“If a child, life partner, spouse, or a parent depends upon you, you need life insurance.”
In our younger years, we don’t think or plan our finances according to our goals say, 10 or 20 years down the line. However, as our responsibilities increase, we feel the need to incorporate financial planning into our lives. Not only do we want to provide financial security to our loved ones, but we also look to find ways to minimise our liabilities and seek protection from the uncertainties of life.
One way to ensure financial safety for ourselves and our loved ones is to invest in a life insurance plan. You can easily purchase different variants of life insurance online, especially term insurance and choose coverage, large enough to suit your family’s future financial needs.
Most term plans are easily customisable to fit your requirements. There are several variants of life term options available in the market to buy an insurance plan online. To help you choose the perfect life insurance plan, here are a few points to consider:
Sum Assured
It is the total amount your nominee or family will receive in case of your sudden demise within the coverage period. Determining the sum assured may be a difficult task; thus, here’s are the factors that you need to consider while estimating the right sum assured for your term plan:
1. Your age
2. Financial responsibilities
3. Your family’s future financial requirements such as lifestyle expenses and emergency savings
4. Current loans
5. Miscellaneous financial needs that may come up due to inflation
Moreover, term insurance is just like having fun; the older you get, the more it costs. Hence, it is advisable that you purchase term life insurance online at an early age, say in your 20s and 30s.
Policy Period
The primary goal of purchasing a term plan is to make sure that your family has a regular source of income after your demise. Therefore, you need to buy life insurance online to cover you throughout your working years. If you want to opt for a cover beyond your retirement age, you can select a policy term that exceeds your work years. Overall, buying insurance at a young age allows you to opt a high sum assured for an extended policy
tenure and at low premiums.
Claim Settlement Ratio of The Insurance Company
Claim Settlement Ratio or CSR is the number, which gives you an insight into the ability of an insurance company to settle their claims. For example, Max Life Insurance has a CSR of 98.74%, which is the highest in the insurance sector for the year FY18-19. The number implies that the company settles almost 98 claims out of every 100 claims filed. If you plan to buy life insurance online, it is better to go for an insurer with a higher CSR. This way, you can be assured that the insurance company would provide the intended coverage amount to your family, after your untimely demise.
Insurance Riders
Life term insurance plans provide you options to choose additional coverage, over and above your policy benefit in the form of insurance riders. These add-ons are available at an additional price and help augment your life term insurance plan benefits with comprehensive coverage against specific contingencies such as:
1. Accidental insurance
2. Critical illness cover
3. Disability income
4. Accidental death benefit
Premium Affordability
When you buy life insurance online, one of the most crucial aspects of any plan is the sum assured or the coverage offered under it. Higher the sum assured, more significant is the premium payable. Therefore, you need to choose a coverage value and premium amount that you can afford, after considering your earning capabilities and existing financial liabilities.
Moreover, life insurance is a long-term investment plan, for which you have the flexibility to choose the premium payment mode, either monthly, half-yearly or annually. Therefore, you need to select a premium payment frequency that aligns with your ease of payment.
