6 Factors Which Should Affect Your Decision of Buying a Term Plan Online
What gives meaning and purpose to life is the presence of loved ones. Moreover, therefore, everything becomes secondary to you in front of your family’s happiness and security. You make sure that they never have to compromise on their wishes and dreams, by working hard at your end and making sure things fall in place for every member.
However, life’s uncertainties present many unforeseen challenges. That is why you worry about your family’s security in your absence and consider to buy a term insurance plan. To purchase a term plan is a great decision, because it promises to support your family financially, by providing a sum assured upon your death in the form of the death benefit.
While the decision to buy this plan is a wise one, but many of you often lack proper knowledge aboutwhich all factors to consider before making the purchase. So, let us tell you six crucial factors which you should consider before buying any plan.
- Claim Settlement Ratio of Insurer
The claim settlement ratio refers to the number of claims settled by the insurer as against the number of claims registered under it. The reason why this factor is crucial is that no matter how promising the plan may be, in terms of the sum assured, support service, but if in the critical time, when your family needs money, the insurer refuses to settle the claim, then it would be of no use. That is why, if an insurer has a high claim settlement ratio, it means that it is reliable.
Reputable insurers like Max Life Insurance have a claim settlement ratio of 98.74%, which is one of the highest in the industry. So, when you buy online term insurance, you should check for this important factor in all the insurers before making the purchase.
- Persistency Ratio
In life insurance, another important metric is to track the insurer’s persistency ratio, which indicates policy retention enjoyed by the company. Measured by dividing the number of policyholders who are paying the premium by the net active policyholders, multiplied by 100, you get a ratio showing how long customers stay with their policies.It is a way of looking at the number of policy renewals that take place year after year. This ratio is measured by considering both the policy number and premium collected into consideration.
If you pay heed to this factor, then you will know how much other policyholders trust the insurer’s long-term products and services.So, make a term insurance comparison and then accordingly decide if you wish to go with a specific insurer or not.
- Pay-out options in the Plan
To cater to the different needs of various policyholders, insurers offer different pay-out options. So, before buying the online term policy, check out the pay-out optionsprovided by the insurer under different plans.Usually, reputable insurers offer sum assured in the three forms, namely, lumpsum money, lumpsum money with monthly income, and lumpsum money with increasing monthly income. So, out of these options, you can analyze which plan can support your family best in your absence.
If there is no earning member in your family other than you, then along with death benefit in lumpsum form, monthly income or increasing monthly income pay-out will support them better by providing regular income flow.
- Add-on Covers
Insurers in a bid to offer more comprehensive coverage to policyholders provide the option of many add-on coverages. Add-on benefits like a critical illness cover or a premium waiver option make the overall term plan a better deal for you while securing your family’s future furthermore. So, always carefully check the add-on covers while making term insurance comparison, for securing maximum financial aid for your family after your demise.
- Physical Presence of Insurer
Although you can do the majority of the operations related to managing your policy online now, still the physical presence of the insurer is also essential, in case you need to seek help. The insurer’s widespread presence will make it easier for you to approach them by physically reaching out to their office at the time of claim settlement or any other such case. So, look for this factor, too, when making a term insurance comparison.
- Why Not Consider Premium as a Decisive Factor?
Premium to be paid is sure an important factor, but it is not a decisive factor, basis which you should make your purchase decision.
Some of you hastily purchase a plan by looking at the low rate of premium you are required to pay. However, if the insurer does not have a good claim settlement ratio or offers no additional cover, then it may not be a good idea to buy that plan as compared to a plan which has a higher premium but offers multiple add-on features.
Be Confident About Your Family’s Security
Now that you know all the crucial features which have a bearing on your family’s security quotient in your absence, make the right choice. Remember,online term plan purchase means you can quickly check out many other plansbefore you zero down on any plan. You can compare features and benefits of each term plan and calculate the corresponding premium amount with the help of an online term calculator.
So, be your family’s hero even long after you’re gone.
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