How to choose the best term insurance plan?

1. How to choose the best term insuranceplan? • A term insurance policy is a pure protection life insurance policy that promises to cover the risk of death during the term of the plan. If the insured dies during the policy tenure, the plan pays the sum assured to compensate for the financial loss suffered by the insured’s family. Term plans usually cover only the risk of death and therefore have a very low premium. Since premiums of the policy are low, you can afford to secure yourself optimally against the risk of premature death. Through term insurance plans you can opt for a high sum assured so that your family’s financial future is taken care of even when you are notaround. • Since term insurance plans are quite important, all life insurance companies offer a range of such plans for their customers. With more than twenty life insurance providers in the market, you have dozens of term insurance options at your disposal. How do you choose the best term insurance plan? • Here are some factors which you should consider to choose the best term insurance planavailable in the market– • The coverageoffered • The basic coverage offered by term insurance plans is the coverage for premature death during the policy tenure. However, to make the plan more comprehensive, life insurance companies add riders in the plan’s coverage benefits. These riders widen the coverage offered. So, you should find out the coverage offered by the different term insurance plans. Look for plans with inbuilt rider benefits for an enhanced and better scope ofcoverage. • Premiumscharged • The best term insurance plan is one that offers the most comprehensive scope of coverage at the lowest rate of premium. The pricing policies of different insurance companies differ and so you should compare the premium rates of multiple-term insurance plans for the same level of sum assured. The plan which offers the lowest premium rate for the same coverage benefits would be the bestone. • Range ofriders • Riders are optional coverage extensions that are offered with term insurance plans. These riders come at an additional premium and increase the coverage of the policy when chosen. For instance, an accidental death benefit rider pays an additional sum assured in case of accidental death. • Similarly, a critical illness rider pays a lump sum benefit if the insured is diagnosed with an illness that is covered by the rider. So, look at the range of riders offered by the term insurance plan. Check if the riders that you want are offered by the policy or not. Also, check the rider premiums and choose a plan which has the lowest riderpremium. • Coverageduration • Since term plans pay only a death benefit in most of cases, you should choose a plan which offers you coverage for the maximum possible duration. Nowadays, many term insurance plansare

2. allowing lifelong coverage to 99 or 100 years of age. This ensures coverage throughout your life and is a better alternative than plans which limit the coverage until 75 to 85 years ofage. • Type ofcoverage • Term plans can be allowed as increasing, decreasing, or return of premium policies. Under increasing term plans, the sum assured increases annually while under decreasing term plans, the coverage reduces every year. Return of premium policies is those which refund the premiums if the policy matures. Thus, depending on your coverage requirement you should choose the type of term plan which best suits your needs. If you expect your responsibilities to increase in the future, opt for increasing term plans and if you have a loan, buy a decreasing term plan and link it with your loan value. If, on the other hand, you need a maturity benefit, the return of premium plans would be ideal. So, the best term insurance plan would be the one that offers you the type of coverage that youneed. • Comparing the available term insurance plans is the best way to ensure that you pick the right policy. Before you buy a term plan, compare the available policies on the above-mentioned parameters and then choose the best term insurance plan which suits your insurance needs, and provides the best coverage at the lowest premiumrates.