Advertisements coaxing you into buying term insurance plans are often way too convincing. What they fail to mention is that a standard term plan is a lot more complex to read, analyze, and even implement.
Essentially an insurance policy that covers the members of the kin after your demise, the term plan is hardly laden with investment-specific benefits. Unlike a life insurance policy that appreciates with age, a term plan is beneficial only if it is settled after the insured has departed.
Although the benefits to the family are immense, there are a few things that you would need to understand before opting for a term life insurance plan as agents hardly talk about these, when it comes to recommending plans.
Factors to Take Note of: Underrated yet Undeniably Important
Even if your agent proffers half-baked information regarding a term plan, you must try and factor in these aspects before proceeding:
Claim Settlement Ratio
Perhaps the most essential aspect of a term insurance plan, the CSR often signifies the credibility and genuineness of the insurer. As you should know that the insurer doesn’t simply entertain claims once the insured has departed for the heavenly abode. Most insurance service providers run detailed investigations into the death while some have guidelines and norms regarding the nature of bereavements that are covered.
It is the prerogative of your agent to bring you insurers with the higher CSR value, which signifies the number of claims honored against the ones filed. If the agent doesn’t let you know, you can always check for the same at the IRDAI portal.
Therefore, instead of relying extensively on a term plan calculator to ascertain the premium rates and the sum guaranteed to the family, it is equally important to check the CSR before proceeding.
You certainly wouldn’t want your family’s claim and expectations to be rejected citing an unnatural cause of death, accidental death, death outside the country, and any other excluded factor.
Role of Riders
Probably an extension to the first point, your term insurance agent must help you full-proof the entire policy spread by recommending valid riders. You should know that a standard term plan only covers the elementary aspects and you must add in permanent disability, accidental death, critical illness, and other riders to ensure that claim settlement is processed swimmingly after your demise.
While the inclusion of riders adds to the premium value, you can always determine the same beforehand by using a term plan calculator.
Unlike any other product, even term plans need to be compared. The agent, therefore, should offer insights relevant to the features, death benefits, rider costs, sum assured, overall cost structure, CSR, and other pointers, for some of the more sought-after insurers. The comparative approach would then help you make better and informed decisions.
Regardless of how well you choose, every term insurance plan misses out on certain attributes, which then falls in the category of exclusions. Your agent must explicitly let you know about the omissions, which often include coverage for suicidal deaths, accidental disability, or more.
But then, if the CSR still looks lucrative enough, you should work around these exclusions with relevant, supplementary riders.
Waiting Time Frame
Like most policies, even term plans have specific waiting periods before a particular claim is honored. Smaller waiting periods attract higher premiums and your agent should let you know about each aspect before proceeding.
For instance, if you, as an army staff, plan to get a term policy, it is advisable that the agent lets you into the timeframe that the insurer puts forth before the claim can get honored. Long waiting periods aren’t going to be useful in this context, even if they attract lower premiums.
A term plan is arguably the safest financial net that you can get for the family. But then, finding the right one can be a bit irksome as agents often leave out 5 of the most important aspects of the same, as covered in the aforementioned sections.
Therefore, to avoid discrepancies, the opaqueness of approach, and even unnecessary misunderstandings during claim settlement, it is advisable to get the policy from Finserv MARKETS. This would eventually help you choose better and sleep well knowing that the claims are most likely to get settled, every single time.