Steps on How to Buy Term Insurance Online

What are the Steps to Buy Term Insurance Online?

Understanding how to buy term life insurance can help you secure a suitable policy with ease. Here’s a step-by-step process to guide you:

1. Enter Your Details: Visit the insurer’s website and provide details such as your contact information, date of birth, gender, tobacco usage, and monthly income. These details help the insurer assess your eligibility and calculate the premium based on your risk profile.
2. Select Policy Tenure and Coverage Amount: If you are younger, opt for a longer tenure, while middle-aged individuals might consider a shorter term. Buying early ensures lower premiums and higher coverage, giving you long-term financial security while keeping costs manageable.
3. Choose a Premium Payment Mode: Insurers offer multiple payment options, such as:
   • Monthly
   • Quarterly
   • Bi-annual
   • Annual

   Selecting a convenient payment schedule helps manage your budget efficiently. Additionally, you can choose a payment term, including:

   • Regular Term (pay throughout the policy duration)
   • Limited Term (pay for a fixed number of years)
   • Single Term (one-time lump sum payment for coverage)
4. Decide on Death Benefit Payout Mode: Policyholders can select from different payout options for their nominee:
   • Lump sum amount: A single payout, useful for clearing debts or major expenses.
   • Lump sum with regular monthly income: Helps maintain a steady cash flow while covering immediate financial needs.
   • Fixed monthly payouts for a set tenure: Ensures stable financial support for dependents over a specific period.
   • Increasing monthly payouts: A growing monthly benefit to counter inflation and rising expenses over time.
5. Select Additional Riders: Enhance coverage with riders like accidental death benefit or critical illness cover for added financial security. These riders can provide extra payouts in case of unforeseen events, ensuring additional protection for your family’s needs.
6. Complete KYC Requirements: Submit identity, income, and address proof, such as Aadhaar, PAN, utility bills, or passport. Ensuring proper documentation speeds up the verification process and prevents delays in policy issuance.
7. Provide Medical Information: Disclose details regarding height, weight, medical history, lifestyle habits, and any pre-existing conditions. Accurate disclosure is necessary to avoid claim rejections in the future and determine the appropriate premium.
8. Health Check-up (if required): Depending on your age and coverage amount, insurers may ask you to undergo medical tests. These tests help determine your current health status and assess any risks, affecting your premium amount.
9. Review Terms & Conditions: Carefully go through policy exclusions like deaths caused by natural calamities, substance abuse, or illegal activities. Understanding these clauses ensures there are no surprises for your beneficiaries at the time of claim settlement.
10. Make the Payment Online: Pay through net banking, credit/debit card, or UPI. Upon approval, a soft copy of your policy will be emailed, and the hard copy will be mailed later. Ensure you store these documents safely for future reference.

How to Choose Suitable Term Insurance Online?

Choosing an appropriate term insurance plan involves thorough assessment and consideration. Here’s how you can make an informed choice while understanding how to buy term insurance:

1. Assess Your Requirements: The sum assured should be enough to meet your family’s financial needs in your absence. To calculate this, consider factors like:
   • Your current annual income
   • Number of financial dependents
   • Outstanding liabilities (loans, mortgages, etc.)
   • Your family’s lifestyle and future expenses
   • Inflation rate
   • Investments toward financial goals like children’s education

   Most financial advisors recommend selecting a sum assured that is at least 15-20 times your annual income for adequate coverage. A higher sum assured can provide long-term financial stability for your dependents.

2. Choose Your Insurer Carefully: Not all insurance providers offer the same level of service and reliability. Look for factors such as:
   • Claim Settlement Ratio (CSR): A higher CSR indicates the insurer has a good track record of settling claims promptly. Choose an insurer with a consistently high CSR to ensure a hassle-free claim process for your family.
   • Solvency Ratio: This metric reflects the financial stability of the insurer and their ability to meet payout obligations. A higher solvency ratio means the insurer is financially sound and less likely to default on claims.
   • Grievance Ratio: A lower grievance ratio means fewer customer complaints, indicating a smoother claims process. This shows that the insurer is responsive and resolves customer concerns efficiently.
   • Additional Benefits: Look for options like a waiver of premium in case of permanent disability or terminal illness, which can add value to your policy. Some insurers also offer riders like income replacement benefits or accidental disability coverage.
3. Use a Premium Calculator: Most insurers offer an online term insurance calculator to help you estimate the premium for your chosen coverage. Ensure the premium amount fits within your budget while providing adequate protection. Compare different premium amounts with varying coverage levels to select the best-suited policy.

Final word

Death is one of the most stressful and traumatic events for the deceased person’s family. And, if the person is the breadwinner, the loss of income adds to the turmoil. So, now that you are aware of how to buy term insurance, make sure that you compare the details, buy a suitable term plan online, and protect your family from future financial hardships.

FAQs on How to Buy Term Insurance