Compare Term Insurance Plans Based on 6 Factors to Get the Best Policy

While there are many ways to start planning for the future, being financially secure remains one of the critical aspects to be considered. Often young adults postpone financial planning, but in reality, it is the best time to get your ducks in a row! At a young age, one has fewer responsibilities to look after, making it easier to think about buying an insurance policy.

If you want to opt for a simple life insurance product that can secure your present while offering financial cover for your family in the future, then a term insurance plan is the way to go. A term insurance plan can not only help you plan your finances better but also see to it that your loved ones are financially stable and can live a worry-free life in your absence.

What Are The Factors To Compare Term Insurance Plans?

Nowadays, a term life insurance policy helps a prospective policy buyer get covered for a variety of incidences that can put a dent in your finances. However, before you make a final decision, here are some of the quick parameters that will help you compare term insurance policies and select the one that suits your family needs the most:

1. Coverage vs. Premium amount

The premium that a term insurance policyholder has to pay depends on the coverage they opt for, which means that the higher your coverage amount, the higher your premium amount.

Hence, it is advisable to talk it over with the family first and know how much coverage they need to be financially secure in your absence. You can then compare various term insurance quotes from top insurance providers based on the premium coverage you seek and the premium paying amount.

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2. Premium Payment Options & Frequency

Insurance providers offer various payment plans like the single pay option, the regular pay option (throughout the coverage period), or limited pay (for a fixed duration which could be lesser than your coverage period) for a term life insurance policy.

You can choose to pay your term insurance premiums on a monthly, quarterly, or yearly basis. This is another viable parameter that helps you decide between term life insurance plans based on the different premium payment options.

3. Duration Of The Policy

While running a term plan comparison, it is essential to know which policy provider is offering you the maximum tenure on a particular term insurance plan. If you are buying at a younger age, it is crucial for you to get a higher cover for a longer tenure as it wouldn’t be feasible to opt for another life insurance policy when you near your retirement years.

4. Riders For Add-On

Another factor that helps decide which term life insurance policy is your ideal bet is knowing all the additional riders that insurance providers are willing to offer with your plan. However, it is not necessary that you pick the policy that provides the maximum number of riders because there may be some riders that your family doesn’t even need.

It would be futile to have them in your policy. Know which riders would help you customise the term insurance policy for your family’s future security and compare insurance plans accordingly.

5. Claim Settlement Ratio (CSR)

The Claim Settlement Ratio of the insurer determines the number of times a claim has been successfully settled by them against the total number of raised claims. This helps you understand the credibility of the insurance providers and will be a massive factor in the comparison that you make between different term insurance quotes that you receive.

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6. Tax Deduction

Apart from these parameters, you can also decide to go for an insurance policy that is helping you save more tax if you already fall under a heavy tax bracket. Knowing how much tax deduction your term insurance policy can offer will help you decide the premium amount and premium paying frequency for your policy. It is wise to compare term plans online and consult with your family before making the final decision.

Bottom-Line: Need For Comparing Term Life Insurance Carefully

A term insurance plan has become the need of the hour, and there are ample insurance providers out there to provide you a life cover. While it is great to have options to choose from, this also makes it just as tricky as it is essential to know what it is that you are precisely looking for and then go about comparing policies accordingly.

Remember always to use an income tax calculator that can help you calculate your premiums to compare policies while knowing how much tax can be saved annually on your premium amount. Ensure you run a thorough comparison before deciding upon an insurance provider, as this is a crucial decision. Getting the right insurance partner would not only make your term plan buying process hassle-free but also help your loved ones conveniently apply for a claim in your absence.