Term insurance is a life insurance policy which offers financial security to the family in case of the death of the insured.it is a pure death benefit policy and is important to ensure that the nominee and the family are taken care of. There are many life insurance companies in the market today which offer term insurance and thus, one has to ensure they buy the best one. As one does not want any problems and struggle for their family when they are not around, they must understand the different plans and the factors affecting premium.
To be able to buy a good term insurance policy, the best way is to compare term insurance. Some of the reasons why one should compare term insurance are:
- Buying the cheapest policy is always not the best option. Comparison helps to get an affordable policy with a good coverage.
- Comparison helps to get the policy which offers proper coverage without compromising on other aspects
- When policies from different companies are compared, the service standards and the claim settlement ratio can also be compared which is the key differentiator between a good and bad policy
Essential Factors to Remember While Comparing Term Insurance
Following are some of the essential factors which must be kept in mind when one wants to compare term insurance:
- Premium and Coverage: With an affordable premium, one must buy a policy which has a good cover. The sum assured should be such which will take care of all the debts of the family and will also ensure they have no financial stress and lead a comfortable life.
- Features: The benefits and features of the policy should be carefully compared. Add on benefits and flexibility of the policy are the key features which must be looked for.
- Riders: A basic term insurance plan can become more feature rich with some riders. Most of the riders come at an additional cost and thus, comparing and choosing the ones which might be beneficial must be taken. The riders that can be chosen are accidental death benefit, critical illness cover etc.
- Reputation of the Insurer: Before buying a term policy, one must ensure that the insurance company is stable and reliable. The goodwill of the company and their financials are two important aspects that must be seen.
- Claim Settlement Ratio: This ratio is the ratio of claims settlement against the number of total claims registered. A company with a higher ratio should be preferred as this means there are higher chances of settling claims. If the claim does not get settled, the entire purpose to buy a policy is lost. Thus, the claims settlement ratio is one of the most essential things to compare.
- Persistency Ratio: This ratio indicates how persistent with the clients with policy renewal. A company which has a good reputation will always have a good ratio.
How to Compare Term Insurance
One of the most convenient and simple ways to compare term insurance is to compare online. There are some good insurance aggregator websites which use an online term insurance premium calculator and help the insured not only calculate the premium amount but also compare policies from different insurance companies.
It is simple to compare policies on these websites. They ask for some information like:
- City where the insured stays
- Annual income
- Life cover they want
- Smoking Habits
Apart from the above, the website will also ask for contact information. After all this information is filled in, the website gives the quotes of various companies. Apart from the premium, details of the policy are provided as well.
These websites give all required details which are needed to compare policies. They give coverage details, claim settlement ratio, add on riders, etc. These websites also give the option to choose the add-on benefits and see their impact on the total premium payable. There are options to change duration and other terms to be able to see the effect on premium.
After comparing policies on the above ground and in a simple way, one can easily buy the right one. To compare term insurance is important as this enables the insured to buy a good policy without compromising on the other aspects. Comparing policies has become simpler with various websites. They source information from all companies and help to choose a good policy. They also help to pay the premium online and buy the policy. Comparing policies is the best way to get a good policy which will take care of the family.