Determine the Optimal Coverage for Your Term Life Insurance:
Calculate the coverage needed by evaluating the potential financial requirements of your family in the event of your untimely demise. Follow these steps:
Determine the Tenure of Your Plan:
Once you establish the required coverage, assess the tenure by considering when your liquid net worth (total investments minus liabilities) will exceed the term life insurance cover calculated earlier. The age at which these values coincide should dictate the coverage duration to ensure your assets adequately provide for your family post that period.
Optimize Peace-of-Mind per Rupee Premium:
Focus on achieving the highest Peace-of-Mind per rupee premium, considering factors beyond coverage. Evaluate the stability and reputation of the insurance provider, as term life insurance extends over an extended period. Purchasing term plans online, particularly through platforms like ETMONEY, often proves more cost-effective than offline channels.
Prudently Select Additional Coverage:
Explore riders offered with term life insurance plans, considering their cost-effectiveness and relevance to your needs. Major riders include:
1. Additional cover for death due to accident.
2. Cover for critical illness, providing a lump sum on diagnosis.
3. Waiver of premium on disability, exempting future premiums if permanently disabled.
4. Waiver of premium on critical illness, waiving future premiums on diagnosis.
Conduct thorough research to align additional benefits with the premium charged, and carefully review the fine print as riders may vary across insurance companies.
Review the Claim Settlement Ratio:
While the claim settlement ratio is a noteworthy factor, view it as a filtering criterion rather than a sole decision-making metric.
A ratio above 95% signifies efficient claims settlement. Avoid delving too deep into minor differences, focusing on the efficiency of settling claims rather than specific percentage variations, which may not significantly impact your decision.
