Buying Your First Term Plan? Keep These Steps in Mind
Once you start earning, understand the importance of long-term financial planning. Providing financial security to your loved ones is the primary step of financial planning. This is where a term insurance plan along with life insurance riders plays a pivotal role. Buying a term plan online will prove to be a great investment for the future. It will take care of the financial wellbeing of your loved ones if something unfortunate happens to you. If you want to know how to buy term insurance, explained ahead are some important steps that you need to remember.
- Choose a simple plan
A term plan has different varieties. The most basic plan pays a lump sum in case of death. To avoid any complications, you must select a simple plan. If you wish to enhance your basic plan, you can opt for suitable life insurance riders as per your requirements.
- Inform the company about your habits
When you purchase a term plan online, you must inform the insurance company about your smoking or drinking habits. If you hide about these habits, and if the insurer finds out about these at a later stage, your claim will be denied. By hiding these facts, you are breaching the contract with the insurer due to which your claim will not be approved. It is recommended that you should be honest with the insurer about your current health situation and habits so that your loved ones do not face any inconvenience in the future.
- Do not buy a small insurance cover
Many people try to buy a term plan, which has a low premium. The average sum assured per Indian is between INR 90,000 and INR 1 lakh. This range is quite low to provide for a family’s wellbeing, thereby making a majority of Indians underinsured. Ideally, you need to have a term insurance plan, which is approximately ten to 12 times your yearly income.
- Do not overthink about the decision
Understandably, you want the most suitable term insurance plan and you wish to make an informed decision. If you are well aware of the need for a cover and know which plan is ideal for you, do not end up overanalyzing your decision. Overthinking will confuse you and you will not be able to make the right choice. Analyze your needs, different plans, and opt for a suitable term plan online.
- Inform your family about the term plan
You need to tell your loved ones that you have purchased a term plan. Moreover, you need to give them the insurer’s contact details and the policy documents; as such information will be helpful for the future. Doing this will make it convenient for your dear ones to file a claim during your absence.
Following the aforementioned steps will ensure that you make a wise purchase decision while buying your first term plan.
