How to Select the Ideal Term Insurance Plan? Which insurance company offers the best Term Insurance plan?
The main reason for Term Insurance is to get protection during an unforeseen event. and in case if we are not around our dear ones must receive Term Insurance proceeds without any hassles. However many of us don’t focus on real facts while selecting an insurance policy, many will go by traditional Endowment plans.
There is a drastic shift happening these days, more and more people are getting educated about Term Insurance plan Benefits and are shifting to Pure Term Insurance plans.
If you are still thinking to take Term Insurance plan, Read here how to take Term insurance plan, Which is ideal for you, and major factors to consider while choosing a Term insurance plan.
What are Term Insurance plan Benefits?
As explained in the earlier post on the topic, Why you must choose Term Insurance.
- Term insurance plan is simple plain insurance where you get a high sum insured amount with less premium.
- If you take the Term insurance plan early in your life, Premiums will be very less till your policy expires.
- If you are a non-tobacco user, you can enjoy a rebate on all premiums for the complete period.
- You can choose the period of insurance as high as 90+ Age also.
What are the extra advantages / Benefits of Term Insurance plans?
Many Term insurance companies offer a wide range of add ons to term insurance plans, and many of them are very good based on your requirements.
- Lower Premiums for non Tobacco users.
- flexible payment options like monthly, quarterly, annual, etc.
- Premium waiver add ons in case of critical illness, permanent disability, etc.
- Accidental insurance benefits, Return of premium options etc, along with many others.
- One must choose the best plan suiting to their requirement with less cost.
What are Sum Payout Periods for Term Insurance plan Benefits?
Payout modes are important while choosing term insurance, as per your dear one’s needs.
One must choose how insurance proceeds will be paid to the beneficiary in case of an unfortunate event.
- Lump sum amount payout immediately after Death of insured
- Monthly fixed sum amount payout
- The monthly amount payout with an increase every month on month based on fixed % increase.
if selected wisely, your nominee will receive amount throughout their life without any hassles based on their requirement.
Term Insurance Coverage & Period and Amount selection
The main purpose of Term insurance is to get the advantage of higher period coverage, with a high amount of insurance and with lesser premiums
- Period of insurance is a very critical and important factor, one must choose an accurate period. Go for a maximum possible period without by keeping eye on premiums of Term insurance.
- Insurance period can be till you get retired from your work, these days many people are working beyond 60 years too. Best Period is to take term insurance cover at least till you turn 70 years.
- Next is the amount of Insurance, This entirely depends on the lifestyle of insured nominees, Ideal Sum Insured for Term Insurance should be 10 times the annual salary of insured.
Term Insurance Plans Claim Settlement Ratio
Claim Settlement ratio is the number of cases or claims settled by Insurance companies, during an unfortunate event of the death of insured.
If an insurance company has claim settlement ratio of say 98%, then they have settled 98 claims out of 100 claimed lodged.
Major insurance companies like Icici prudential, Max Life, LIC, etc are always having claim settlement ratio of above 97% on an average. These are proven and time tested insurance companies in terms of the settlement.
Persistency Ratio of Term Insurance plans
Persistency Ratio means how regular are policyholders with respect to having a continued relationship with the same insurance company. This way we can measure their satisfied customer base and trust being given by customers.
- This Ratio is measured at various policy periods, like the 13th month, 25h month, 37th month and 61st month from policy start date
- The ratio is calculated with the number of policyholders paying the premium divided by net active policyholders in a given financial year as a %
Term Insurance companies like Max life, Icici Prudential, etc have over 80% ratio and are market leaders in this manner. LIC has very low due to their strong presence of Endowment policies, as investors are getting educated and moving to Term Insurance Plans with cheaper premiums, policyholders are not continuing the premium payments hence LIC and other small insurance companies will have a lesser ratio.
Claim Settlement Process in Term Insurance
Faster Claim settlement process means time taken to settle insurance amount to nominees.
This period is calculated from the date of Lodging the claim till the settlement of amount payout to nominees.
Many Insurance companies have a very lengthy and time-consuming process which is taking a lot of time and cost with uncertainty during critical times.
Major established insurance companies like Max Life, Icici Prudential, LIC of India, etc are having established a presence across Pan India with much faster claim settlement process time.
Conclusion: No Doubt Term Insurance is best when you think of covering life risk, Term Insurance plan Benefits is to get the higher period insurance coverage, with a high amount of insurance and with lesser premiums.
However one must be aware of these process of settlement to protect your family. These factors will help you in taking suitable coverage with the required period and best term insurance plan.
Still thinking to take Term insurance plan?? Take wise choice before its too late!. Premiums will go up even a few days of delay and you need to pay increased premium through the duration of the policy.
Think wisely and choose the best term insurance plan
Sharing is caring!