How to Choose the Best Term Insurance Plan: A Step-by-Step Guide

Choosing a term insurance plan is a necessity for every family/household these days. Now, if you’re looking to buy the best one that is tailored to your needs, you need to put in some effort accordingly. It matters since term plans are big life decisions, and you should be certain that you’re getting the most value out of them. Here’s a guide with steps towards helping you choose the best plan for your specific requirements.

Step-Wise Methods for Choosing Term Insurance

Here’s what you should do in order to choose term insurance plans.

• First, calculate what coverage you require. You should include your family’s estimated household expenses in the future, repayment of any loans/debts, and of course, children’s education and other such big-ticket expenses. Then, factor inflation into the mix and come up with the final amount. A common method for estimating the required sum assured is the Human Life Value (HLV) approach, which considers your income, liabilities, financial goals, and dependents.
• Use an online term insurance calculator to work out the premium payable for your ideal coverage amount. If you can afford this, then it’s fine, but if you can’t, keep tweaking the calculator to achieve the right balance between premium affordability and the coverage amount. Kotak e-Term offers a user-friendly way to estimate and customize your policy with competitive premium rates.
• Start assessing multiple insurance companies in terms of whether they offer suitable coverage and tenures, along with comparing their features, terms, and also their premium amounts. You’ll naturally want to opt for the plan that offers the same coverage for a lower premium.
• Then, choose the proper tenure for your policy, depending on your future goals. For instance, you can get coverage till you retire, or till your children start working.
• Look at the riders that you can incorporate into your policy. These may include waiver of premium, accidental death benefit, critical illness, and income benefit riders, etc. Check whether they are available across multiple insurers and how much they cost in terms of a nominal increase in premiums.
• Finally, check the reputations of the insurers you’re comparing. Read reviews, look up customer testimonials, and also examine the claim settlement and application procedures accordingly. You should also verify the claim settlement ratio (CSR) of any insurance company, ensuring that it is as high as possible. Kotak e-Term, for example, is a trusted term plan that offers a smooth claim process, making it a reliable option for securing your family’s financial future.
• Complete the formalities by applying online at your chosen insurer for the plan that you prefer. Depending on the sum assured and your health profile, you may need to undergo a medical examination as part of the underwriting process. Enter all details accurately, upload documents, make the premium payment, and complete the process likewise. Of course, you should only do this after you’ve verified all the policy terms and conditions along with inclusions/exclusions and other fees/charges.

Choose Term Insurance at the Earliest

You should go ahead and purchase term insurance policies without any delays. This is because they are indispensable for financially securing any family/household in case anything unfortunate happens to the primary/only breadwinner. Make sure you purchase these plans early on in life, as premiums are lower for younger applicants. However, note that the sum assured does not increase automatically—it remains fixed unless you opt for an increasing cover option.