Voice of Commonwealth

Avoid these common mistakes when purchasing term insurance!

Share

Hyderabad, India (CU)_ Term insurance is one of the best strategies to protect the financial future of your family. It is a long-term commitment that offers financial support for your family’s dreams and life goals while you are absent. This choice is important because it will influence the quality of life your family will experience after your death. It is vital that you acquire the plan precisely and without error the first time around. Here are some of the most prevalent purchasing errors and how to avoid them.

Relying on others to submit the application

Filling out the form yourself, rather than relying on your agent/financial adviser or a close member of your family, is essential if you wish to provide correct and comprehensive information. Filling out the form and giving accurate information is the easiest way to prevent uncertainty when purchasing insurance.

Not doing premium comparisons

In a term insurance policy, the coverage amount to premium ratio is quite high. This is because a high amount of coverage may be provided for a low premium. Different insurance carriers will continue to charge different premium rates. Hence, before choosing a plan, it is advisable to evaluate the premiums for term insurance offered by several insurers. On the other hand, the policy with the lowest price cannot be the best choice if it does not provide more complete coverage.

avivaindia.com

Selecting the improper payout option

It is difficult to handle a large sum of money without the necessary knowledge. To avoid your family losing claim money via poor investment selections and being left without enough money to meet their genuine requirements, be careful to select the appropriate claim pay-out option. Consider all available alternatives for customizing the claim payout, such as the lump sum pay-out option, the monthly income pay-out option, and the lump sum + monthly income pay-out option. Then, based on your family’s demands and financial ability, pick the best option.

Not adding riders

Riders are add-ons that pay out additional money in case of any serious occurrence. For example, a critical illness rider will offer an extra payout if you are diagnosed with one of the insured serious diseases. The addition of such riders to your basic term insurance policy boosts the benefits and offers comprehensive coverage.

Investments with a shorter term

The primary purpose of life insurance is to protect life goals. Irrespective of your current age, select a term insurance policy with a minimum duration of 60 years. Generally, by that time, individuals would have achieved their life goals, such as having kids and purchasing a home.

Read more

More News