How to Identify Term Insurance According to Your Needs?

We can never foresee the future or any untimely occurrence for that matter. Hence, it is crucial for us to plan and provide financial security to our loved ones so that they can embrace a secure future.

Having said that, there are several insurance products available in the market today. They provide a variety of deliverables tailored to fit numerous requirements. And, amongst this comprehensive range of insurance products, term insurance plans qualify as the most prominent ones. In case of an untimely passing of the policyholder within the set tenure, they offer pure life cover or financial security to the beneficiaries. However, no such maturity benefit is rendered if the policyholder outlives the pre-defined tenure of the plan.

Such plans can truly help a policyholder’s beneficiaries sustain a secure future. But, when it comes to identifying the most suitable term insurance, one must always carefully consider and evaluate the following factors:

1. Opt for an insurer with higher claim settlement ratio

When it comes to monetary reimbursement, it is only essential to look for a plan with an effective claim settlement process. A higher claim settlement ratio by the insurer would endow the beneficiaries with a greater chance to receive the entire sum assured.

Keeping all these factors in mind, it would be wise to better understand your insurance needs and carefully choose the right term plan for you.

2. Consider the Solvency Ratio

The solvency ratio is a measure of the ability of a company to pay off their long-term debt and interests to survive in the longer run. The ideal solvency ratio recommended by the IRDA is 150%. The insurer you choose should have a ratio which is closer to 150%. Even a high solvency ratio is not ideal.

3. Use riders for enhanced coverage

Besides the death benefit provided by the basic term plans, you can also look at thenumerous term insurance benefits offered by other plans. Certain policies allow you to add riders to enhance your cover and minimize your risk. These may include riders, such as loss of critical illness cover, waiver of premium, disability cover, and more. You may even find a term plan with return of premium option being available in case the policyholder outlives the policy’s specified tenure. Here are some rider benefits that you can opt for: