What is a term insurance plan?

A term insurance plan is a type of life insurance cover where the insurance covers the policyholder for a certain period. The death benefit goes to the nominee if the policyholder passes away during the insurance policy term. The ultimate goal of getting term insurance is to ensure that the family holder's policy receives compensation in case of untimely death. Term insurance is also a long-term investment of sorts that your insurance POS agent can help you understand better.

 

When compared with a life insurance policy, the cost of term insurance premiums is lower. If a policyholder outlives the policy's terms, they do not receive any form of a payout. The investment for term insurance policies is nil, unlike home insurance policy and such.

 

Here are some factors to keep in mind when comparing the policies of various insurance providers

 

●      First and foremost, decide the amount you want to be covered by your term insurance. The difference between your liquid assets and long-term financial obligations should help you decide your policy's cover and duration.

●      Always go for a reputable Insurance Company. Try to gauge if they have happy customers. Find out how long they have been in the business of term insurance. Don't hesitate to reach out to friends to learn more about the company.

●      The easiest way to get the trustworthiness of insurance companies to check their claim settlement ratio. The claim settlement ratio is the number of insurance claims the company has versus the number of insurance policies the company has provided. The higher the claim settlement ratio, the more reliable the insurance provider.

●      Remember to read the fine print of term insurance policies before you decide to sign up for them. The terms and conditions of policies let you know if the policy provides death benefits. In some term insurance policies, the cover may not be applicable for special cases like self-harm.

 

Going through the fine print carefully will help you understand the pros and cons of the policy you are considering as a long-term investment.