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Term insurance plans are the best way to provide financial security for loved ones of the insured in case any unfortunate incident. Compared to traditional plans, online term plan is available at a lower premium, which makes it easier for a larger number of people to procure insurance.
Term plans do not provide survival or maturity benefits, which is why people try to opt for the cheapest policy. Although saving money on the insurance premium is beneficial, it must not be the only deciding factor. Cheap is not always the best and considering some of the below-mentioned factors while making the decision is very important.
Higher Policy Tenure
Several insurance companies now offer term plans with longer tenure, which ranges between 35 and 50 years. With improved medical facilities and technical development in the healthcare sector, life expectancy has significantly increased. Checking the tenure being offered by the insurance provider before availing the policy is advisable. The best life insurance plans offer longer tenure, eliminates the need to purchase another policy in case the first one expires.
The majority of the term insurance plans have a maturity age between 65 and 80 years. As a person grows older, the possibility of suffering from various sicknesses and critical illnesses also increases. Individuals are advised to choose a plan with a higher maturity age to ensure coverage is available at an older age when the possibility of ailments is higher. The best term plan will be one that has a maturity age of over 75 years for the policy holder to enjoy coverage during the senior years.
The claim rejection ratio is one of the most important factors that must be considered while choosing term insurance plans. Claim rejection ratio is the number of claims that are not paid as a percentage of total claims made during a year. Benefits of these life policies are given to the beneficiaries only on the death of the insured. Opting for an insurance provider that has lower claim rejection ratios will be advantageous to the family members. The procedure and time taken for claims to be cleared must also be considered to ensure the beneficiaries do not undergo too much stress while already dealing with the sorrow of losing their loved one. Selecting a reputed and reliable insurer is an important factor that must be considered while availing term plans.
Low Claim Pending Ratio
While ensuring the claim rejection ratio is lower, the claim pending ratio must also be considered. If an insurance company has a high pending ratio it may be reflective of inefficiencies of the service provider while settling the claims. According to the regulatory guidelines, claim settlements must be completed within six months and if an insurance company has a higher pending ratio, it is recommended to choose another service provider to buy the best term insurance.
An increasing number of users are going for online insurance. This is because they are able to acquire higher coverage at lower costs. Insurance companies are willing to offer the cost savings by eliminating the intermediaries through the online channel, which reduces the premium on term plans. However, potential buyers need to understand that the online quotes are indicative and the actual premium amount may differ. Certain factors, such as medical history, current health conditions, and lifestyle play an important role in determining the actual premium and checking the exact amount before making the decision is very important.
Individuals must ensure the procedure to acquire the insurance coverage is not complex. Moreover, the claim filing process should also be easy and quick to prevent the beneficiaries from having to run from one department to another to receive the policy benefits. Investors are advised to check the past history and track records of the various insurance providers before making their final decision.
While availing term insurance provides peace of mind to the investors, doing some research before opting for one is crucial. It is very important to provide accurate and truthful information to avoid rejection. Considering the above-mentioned factors before buying term plans will go a long way in ensuring financial security to your loved ones.
About HDFC Life
HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.
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