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In return, if the policyholder dies during the policy period, their beneficiaries shall be entitled to death benefits in the form of a sum assured. The purpose of a term insurance plan is to protect your family's financial needs in the face of an unpredictable future.

With time, however, the term insurance India and other countries offer has evolved in myriad ways, making the choice of a plan quite complex. There are multiple aspects to think about before you zero in on any particular policy.

This guide talks about the 10 things you need to keep in mind while looking to buy term insurance:

1. Calculate Your Needs
The primary aspect of every term insurance policy is the coverage amount. This is the death benefit the policyholder's nominee shall receive in the event of the former passing away during the policy term. Generally, this amount should be enough to fulfill financial obligations like debts while covering your family's essential expenses such as monthly bills, education fees, medical emergency funds, and so on.

Ensuring that you choose a policy with adequate coverage is the most critical step. To calculate, you can start by approximating your household's monthly expenses and multiplying the figure by 150. This also accounts for inflation. On top of this amount, add your total liabilities, expenditures for important milestones in your family, and retirement savings. Finally, deduct any liquid assets you own in the form of stocks, FDs, or mutual funds. This will estimate the coverage you need.

2. Decide the Tenure
You want your term insurance plan to last till your retirement. Anything less than that might be too short and beyond that, too long. When it's time for you to retire, you will have accumulated a corpus of various assets. At the same time, you won't be the sole earner in your family and will have fewer responsibilities.

The logic here is that you need to insure yourself only for as long as you're earning. If an unfortunate event were to result in premature death, your family would need that coverage amount in lieu of your regular income. By the time you're 60 years of age, their needs will be different and not depend solely on you. Therefore, it's wiser to buy a policy till the age of retirement as the premiums will be lower than purchasing a policy for a longer term.

3. Choose Useful Riders
Riders are add-ons that cover you in situations such as accidental death, disability, or critical illness. While these can be valuable additions, don't buy them just for the sake of it. Think about which ones will give you peace of mind as per your unique requirements.

4. Be Upfront About Everything
Many policy buyers tend to hide the fact that they smoke or drink to reduce their premiums. This can be problematic if your nominee triggers a claim, as providing false information on the policy form can lead to an automatic rejection. It's always better to be upfront about your health and lifestyle to ensure a claim is accepted in the future.

5. Buy Early
Complex as it may seem, buying term insurance is not rocket science. It's more important to have a basic plan than wait till later to buy the best one. Not only will you stay insured for a longer time, but the earlier you purchase a plan, the lower your annual premium amount will be.

6. Don't Fret Over Increasing Premiums
In case you develop a health condition during your policy term, you will be required to reveal it to the insurance provider. This will inevitably lead to your premium amount increasing, but that's no reason not to disclose such crucial information. It's always better to be honest because the added premium is more practical than hiding information that can cause claim rejection in times of need.

7. Compare Different Policies
It is not a good idea to get the first term policy you see. Today's market is saturated with term insurance plans, and increasing competition has resulted in various plans offering better features and benefits. As a consumer, you should make sure to receive the highest value for your money. This is possible only if you look at different policies, understand how they work, and decide to buy term insurance that best suits your family's long-term needs.

8. Consider Online Term Insurance
Gone are the days when buying insurance meant spending hours talking to agents about features, benefits, and prices. Now you can find every major insurance provider offering their services online. A huge advantage of buying online term insurance is that providers offer added benefits at lower costs. Purchasing online also gives you the chance to compare various policies and select the best term insurance India has to offer.

9. Read the Fine Print Carefully
This is an essential practice for any contract you sign. Always cross-examine the details mentioned in the fine print, such as the terms, conditions, and especially information about your medical records. Ensure that everything has been detailed correctly and there are no errors in primary fields like name, age, address, blood group, nominee information, etc. If you catch a mistake, notify your insurance provider immediately.

10. Opt for a Trustworthy Insurer
Among the thousands of brands in the market, you need to find the one that offers a good policy while being a reputable name. One factor that indicates the reliability of an insurer is the Claim Settlement Ratio. This denotes the proportion of accepted to rejected claims. Generally, a CSR of over 95% is considered favorable. The higher the percentage, the better it is for you.

Following this comprehensive guide will make the process of finding a suitable term insurance plan smoother for you. Remember, the best time to get insured is right now.

Disclaimer:

The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.

PNB MetLife India Insurance Company Limited
Registered office address: Unit No. 701, 702 & 703, 7th Floor, West Wing, Raheja Towers, 26/27 M G Road, Bangalore -560001, Karnataka
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