Things to Know Before Buying Term Insurance Plan

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Buying a term plan can be stressful without complete knowledge. But investing in a life insurance plan is more important than you think. Due to unlimited uncertainties in life, it is impossible to know for how long you will live. However, if you buy term insurance plan for yourself, things become easier for those who have to survive without you. 

If you are the only breadwinner of your family, have kids, and a big loan to repay, investing in a term plan is a wise step. This is because term insurance will make sure that your family does not have to suffer financially in your absence. The insurance company will pay the amount to your family after your demise, which will make survival easier for your loved ones. 

Before buying a term insurance plan, there are several things you must be thinking about. This article will try to answer those questions in detail. 

When should I buy a term plan?

Since there is a maximum or minimum age for buying a term insurance, you should invest in the policy earlier in life. This is because with time, the premium amount will increase depending on the applier’s age and health. If you develop an illness or disease later in life, it will be difficult for you get an inexpensive policy.

What should be the term in my policy?

If you are 30 right now, buying a policy for 50 years would be an insensible decision. You should buy the policy until your retirement. It is because by the time you retire, very less number of people would be dependent on you financially. While you are young, you have more financial responsibilities, and this is why it makes sense to go for a big cover. But with age, your assets will grow, and you will probably no longer have to provide for your family. 

What is per day premium?

A number of companies have begun to market their term plans by sharing the price per day, such as – buy 1 crore term life insurance only for Rs. 25 a day. You must know that these numbers are applicable only for a particular tenure of policy and a certain age group. For example, such a policy amount would be suitable for the clients who are 25-year-old and have opted for a policy of forty years. How much the policy will cost you each day would depend on you age, medical health, and term of the policy. 

Should I buy single premium policy?

If you are required to choose between regular premium and single premium while buying a life insurance policy, many people believe that buying a single premium policy is better. However, that may not be true. With some exceptions, it does not make any sense to pay one-time premium. The best option that works for most people is yearly premiums. 

The Bottom Line Before investing in a term plan, you should try and gather as much information as possible from reliable sources. If you invest in a plan that does not suit your needs, your entire investment in the policy goes waste.