care will decide how fast or slow your issue is resolved.

Term Insurnace Solvency Ratio:

Another indicator of a company’s capability is its solvency ratio. As per the rules laid down, an insurance company must always have a higher value of assets than liabilities. This is done to ensure that the insurer always have sufficient funds to honour claims in times of emergencies. A higher solvency ratio is a preferable quality to look for in an insurance company.

Buying Term Inaurance Ease:

Convenience is something which everyone wants. When it comes to purchasing insurance, customers now look for plans which can not only be purchased online but can also be accessed online. Gone are the days when one policy documents were made in paper. Now is the era of e-policies where the policy document is issued online and send to your email id, from where it can be accessed anytime and anywhere.

Check The Insurer’s Reputation:

Besides the claim ratio and solvency ratio, there are some other factors which one can consider to assess the insurer’s reputation. These include the insurer’s corporate governance record, their assets under management (AUM) and also the number of instances that the insurer has violated IRDAI rules.

Choosing The Right Term Insurance Plan Reviews

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  • LIC Life Insurance
    "Must Have"
    0.5 5.0/5 "Blown Away!"
    Its is feasible and I can get the loan based on the policy coverage. I took the Jeevan anand policy probably I make the premium around Rs. 15,000 per year it has term of 20 years, Almost I paid it for 15 years , remaining 5 years to go. LIC Is good for tax benefits.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 17, 2019
  • SBI Life Life Insurance
    "Excellent Policy"
    0.5 5.0/5 "Blown Away!"
    I had taken this insurance policy a long time back, the services which they had been very good. The premium amount has been nominal and has not been high and the payment method has been simple. I can make the payments using my credit card and there has not been any hassle faced with the services of them.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Excellent service"
    0.5 5.0/5 "Blown Away!"
    I have been holding my life insurance with Life insurance corporation of India, i took my life insurance as the agent of that and he had suggested me good policy explain me well about the coverage and the premium amount they have charged me was nominal they have given me up to 3,000 , it is in monthly basis, and the premium amount gets auto debited from my account.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Good service"
    0.5 4.0/5 "Great!"
    I have been holding my life insurance with Life insurance corporation of India from long time, and the agent of LIC was know person so he suggested me best policy and there premium amount they have given me was nominal , the premium amount i use pay on yearly basis,and there is no hidden charged , and i pay premium through auto debit .
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Excellent service"
    0.5 5.0/5 "Blown Away!"
    I have been holding my life insurance with Life Insurance corporation of India,i took jeevan anand policy , and the agent is my brother , he had explained me clearly and advise me which insurance is good for me and i pay premium on half yearly basis and monthly basis as i have two policy, i use to pay through off line mode.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Best service"
    0.5 5.0/5 "Blown Away!"
    I have been holding my life insurance with Life Insurance corporation of India,i took life endowment policy , and the agent had properly explain me out the plan benefits and policy coverage , he had explained me clearly and advise me which insurance is good for me and i pay premium on quarterly basis,i use to pay premium up to 14000 through on line, i have two policy second policy premium i use to pay 25,000 as an yearly basis,and there patrol is good,they use to update me if any policy they use to update me, i use to pay through on line mode, through neft transfer.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Good service"
    0.5 4.0/5 "Great!"
    I have been using my life insurance with Life insurance corporation of India, i have taken policy for my family , i have paying premium on half yearly basis up to 65,000 they have charged me , it is nominal for me , i use to pay through off line or on line mode,it depends according to my time, it i want to pay in emergency purpose i need to pay through on line,if there is delay in paying premium they use to charged me up to 230 rupees.
    Was this review helpful? 0
    , lucknow
    Reviewed on Jan 17, 2019
  • Bharti Axa Life Life Insurance
    "Good for nominee savings"
    0.5 4.0/5 "Great!"
    Reason to chose Bharthi Axa, my friend working there hence I took the policy. I have taken term insurance with the coverage of Rs.23 lakhs , I can add multiple nominees, I make the premium of Rs.95,000 its for per annum. It has term of 10 years, now a days they have different options too.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 17, 2019
  • HDFC Life Life Insurance
    "Excellent service"
    0.5 5.0/5 "Blown Away!"
