A term policy is your family’s simplest and most effective financial net. If you are the sole breadwinner or want to ensure that the burden of your debts doesn’t fall upon your family’s shoulders after your death or want to cover the cost of any critical illness, buying a term insurance plan is the best decision in your financial planning.
Reasons to Buy a Term Policy
Losing a loved one drains the family emotionally, and any financial burden in such a situation will only aggravate the suffering. To ensure your family doesn’t have to go through any additional distress, you should consider safeguarding their financial position through a term insurance plan. It can offer these five benefits.
- Financial Protection: A term policy can replace the lost income and help your family live with dignity.
- Covering for Debts and Mortgages: You may have some outstanding debts, mortgage payments, or business liabilities, which can be an unexpected financial strain for your family. A term insurance plan can help your family cover these commitments.
- Affordable Plan: A term insurance plan is one of the most affordable and easiest forms of financial planning.
- Income Tax Benefits: A term policy offers income tax benefits to the insured person while paying the premium and the nominee when receiving death benefits.
- Peace of Mind: Knowing that your loved ones will be cared for in case you are not around is the ultimate peace of mind.
Choosing the Best Life Insurance Companies in India
Finding an insurance provider that suits your needs can be an overwhelming experience. It is best to use a term plan calculator and compare companies based on the results. While you can rely on recommendations or the internet search, it’s suggested to consider these parameters to make an informed decision for your family.
Business Licence:-
The government issues licenses to insurance providers for different regions. Before buying a term policy, check the company’s valid license. You can check the official website of IRDAI* for the same.
Financial Stability:-
The government annually publishes a report on the compliance status of insurance companies in India**. You can check the key ratios like the Solvency Ratio, Incurred Claims Ratio, or Commission Expenses Ratio to gauge the financial standing of an insurance company.
Reputation:-
Other than the financial ratios, checking the ratings from independent agencies to insurance companies is important. Credit-rating agencies determine the company’s financial strength and ability to pay claims.
Claims Settlement Ratio (CSR):-
This means the number of claims an insurance company successfully releases versus the number of requests received in a year indicates a company’s credibility. You should look for a higher CSR and can check the same on the official government website.
Coverage:-
Compare and analyze the coverage offered by each insurance company for term insurance plans and choose what best fits your requirements.
Premium:-
Each term insurance company has its criteria to determine the premium amount based on many factors. Moreover, each company may offer different benefits for the same premium amount. You should choose an option that provides the maximum useful benefits at the lowest rate.
Additional Benefits:-
When deciding on the best insurance company, you should also consider the additional benefits offered by the company on your term policy and the cost of such benefits. Make sure you analyze the worth of each benefit and choose a company that offers the most useful add-ons at an affordable rate.
Support:-
As much as the benefits, it’s important to understand the support offered by the insurance company at the time of claim settlement. You can read reviews and testimonials or talk to people to know if the process is hassle-free. Also, customer support during the policy’s tenure is an important factor.
Conclusion
While your friends and family may offer the best recommendations on restaurants and movies, it’s not always necessary that they may have the best insurance advice for you. Choosing a term insurance plan and a term policy company is one of the most important decisions of your life. Hence, you should understand all the factors and then make a prudent judgment.
Keep the parameters discussed above in mind and contact an insurance expert to choose the best life insurance company in India. And don’t forget to read all the scheme-related documents carefully!