Life is unpredictable and you never know what will be the condition of your dependents if something untoward happens to you. To secure the financial future of your loved ones, it is advisable to invest in a term insurance plan. Such a plan will provide for the financial security of your loved ones during your absence. As a responsible family member, you must think of the future and take precautions against any uncertainties. By buying a term plan, you will live stress-free without worrying about how will your dependent family members financially cope when you are not there to support them.
A term insurance plan can prove to be an indispensable asset. It will take care of your family’s financial wellbeing. However, while opting for a term plan, you need to be cautious by keeping the following five warning signs in mind.
- Choosing inadequate term cover
You need to pick a cover which is at least ten times your present annual income. It might look like a large amount but it will be just enough to sustain the needs of your family in case of your absence. Most Indians are underinsured because they choose a small cover. Avoid this mistake and ensure that you are adequately covered. Use the term insurance calculator to get an estimate of the premium amount for a certain sum assured.
- Not reading the policy’s terms and conditions
You must read and understand the terms and conditions of the policy carefully before purchasing any plan. This will help avoid any misunderstandings at a later stage. If you do not understand anything in the policy, you can contact insurance agents to help you with the same.
- Not comparing policies online
You need to use the Internet and compare the policies of different insurers in order to make a wise decision. It will help you choose the most suitable policy as per your requirements. When you compare the plans and their features online, you can easily make a smart buying decision.
- Not analyzing the term policy
The insurance industry has various insurers who provide competitive product offerings. In order to choose the right type of policy, you need to be wise enough to make a thorough analysis of the same.
- Choosing a short term for the policy
The tenure plays a huge role in your policy. Do not choose a short tenure to save on the premium. By doing this, you will only incur losses. You need to understand that the term plan is for your protection and if you survive the policy’s tenure, it will not offer anything.
Be alert, avoid the aforementioned mistakes, and buy a term insurance policy that fits your needs.