    I have been holding my life insurance with HDFC LIFE INSURANCE recently in december , they have charge me nominal premium for a yearly basis, and it use to get through on line , and there agent was good they help me to get good policy and they use to update me if any update is there in this policy time to time.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Good for future investment"
    0.5 4.0/5 "Great!"
    I don't have any query with Money back policy from LIC, they has all the option through online hence I can visit any branch for LIC queries. I get the bulk amount after 20 years , its good for my daughter marriage or education. therefore I make Rs.30,000 per annum.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Good for education purpose"
    0.5 4.0/5 "Great!"
    Long back I done LIC, I was taken education policy for my daughter, I took for it 21 years, I need to pay the premium upto 18 years, then I get 20% of amount every two year once for my daughter education purpose, everything is online, I make the premium around Rs. 40k per annum.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 17, 2019
  • HDFC Life Life Insurance
    "Excellent service"
    0.5 5.0/5 "Blown Away!"
    I have been using my life insurance with HDFC LIFE,there service is good, i use to pay my premium on yearly basis , they have charged me up to 5000 rupees ,i use to pay through on line , they are not taken any extra charges,the agent had explain me clearly about there policy coverage.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 17, 2019
  • LIC Life Insurance
    "Good for tax benefits with safe investment"
    0.5 4.0/5 "Great!"
    I have one LIC Policy for Rs. 60,000 in an annual basis I make the premium, its good for the tax benefits. The policy which I took is jeevan anand has the policy term of 20 years. However it has the locking period of three years. I can view the statement through online.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 14, 2019
  • LIC Life Insurance
    "Average"
    0.5 3.0/5 "Satisfactory"
    I have chosen 2 policies, long term and money back. LIC is good but they will provide the information only If I request them. Paying monthly 2500 rupees through ECS. I did not see any benefits and have no access for online. Every 5 years once they are giving bonus on the money back plan.
    Was this review helpful? 0
    , hosur
    Reviewed on Jan 14, 2019
  • LIC Life Insurance
    "Good policy"
    0.5 4.5/5 "Excellent!"
    I have taken 4 policies with LIC from long back. Its a mixed of endowment, money back and life insurance policy for family. I am satisfied with the benefits. If there is any problem I can manage the account online. I pay the premium by cash or cheque, its hardly around 1300 or 1400 rupees every quarterly and also monthly premium has been done.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 14, 2019
  • LIC Life Insurance
    "Good policy"
    0.5 5.0/5 "Blown Away!"
    I have a life insurance policy with LIC and it was taken almost now 10 years through an agent. The tenure period is 21 years and its a JEEVAN ANAND. The benefits are quite good. I never contacted the customer service, I go through with an agent. I make the premium through online every quarter.
    Was this review helpful? 0
    , thiruvananthapuram
    Reviewed on Jan 14, 2019
  • IDBI Federal Life Insurance
    "I feel I should have taken a better product"
    0.5 2.0/5 "Expected more"
    I have taken IDBI Federal Incomesurance policy 6 yrs back, premium of Rs 1.2 Lakh/yr, for 15 yrs . Life Coverage only 18.3 lakh, I will get only 1.8 Lakh per year for 10 yrs at end of term, which is meagre by any std. I am not able to come out of it as I will be loosing heavily. I am retiring after three years and after that I have to pay for another 5 years to get this benefit (yrly payout) . I do not know what to do.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 13, 2019
  • HDFC Life Life Insurance
    "Very Good Service"
    0.5 4.0/5 "Great!"
    I had taken this insurance policy almost five years back and i had been paying the premium on an annual basis. The premium amount was not too high and the payment method has been easy as well. There has not been any issues faced with the services of them so far.
    Was this review helpful? 0
    , coimbatore
    Reviewed on Jan 13, 2019
  • LIC Life Insurance
    "Good for me and for my nominees"
    0.5 4.0/5 "Great!"
    I have purchased Jeevan anand policy with LIC, my policy has the tenure period of 20 years. As per my policy I need to pay the premium for 15 years, I make Rs. 30,000 per annuam. At last I get the premium cover upto Rs. 20 lakhs and one other good benefits even after the policy expiry there is a maturity benefits of 14 lakhs will provide to the nominees for certain demise its good. But I suggest they need more improvement on the customer support,
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 11, 2019
  • LIC Life Insurance
    "Trusted Insurance Company"
    0.5 4.0/5 "Great!"
    It was taken the policy with LIC in month of 2014, they have good reputation and my relative is working as an agent. To secure my family I took this policy, the policy which I am holding it for 25 years, I will be getting the maturity after the tenure period.
    Was this review helpful? 0
    , kolkata
    Reviewed on Jan 11, 2019
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