Today, the routine hustle of life has dawned on everyone. In search of bigger goals and dreams, you might tend to ignore your health conditions. Since your family cherishes your presence, your absence would have a larger impact on them. They would not only be emotionally disturbed but also be financially distorted without your support. To protect your family in your absence, term insurance plans come in handy. The term insurance benefits ensure your loved ones are financially strong when you’re not around.
Before you buy a policy for your loved ones, let’s begin by understanding term insurance plans in detail:
Being a protection plan, a term policy offers death benefits to your family members in your absence. As the name suggests, a term policy provides coverage for a fixed period. After the completion of the tenure of the term policy, you cannot typically extend the insurance period. In the case of a renewable or convertible term policy, many insurers make the provision for the extension of the term policy.
While buying a term plan, many people tend to get confused about the insurance period. To avoid any further confusion about the tenure, you should know how to select the right insurance period for yourself. Therefore, let’s take a look at these top six tips, which would make the selection process easier for you:
- Consider your age
The term of your policy typically depends on your age. Whether you want to purchase a policy for 15 years or 20 years, your age plays a crucial role in determining the insurance period of a term policy. As a policyholder, you can avail term insurance benefits from a younger age. When you purchase a term policy at a young age, you will receive low premiums as well as a long term policy.
- Select the right sum assured value
Premium is an essential factor to determine the term of your policy. For instance, if you opt for high coverage, there is a rise in the premium amount. When the premium is high, you might choose a shorter period for your term policy. Therefore, consider your sum assured value before finalizing a term policy.
- Look for low premiums
Term plans are usually available at low premiums. When you buy a term policy at a low cost, the chances of you continuing your policy for a long run is more. In simpler terms, the lower the premium, the higher the sustainability. With low premiums, you can ensure your family receives financial support in the long run.
- Purchase an online term plan
An online term plan is relatively cheaper than an offline term policy. Due to zero involvement of agent’s commission, an online term plan is cheaper. Under an online term plan, all you have to do is select a policy, submit the relevant details, and make an online premium payment.
- Analyse your lifestyle habits
Certain lifestyle habits like smoking can become a major concern while purchasing a term plan. Since smokers have a high risk, many insurance companies charge you with a relatively high premium. For instance, if you’re a regular smoker, you will receive the same sum assured value like that of a non-smoking individual, but at a high rate.
- Examine your spouse’s needs
As compared to men, women tend to live longer. According to the World Health Organization (WHO), women have a high life expectancy rate, over 6-8 years more than men. Since the death rate is typically low in the case of women, an insurer will charge lesser premiums. As women, you can opt for a longer period of term policy due to lesser charges of premium.
As highlighted above, you cannot extend the insurance period of your term policy. However, there are types of term policies like convertible and renewal term plan, which allow an extension. In other cases, you should pick a term policy by keeping these six pointers in mind for the best utilization of the longest period of a term policy.
