Introduction

Term insurance plan is a must for a working individual to protect against the financial loss caused due to unexpected and unforseen events. It cannot protect against the physical or mental loss or avoid any mishappening but can very well compensate in terms of money against the loss. If you are a working person or sole earner of the family you must take a term insurance in case any unexpected events happen, so atleast your family members should not go through any hardship in your absence.

Now, the question arises how to select best term insurance plan for 1 crore. You must be thinking, Why 1 crore?, well it is not necessary to buy a best term insurance plan for 1 crore only as it depends on lot of factors and  coverage amount can vary according to your needs. So, In this article we are going to help you select best term insurance plan for 1 crore or the amount you really require, we are going to give you some important points to consider while selecting a term insurance plan.

Things to Consider while selecting Best Term Insurance Plan For 1Crore

Here are the things to keep in mind while selecting a Term Insurance Plan

1. Determining the Cover Amount

As the title suggest ‘How to Select Best Term Insurance Plan For 1 Crore‘ it doesn’t mean you should blindly go for a coverage of 1 crore, It may be or may not be enough for you. It depends on various factors such as yor current age, financial obligations, liabilities, dependents, current and future estimated icome and so many other factors. So, you have to be very careful and consider all these factors while deciding the cover amount. While there are various methods to calculate the cover amount the most general and simple of them is it should be atleast 15 to 20 times your curent annual income. 

For example, if your annual income is 10 lakhs your term insurance should be in between 1.5 crore to 2 crore. It totally depend on you to decide the cover amount, don’t unnecessarily choose a higher cover amount that it may become difficult to pay the premium as higher the cover higher will be premium. Also, don’t choose a lower cover amount because of low premium. Also, keep in mind your current liabilities and future estimated income as it will rise with time. Some companies offer plan that you can increase your existing cover amount to some extent at a major event in your life like marriage, birth of your child, you can opt for these plan as with time your income and liabilities will increase and you may require more cover amount.

2. Policy Duration

After the cover amount is decided for best term insurance plan for 1 crore, the next step should be deciding the policy duration. Select a policy duration that aligns with your financial goals & needs. Some companies offer term insurance for 100 years that doesn’t mean its the best as you will have to pay higher premium on that. The policy duration should be between age 60 to 65 years. You can save some money if you can select for lower duration of premium paying term. Some companies offer discounts on premium if you select premium paying term less that policy duration, it may hit your pocket initially but as your income will increase it will not affect you much. Also, you have to pay for less year so you can invest that amount wherever you want after your premium paying term is over.

3. Riders & Add-ons

Riders and add-ons can provide additional benefit on your term insurance policy. Basically riders are extra features that are added to enhance the benefits of your policy. The riders like Permanent Total Disability(PTD), Accidental Death Benefit(ADB) & Critical illness can provide extra benefit to your term plan.

A PTD rider can help you in situation when you survived an accident but you became permanently disabled and unable to work, your future premiums will be waived and some benefits will be provided in this situation.

With ADB rider in case of death due to accident some additional cover will be provided in addition to your policy sum assured.

In Critical Illness rider if you are diagnosed with any major disease some amount will be provided to take care of medical expenses of that disease. You should check and compare with different policies to know what diseases are covered in the policy.

Taking above riders will increase your premium amount a little bit but it is worth paying, you should consider these riders in your term insurance policy.

4. Claim Settlement Ratio & Amount Settlement Ratio

Claim settlement ratio is the percentage of claims settled by the insurer against number of claims received in total. Claim settlement ratio is very important parameter while selecting the best term insurance plan for 1 crore or the amount you need, it helps in selecting the plans of insurers with highest claim settlement ratio. It is important because you don’t want your family members to go through lot of hardship in receiving the claims after you, so a good company with good record of claim settlement is always preferable for term insurance for hassle free settlement process. You can find online the claim settlement ratio of all the insurance company & select the best term plan based on that.

Amount settlement ratio is the percentage of total claim amount settled by the insurer against total claim for insurance amount received by it. Amount Settlement Ratio is important because some insurance companies tries to reduce claim amount by giving some unnecessary reasons and many innocent people fall into their tricks. So, always try to select the term plan of a insurance company that has maximum amount settlement ratio, that can also be checked and found online.

5. Market & Online Review

It’s always good to take second opinion, yes you read it right but, that doesn’t mean you just take advice of any random person or from here & there. By second opinion it is meant, the advice of people who are experts in that field or people who have been using the product, as they are in better position to tell about the pros and cons of that product. You can also check online reviews that are available on various platforms as they are easier to access. Don’t just randomly buy any policy because it is an important decision of your family that can cost your families financial future in your absence.

6. From Where to Buy The Term Plan

After you have made your decision of buying the term insurance plan based on th points we have given above, the next big and most important step is to decide, ‘from where to buy the term plan?’. We are going to make it easy for you to decide it. There are two different ways you can buy a term plan: Offline and Online.

While going through the offline mode means you will need help of some people related to insurance field or insurance agent, Be careful, as it can cost you more as you will have to pay more premium, if you go through an agent as some part of premium will go to the agent as commission. Also, there is more chance of agent manipulating you to get a policy that can offer him higher commissions. Also you will have to arrange copies of your documents and visit some offices that can be hectic and consume lot of time. So, unless you know someone whom you can really trust then only go for offline mode.

In the online mode you will have a lot of options and platforms available to choose from. There are many websites and apps that compares term plans of different insurers and make it easier for you to decide. Also you will get many discount and offers if you go through online mode.

You can also directly visit the website of the insurance company you have decided to buy. It is very easy and simple steps are there to buy a term plan after entering the required information and documents, you will be asked a date for your medical checkup and tests and they will schedule your test on that day with lab nearby you. Once, you have given your test and nothing adverse is found your policy will be issued in few days.

Conclusion

We believe with the help of above points deciding cover amount, policy duration, rider and add ons, researching on claim settlement ratio and amount settlement ratio, researching online and market reviews, you will be able to decide how to select best term insurance plan for 1 crore or more or as per your requirement. Always do your research and take advice from experts while making any decision you can also check the link https://finstoppe.com/financial-plan-most-common-problem-faced/ if you are facing any problem in financial planning. The above points will definitely help you make a good and informed decision and you will be able to buy best term insurance plan for 1 crore….no no, as per your requirement.

That’s all from us for now, Have a great financial journey.