Let’s start by considering an illustration including you and some of your friends –
You earn Rs. 10,000 per month from a salary, while your friends A and B manage to earn Rs. 15,000, and Rs. 8,000 per month, respectively. In case each one of you faces a salary cut by 10%, the impact would not be the same, though you all may get to manage the same somehow. If the cut is much deeper, say 50%, then managing regular expenses will become difficult. The family members had to drop various expenses as per the new earnings.
Imagine what will happen if job losses were to occur. The 100% loss of income has a varied impact on different families, particularly when breadwinners die, unfortunately. It is where buying the best term insurance policy makes sense. Since the implications of income loss are not same for all, it is not good to follow a one-size-fits-all approach to buy the best term insurance policy in India.
You can ask friends or colleagues for their recommendations about buying the best term insurance policy. But you need to assess your needs as well before making the final buying decision.
What Information Can You Get from Peer Recommendations?
There are several aspects in life that you would like to discuss more with peers than family, especially those upon whom you can rely. Here’s the information you can get from the recommendations about selecting the best term insurance policy in India:
- Leading insurance companies in India
- Quality of customer support services provided by different insurers
- Process of purchasing the best term insurance policy – both online and offline
- Reviews about the claim settlement process
- Inclusion and exclusion terms of the best term insurance policy in India
- Parameters to consider while buying a term plan online
Although you can get a lot of information from your peers about selecting the best term insurance policy, you must analyse your distinct needs before buying one.
How to Plan for Buying the Best Term Insurance Policy?
- Consider Your Income
Buying the best term insurance policy comes with the responsibility to pay the premiums on time to keep it active. Whether you can pay a certain amount as a term plan premium every month or year depends on how much you earn. Clearly, your income might not be the same as that of your friends, which determines the affordability.
Hence, it is crucial to chart out your income versus expenses to get a clear picture of the amount you can set aside for term insurance premiums. It would be best if you do not rely on recommendations in a blindfolded manner. Instead, research at your end to understand term insurance need first.
- Focus on Your Lifestyle
The kind of lifestyle you follow has an impact on your total life and health conditions. Various lifestyle diseases are on the rise in India. Many people leave lifestyle considerations aside while buying the best term insurance policy in India, not knowing the perks they would get otherwise.
For instance, when you know about your current health condition, including all the pre-existing illnesses, you can plan to buy life insurance in a way that it also provides the benefits of critical illness plan. For such needs, you can include critical illness riders with the best term insurance policy in India. Similarly, given the higher risk associated with your health, you can choose a higher sum assured for the well-being of your loved ones in your absence.
- Keep Your Life Goals in Mind
Each of us envisions achieving various life goals, be it related to maintaining financial security for the family, buying a home, or creating wealth. Then, we invest our time and efforts to achieve them, battling with life’s uncertainties on the go. Since you never know what will happen in the future, planning for the right things helps optimize the impact of unpredictable times.
If you want to live a financially-independent retired life, you need much more than your family’s financial security. A pure term plan might not fit well for this goal. As an alternative, you can select the best term insurance policy with a return of premium option or invest in ULIPs.
- Choose a Reliable Insurance Company
Before selecting the sum assured, policy period, or payment option, a crucial step is to choose a renowned life insurance company. Knowing that the chosen insurer provides quick support and claim settlement, you can enjoy peace of mind while keeping the best term insurance policy in force. The selection of an insurer should be made based on its claim settlement ratio for the past few years.
Analysing this ratio makes you aware of the efforts the insurer has invested in providing assured claims to its policyholders. You can rely on term insurance plans from reliable insurers like Max Life Insurance that has a claim settlement ratio of 99.22%.