A term insurance policy is one of the most important investments that all of us should take seriously. None of us know for how many years we are going to survive but through a term insurance policy we can at least take care of our family, even when we are not around anymore. And this is only possible if you buy term insurance. However, certain things can help us in purchasing the right term insurance plan which can be helpful for our family in the future. Let us take a look at them:
Get sufficient insurance cover
It is significant to decide the coverage that your family will need. Most of the people pick a random number like INR 1 Crore, thinking that this will be sufficient for the. Well, this is the amount of money that you are leaving behind for your family to survive for at least 10-15 years without any worry. Your family has to cover various liabilities, which may include paying off home loans, education of the children, their marriage, and even the living expenses, etc. You need to consider the annual inflation while calculating the expenses. Therefore, as you decide the amount that you would need for your family, think about the inflation. This will give you a good idea to make the decision.
You must disclose all the information appropriately
You need to make sure that each of the information that you are giving to your insurer is 100% correct. If you think information like your habit of drinking and smoking can be hidden and you can enjoy all the insurance benefits, then you are simply mistaken. Providing wrong information to your insurer can lead to the rejection of the insurance claims. Therefore, disclosing all the information correctly should be taken seriously, and if possible, you should even verify the information once before submitting them. Apart from these habits, you also must inform the insurer if you have any kind of health issue or even family health history.
Disclosing the existing policies
While you can get more than one term insurance policy for your life, you must disclose all the information related to your current insurance policies. And you must do it before you are buying a new term insurance plan. Hiding this information can result in the rejection of the claim.
Adding nominee is a must
As you file the insurance proposal form, you must ensure of putting the nominee’s name. In an ideal situation, the nominee of your term insurance plan can be your spouse or your children. You must choose the individuals as the nominee of your term insurance plan who you want to get your plan benefits. If you want to be certain that the sum assured will be passed only to your wife and children, you can buy term insurance under the MWP Act (Married Women Protection Act). As you take this step, only your wife and children will be able to claim the amount and no one else.
By adding riders to your term insurance plan, you will be able to get additional benefits. This can even be called supplementary coverage. Buying only an insurance policy will provide the sum assured to the beneficiary if you pass away within the tenure of the term plan. However, adding riders will benefit you even when you are alive; however, under some circumstances. Let us discuss some of the riders.
Critical Illness Riders: If you are diagnosed with a particular illness, without any condition and sub-limits, the critical illness cover will pay you a lump sum amount to your family.
Accidental Death Benefit Rider: On adding an accidental death benefit rider, the beneficiary of your term insurance plan will get additional amount to the sum assured in a situation of your accidental death.
Income Benefit Rider: On buying this rider, the beneficiaries will have an additional income annually for 5 to 10 years. This is an extra amount apart from the basic sum assured.
Waiver of Premium Rider: If you fail to pay the premiums in the future because of accidental disabilities or loss of income, the premiums will be waived off, while the term insurance plan will remain active.
Considering these points will help you to buy the right term insurance plan and making it easier for your family to claim the sum assured. If you want more information on term insurance plans and all the do’s and don’ts related to them, you can take a look at the website of IIFL.