As a family’s bread earner, you would only want financial security for your family, both in your presence and absence. You would want them to have the life of their dreams without any financial worries.
Getting term insurance is one step forward in that direction. It can provide your family financial security even when you are not around. Getting term insurance is important but selecting the best term insurance policy for your family is a challenge as well.
That said, a term life insurance calculator can make it easy. We’ll tell you how. But before that, let’s cover the basics of selecting the best term insurance policy for you.
Elements to Factor in When Shopping for Term Life Insurance
An Adequate Plan
The last thing you would want is to select a term insurance plan with coverage that can turn out to be inadequate for your family. To select the right insurance coverage, make sure you keep in consideration all the expenses – be it household, or heavy expenditures such as education and marriage, debts and liabilities, medical emergencies, and inflation.
At the same time, ensure that you do not sign up for premiums you cannot afford. A term life insurance calculator can help you by providing the premiums according to the suggested coverage amount for you.
Shopping from the Right Insurer
Buying a term insurance policy for your family is like an investment. You have to carefully consider where you are buying it from. In other words, shopping from the right insurer is equally important if you want your investment to be safe and ensure zero inconvenience to you and your family. Here’s a mini guide at your rescue.
– Go for a company with high claim settlement ratio. A high claim settlement ratio indicates that the insurer is most likely to settle your claim without any hassle.
– Go for the insurer with an impressive financial performance. An insurer should have the financial means to settle your term insurance claim. Look at their financial performance over the last five years. Check their balance sheets, if available. Check their assets, debts and liabilities and solvency ratio.
Complains and Reviews: An impressive website doesn’t hold any significance if the insurer has a heavy track record of bad reviews and complaints filed against them. So, to select the right insurer, always go through reviews before making a purchasing decision.
3. Policy Terms and Conditions:
Before you go ahead and purchase term insurance, it’s crucial to know not only the benefits of term insurance policy but what you are signing up for. Therefore, read all the terms and conditions to ensure that your family doesn’t face any disputes at the eleventh hour.
4. The Benefits of the Policyholder
Different insurers and policies provide different benefits to the policyholder. For instance, some insurers provide free riders that are already included in your term life insurance policy. But it’s different with every policy.
Nevertheless, the point remains is, you must go for the policy and insurer that provides the maximum benefits to you.
Significance of Term Life Insurance Calculator
1. Suggests the Right Coverage and Policy for You
A term life insurance calculator recommends a suitable cover for you according to your age and income type. It also recommends the term period based on these details.
Now as premiums are decided according to coverage, the term life insurance calculator also calculates the approximate premium you need to pay every month for the determined period.
You also have the option to select ‘Increasing Life Cover’. This option is suitable for you in case you want to increase the cover in future as your financial capabilities rise.
2. Aids Financial Planning
As mentioned before, a term life insurance calculator suggests suitable coverage. But even if the suggestible cover goes up to 1 crore, it might not be adequate if you are to incur heavy expenses such as your children’s education fees or their marriage cost. In such a case, you would also need to have a few life savings. A term life insurance calculator can help you discover that.
3. Helps Make Investment Decisions
When you know your family has term insurance to depend on in case something happens to you, you can use some portion of your savings to expand your investment portfolio.
4. It’s Easy to Use
A term life insurance calculator might feel a little complicated to use, but it’s not. You just have to fill in three important details: your age, your income type, and term period preference. Based on just these three details, a term insurance calculator can suggest the right plan for you.
