Term insurance is a kind of life insurance policy that ends in a certain period of time. It provides a death benefit to the nominee of the policy in case of the sudden death of the policyholder.
Term insurance provides financial security to a family after the unfortunate death of their primary earning member. The insurance amount can be received in a lump sum or as monthly payouts. Term insurance gives financial assistance when the family is in dire need of it.
Some term insurance policies also take care of the family in case of a critical illness that will no longer allow you to work. By obtaining regular sums of money, it can safeguard your family against all forms of financial crisis.
Out of all the life insurance schemes, term insurance plans are the cheapest. They are of a shorter period of time yet give you adequate insurance coverage. The premium paid in term insurance is quite lower when compared to the premium that one has to pay in a permanent life insurance. Also, in the case of life insurance, the death benefit would decrease if there is a partial withdrawal of funds or if there are any pending financial liabilities.
There are numerous tips and tricks that one needs to learn so that one can save money on term insurance plans.
Earlier – The Better
When taking a term insurance, one should start early. There is a misconception that term insurance or any insurance policy should be taken only after marriage or having children. This is not true. One should take up a term insurance plan as early as possible, even before starting a family. When a policy is taken earlier, the premium amount would be less. Thus, you will be able to save money on the premium.
As you age, the premium amount would grow higher. Also, there are chances of getting diagnosed with health problems and companies can refuse to provide you with insurance.
Opting Annual Payment of Premium
In case of term insurance, you can choose to pay the premium amount during different intervals of time. One can pay the premium monthly, half- yearly or yearly. In this situation, it is always better to choose to pay the amount annually. This is because companies tend to provide discounts in this form of payment. Also, monthly installments often come with added costs and this would increase your expenditure on the term insurance policy. Hence, the better option is to choose to pay the premium amount annually.
Often, life insurance claims get rejected because of the poor health of the insurer. Thus, when opting to take life insurance, it is best to quit habits that take a toll on your health, like smoking. This can be used against you in the event of an unfortunate situation leaving your family with no financial support. Leading a healthy life is important so that your claims will not get rejected on such grounds.
Never hide any of your medical conditions from the insurance company. This would turn against your interest in the end, your insurance claim would be rejected.
Also, ensure to clear all your queries with the insurance agent. Make sure that you understand the plan well before you invest in it.
Insist on Medical Tests
Most insurance companies do your medical checkup before they provide you with an insurance policy. However, if any insurance company allows you to take up a policy without any of the test results, it is probably a scam.
You have to insist on conducting a proper medical examination of your body and checking your health status. If the insurance company shows reluctance, it is best to change your company altogether.
Add Some Riders
In case the term insurance does not cover all your insurance needs, do not go for another term insurance and end up paying a premium for two different policies. It’s a wiser option to opt for Riders that would provide added protection to the plan. Insurance companies often provide a different type of riders and a mix of them can be used to secure yourself and your family.
Buying a New Insurance
When your term insurance is about to end, do not wait for the last minute. Before the plan ends, one must be insured under a new plan. This way, you can avoid the interim period where you will not be insured. Hence, there are no risks and you will be always insured.
Compare, Compare and Compare!
Often, we jump on to the first term insurance policy that we lay our eyes upon and later regret it. There are so many different term insurance policies in the market. It is extremely important to compare between the available plans and choose the term insurance that best suits your needs. If you take up the first insurance policy without research, there is always a chance of you finding a better plan later on.
Also, comparing helps you to find the cheaper insurance policy between two that provide the same coverage. Hence, never let your money go wasted. Compare and then take an informed decision on your investment option.
You have a plethora of term insurance plans to choose from. But it is indeed quite a difficult task to choose one plan that would serve all your insurance needs. Hence, one has to study the various insurance policies available and choose one that best suits their needs.
Avira, for example, brings forth several term insurance plans that are customizable according to your needs. Avira term insurance plans are some of the best term insurance plans in the market.
Insurance companies have made it easier by often categorizing the term insurance plans on a different basis, for example, on the basis of age, or on the basis of your relationship status. Thus, making the right choice is the first step to save money on term insurance.
Term insurance policies are opted more simply because of the tax benefits that they provide when compared to other options. But the tax benefits should not be the only reason you take up a term insurance policy. In the end, you might spend more than what you think. Hence, it is important to set your goals precisely and think about what exactly you expect from the term insurance plan.
By keeping in mind a few of the above tips, one can choose for the ideal term insurance plan and also save good money.