Choosing the best term insurance is a pivotal decision in securing your family’s financial future, especially when you aim for a substantial coverage amount like Rs 1.5 crore. In life’s uncertain path, it is critical to ensure that your loved ones are financially secure while you are away. A term insurance policy with a coverage limit of Rs 1.5 crore provides a safety net that can assist your family in maintaining their level of life, paying off debts, and meeting future obligations without financial pressure.
When looking for the finest term insurance plan for Rs 1.5 crore coverage, examine the following complete aspects to make a better decision—
⮚ Compare premiums
Use online term policy calculators to strike a comparative analysis of the premiums of distinct plans. Given the cover of Rs 1.50 crore, the premium figure can differ considerably among insurers. For a Rs 1.50 crore term insurance policy, the premium can differ depending on parameters such as age, policy term and health status. For example, a healthy thirty-year-old may require paying considerably less than a 45-year-old smoker for a similar cover amount. Using online policy calculators permits you to check out such differences across insurance providers, assisting you in figuring out the most effective option available in the market.
⮚ Claim settlement ratio
Look for insurers with a high claim settlement ratio, which indicates the insurer’s reliability in settling claims without hassle. This ratio indicates the percentage of claims settled by an insurer. A high ratio, say 98%, suggests that the insurer is reliable, meaning out of 100 claims filed, 98 were settled. This is a critical factor in choosing an insurer, as it reflects their commitment to fulfilling claims.
⮚ Assess your needs
Before going into the possibilities, utilise a term insurance calculator to evaluate the amount of coverage that best meets your family’s needs, taking into account your liabilities, lifestyle, and future aspirations. Using an online term insurance calculator is the first step in establishing the appropriate coverage amount. For example, if you have a home loan of Rs 50 lakhs and personal debts of Rs 10 lakhs, and you expect your family’s yearly living expenditures to be approximately Rs 10 lakhs, you should consider purchasing a policy that can cover these liabilities and provide for several years of living expenses. A Rs 1.5 crore coverage may be appropriate when considering future ambitions such as the education of kids or a spouse’s retirement demands.
⮚ Critical illness cover
Opt for a plan that offers an option to add critical illness cover. This is beneficial as it provides a lump sum amount on the diagnosis of specified critical illnesses. Adding critical illness cover provides a lump sum on the diagnosis of a critical illness, such as cancer or heart disease. For example, if you’re diagnosed with a covered illness, the insurer might pay you Rs 20 lakhs from your Rs 1.5 crore coverage, helping with treatment costs without affecting the death benefit.
⮚ Policy term
Choose a policy term that covers you until the age at which you think your dependents will no longer rely on your income. This could mean until your retirement age or until your children are financially independent. The policy term should be extended until you believe your dependents will not need financial support. If you are 30 and plan to retire at 60, a 30-year term might be ideal. This ensures your dependents are covered during your working years, the period they’re most financially vulnerable.
⮚ Premium payment options
Insurers offer various premium payment options such as single, regular, and limited pay. Select the one that aligns with your financial planning. Insurers provide several payment options. If you prefer to pay the premium quickly without ongoing commitments, a single pay might be suitable. Conversely, a regular pay option allows you to spread the payments throughout the term, which could be easier on your budget.
⮚ Solvency ratio
Check the insurer’s solvency ratio. A higher ratio indicates a strong financial capacity to meet long-term obligations, adding an extra layer of security. This ratio measures an insurer’s ability to meet its long-term obligations. A solvency ratio of 200 per cent means the insurer has twice the assets over liabilities, indicating strong financial health and the ability to pay claims.
⮚ Riders/add-ons
Look into additional cover options like accidental death benefit, disability cover, and waiver of premium on disability. These enhance your base policy at a nominal extra cost. Adding riders like accidental death benefits can provide extra coverage in case of accidental death. For instance, if you have a Rs 1.5 crore policy and add a Rs 50 lakh accidental death rider, your beneficiaries would receive Rs 2 crores if you died due to an accident.
⮚ Customer service
Efficient customer service is crucial for hassle-free claim settlement. Research customer reviews to gauge the insurer’s service quality. Efficient customer service ensures that your beneficiaries have a hassle-free experience during claim settlement. Insurers with robust customer support systems are preferable, as they indicate the insurer’s dedication to serving their policyholders promptly.
⮚ Online Vs. offline
Online term plans are usually cheaper than their offline counterparts due to lower operational costs. Decide based on your comfort with online transactions and the differences in features. Online plans are often cheaper due to the lower operational costs of digital transactions. However, some may prefer the personal touch of offline purchases through an agent. It’s important to weigh the cost savings against the benefits of direct interaction.
⮚ Flexibility in plan
Some plans offer flexibility in increasing the cover amount during critical stages of your life, like marriage, childbirth, etc. Consider these features for future-proofing your coverage. Life changes, like childbirth, often need additional cover amounts. A few insurance companies permit you to enhance your cover figure during such occasions without healthcare evidence, ensuring your insurance grows with your requirements.
⮚ Tax benefits
Carefully understand the tax advantages as per Section 80 C as well as Section 10 (10D). These can offer additional savings on your premiums as well as claims. Premiums paid for insurance are tax deductible as per Section 80 C, and the claims received as per Section 10 (10D) are free of tax. This can result in considerable tax savings, increasing the value of the policy.
⮚ Read reviews
Please make sure you go through the social media, online forums, and review sites to understand about the insurance company’s previous record from their prevailing customers. Customer reviews can provide insights into an insurance company’s claim settlement procedure, product satisfaction, and customer service. These are invaluable parameters in selecting the right insurer that meets your needs and expectations.
⮚ Financial planning
Make sure that the insurance plan fits well into your thorough financial planning, supporting your family’s future requirements without compromising on present lifestyle choices. Integrating a term plan into your financial plan ensures it supports your thorough goals without impacting your current finances. A high Rs 1.50 crore insurance policy, for instance, must offer mental peace without compromising your potential to save for goals such as retirement or other financial goals.
Ending note
Investing in a term insurance policy for an amount of Rs 1.50 crore cover is a crucial step towards securing financial stability. It not only endows mental peace but also makes sure your dependents are taken care of when you are not there anymore. Though the decision seems daunting, focusing on the above-mentioned parameters would help you select the best term policy as per your preference and needs.