You must have definitely heard people stressing the importance of insurance coverage. It is even more evident during the ongoing pandemic where protecting your life and health has reinstated its importance. But before the pandemic took the world by storm, millennials and Gen Z did not place much emphasis on having a life insurance plan by virtue that health contingencies are mostly age-related. However, that isn’t the case anymore.
A term insurance policy is a pure life insurance product that offers financial coverage to the policyholder’s dependents in their absence. Unlike traditional insurance plans, a term plan does not offer any maturity benefits to the policyholder. However, there are some other term insurance benefits, which are as follows:
- Affordable insurance premiums.
- Coverage for entire life.
- Payout of the entire sum insured.
- Optional critical illness coverage.
- Accidental death benefits.
- Tax benefits under Section 80C of the Income Tax Act.
The insurance sector also witnessed many new buyers since the global health crisis; people have started to move towards smart and paperless ways of buying and using online insurance plans. Just like how most things are available online, insurance plans can also be purchased in just a few clicks. Here are some hacks on how to buy a term insurance policy online.
- Buy more for less
While the number one concern for many when buying a life insurance policy is its costs, buying a plan with lower coverage may become counterintuitive. Instead, one can choose to opt for a term insurance plan. Since a term insurance policy is a pure insurance product designed with insurance as its only objective, term insurance benefits include lower costs as the highlight feature. Depending on the insurance company and the policyholder’s health, the premium, for instance, for a 45-year policy will be the same or even lower as compared to a 35-year policy. Based on the threshold of the sum assured, the premiums vary, and hence, you can avail of better deals when you shop for a term insurance plan online.
- Considering the coverage of your plan
When shopping for a suitable plan among the plethora of term insurance plans in India, you need to remember to keep in mind the benefits that you actually require in your policy. If you choose to automate the payment and the policy renewal, you might actually end up paying for policy features that you don’t need or miss out on features (riders) that are available at a marginal cost.
For instance, the accidental death rider is offered by many term insurance plans and it offers a more comprehensive coverage by your policy. Thus, when opting for a suitable policy, make sure to sift through several available term insurance plans in India and then make a favourable choice.
- Opting for the right policy tenure
One of the advantages of using a term insurance cover to safeguard your life is that your family can continue to sustain their standard of living and avoid a debt-trap even when you are not around. But for that, it is essential to strategically choose the tenure of your term insurance policy. Typically, a term insurance policy should be for a tenure that is longer than the debt you need to service, like a home loan or the life event that you are planning for. This ensures there is a financial backup for your dependents to pay off any debt or meet the long-term financial objective without any hiccups. In this process, you can make use of a term plan calculator that helps to know not just the premium amount for suitable insurance plans, but also aids in the comparison of several alternatives.
- Choosing the ladder strategy
As the breadwinner of a family, you might be required to consider several different things when planning your finances. This includes your own retirement planning, your child’s education and even your spouse’s retirement. At the same time, you might be required to settle several liabilities like a home loan, education loan, etc. during this period. Using the ladder strategy of buying term insurance, you can choose to buy more than one policy and align the policy tenure of these plans with these specific financial goals. This way, in case of an untimely demise, the family members need not worry about meeting the large debt by using the proceeds of a term insurance cover.
- Opting for a suitable option of premium payment
Another nifty hack when buying term insurance online is choosing the right payment option. Terms insurance plans can either be purchased with a one-time premium payment or a periodic payment either annually or monthly. Based on what suits your financial needs, you can opt for the right premium payment. A term plan calculator can help you decide by determining how much amount you would be required to pay upfront.