Term insurance plans have emerged as a go-to life insurance policy that people prefer in a large number. These plans are taken for a specific period and provide you with a death benefit. You can also choose from a range of riders that add value to the plan.
When it comes to choosing the best term plan, you need to consider plenty of things that will help you make a smart decision. No doubt, a term plan is the most straightforward and beneficial life insurance policy you can take today.
If you are a first-time buyer of a term plan, it is important to avoid some common mistakes. To further prevent you from making them, we have prepared a list of those mistakes to guide you.
#1 Insufficient Coverage
It is the most crucial mistake that you might commit, but you must avoid it. Insufficient coverage is not only an utter waste of money, but it will also not benefit you in any way. The general rule of thumb is taking a term plan with an amount 8 to 10 times your annual income. This way, you can pick the best term insurance online.
#2 Short Tenure
Insufficient coverage is not the only biggest mistake you can make, but the shorter tenure of your policy is a dumb mistake. Though it is a common mistake, many people are still committing the same blunder. Shorter tenure is expensive and non-beneficial as well. It is recommended to take a term plan that lasts up to your retirement age.
#3 Delaying The Term Plan
It goes without saying that buying a term plan as early as possible is the best way to use it optimally. The premium keeps on increasing with age, and to avoid it, you need to buy a term plan at a young age. When you are young, you might not feel the need to cover your medical expenses, but in your 30s – 40s, you may feel its need.
#4 Hiding Medical History
When you apply for a term plan, you need to disclose all your medical information. Not disclosing your health complications can put you in great trouble. For instance, when your death is traced back, and it is found that it was caused due to a health issue you had while taking the policy, you may not get the claim.
#5 Not Buying A Policy Online
Today no one goes to an insurance agent as there are plenty of online insurance companies that are offering comprehensive products and services. Not buying a term plan online will be a foolish move. You can also compare different policies online and find a suitable term plan for yourself. Hence, it is always best to buy online.
The Bottom Line
You can optimally use a term plan when you make a smart decision. The above mentioned were some of the common mistakes that people tend to make. You must be aware of these mistakes and try not to commit them while purchasing your term plan.