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How to Compare Term Insurance Online?

Comparing term insurance online involves evaluating factors like premium amount, coverage options, riders, claim settlement ratio, and customer reviews to find the most suitable plan.

  • 4,997 Views | Updated on: Apr 15, 2024

Term insurance plans are also one of the most affordable forms of life insurance. This makes them highly popular among individuals. However, sometimes it is difficult to choose from a variety of products available in the market. This is why thoroughly comparing term insurance plans is often suggested before deciding to buy one.

Key Takeaways

  • Start by researching term insurance plans offered by various insurers and use online comparison tools to assess their features and benefits.
  • Utilize premium calculators available on insurance websites to estimate the cost of coverage based on factors such as age, coverage amount, and policy term.
  • Evaluate the coverage amount (sum assured) offered by different plans to ensure it meets your financial obligations and provides adequate protection to your dependents.
  • Compare the policy term options available, considering factors like your age, financial goals, and dependents’ needs to choose a suitable duration for coverage.

How to Compare Term Insurance Plans?

Term insurance stands as a fundamental pillar of financial security, offering individuals and families a straightforward and affordable means of protecting their loved ones’ futures. However, with a plethora of term insurance plans available in the market, selecting the right policy requires careful consideration and comparison. To navigate this process effectively, let us explore a step-by-step guide on how to compare term insurance plans:

Determine Your Coverage Needs

Begin by assessing your financial obligations, including outstanding debts, future expenses, and income replacement needs. Determine the amount of coverage required to adequately protect your family’s financial well-being in the event of your untimely demise.

Compare the Sum Assured

The most commonly selected figure for the sum assured in India is ₹1 crore. It is largely believed that such a sum is enough to secure the future of your spouse, children, and other dependents. While this figure is significant to meet most costs, it may or may not be ideal for everyone. When you pick a sum assured, it is essential to know your family’s overall requirements.

Moreover, since the sum assured directly impacts your premiums, picking a higher or lower sum assured could also depend on your income and other expenses. When you compare term plans online, check the sum assured offered by each insurer and compare it to the premiums. Many term plans offer a sum higher than this, too. See if that is what you need. If you are worried about the premiums, consider buying insurance at an early age. Insurance companies charge you the least when you are young.

Understand the Features of Various Plans

While comparing plans, make sure to browse through all their features. Some common ones include flexibility in payouts (one-time, monthly, etc.), flexibility in premium payments (monthly, quarterly, semi-annually, annually), the option to change the cover amount later, etc. It helps to pick a plan that is flexible because your needs are bound to change with time. Hence, having the option to make alterations to your policy as per your changing lifestyle can be of great advantage.

Check the Claim Settlement Ratio (CSR)

The claim settlement ratio depicts the number of times an insurer settles claims in a year. So, if the CSR is 90%, the insurer settled 90 out of 100 claims in a year. The higher the number, the better it is, as this reduces the chances of your claim being rejected at a crucial time. A high CSR also shows the reliability and brand value of the insurance company in the market. Since a term insurance plan is a long-term commitment, it may be advised to choose a plan from an insurance company that enjoys a good reputation in the insurance industry.

Compare Riders

Another advantage of comparing plans is that you get to choose multiple riders that can enhance the coverage of your policy. When you compare term plans, make sure to go through the riders each one offers. Pick the ones that you think can benefit you, such as a critical illness rider, permanent disability rider, or an accidental death rider. Now compare the price of adding these riders. Riders usually come at a nominal cost but can still affect the overall premium for a policy. Make sure you pick a plan that remains cost-effective, irrespective of the riders you select.

Examine Policy Features

Scrutinize policy features such as conversion options, portability, and renewal provisions. Look for policies that offer flexibility and convenience, allowing you to adjust coverage or convert to a permanent policy if your needs change over time.

Evaluate Customer Service and Support

Assess the quality of customer service and support provided by insurance companies. Consider factors such as ease of policy issuance, responsiveness to inquiries, and efficiency in claims processing to ensure a smooth and hassle-free experience.

Why is it Important to Compare Term Insurance Plans?

One of the most significant decisions individuals can make is securing adequate life insurance coverage. Among the various types of life insurance, term insurance stands out for its simplicity, affordability, and focus on providing pure protection. However, with a multitude of term insurance plans available in the market, the importance of comparing them cannot be overstated. Here are some reasons why you must compare term plan from different insurers to find a policy that is best suited to your needs:

Tailored Coverage

Not all term insurance plans are created equal. Each insurance provider offers a variety of policy options with different coverage amounts, term lengths, and additional features. By comparing term insurance plans, individuals can identify policies that align with their unique financial goals, family needs, and budgetary constraints. This allows them to tailor coverage to suit their specific circumstances, ensuring they receive the protection they need without paying for unnecessary features.

Cost Considerations

Affordability is a key factor when choosing a term insurance plan. Premiums can vary significantly between insurance providers and policies, depending on factors such as age, health status, coverage amount, and term duration. By comparing term insurance plans, individuals can evaluate premium rates and identify policies that offer the best value for their money. This enables them to secure adequate coverage at a price that fits within their budget without overspending on unnecessary expenses.

Understanding Policy Exclusions and Limitations

All insurance policies come with certain exclusions and limitations that define the scope of coverage. By comparing term insurance plans, individuals can carefully review policy documents to understand what is covered and what is not. This helps prevent unpleasant surprises later on and allows individuals to make informed decisions about their insurance coverage. By understanding policy exclusions and limitations upfront, individuals can avoid misunderstandings and ensure they have realistic expectations about their insurance coverage.

To Sum it Up

A term life insurance comparison can help you buy a policy that is perfect for your needs and those of your family. Not only does it result in cost-effective options, but it also lets you purchase a plan that has a wide variety of offerings with the support and backing of a trustworthy brand name. It eliminates all scope for doubt and ensures that you lead a stress-free life with peace of mind.

Therefore, before buying a term plan, make sure to compare various plans and find out what is best suited to your requirements. It only takes a few minutes and safeguards your loved ones for a long time to come.

FAQs


1

What is the importance of the claim settlement ratio in comparing term insurance online?

The claim settlement ratio indicates the percentage of claims settled by the insurance company against the total claims received. A higher ratio implies a better track record of honoring claims.



2

Should I consider riders or additional benefits when comparing term insurance online?

Riders such as critical illness coverage, accidental death benefits, and waiver of premium can enhance the coverage of your term insurance plan. Evaluate whether these riders align with your needs and budget.



3

How can I ensure the reliability of the insurance company when comparing term insurance online?

Look for customer reviews and ratings on independent platforms to gauge the reputation and reliability of the insurance company. Also, consider the company’s financial strength ratings provided by rating agencies.



4

What should I do after comparing term insurance online?

After comparing different term insurance plans online, shortlist a few options that meet your requirements and budget. Then, consider consulting with a financial advisor or insurance agent to get personalized advice before making a decision.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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