Seven mistakes you should avoid while choosing a term insurance policy

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Seven mistakes to avoid when choosing a term insurance policy

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New Delhi: There is no denying that the world is full of uncertainties, which makes a life insurance plan very important in everyone’s life.

The motivation behind having a life insurance policy goes beyond protecting an individual’s financial health. It is about the financial protection of the family in the event of the sudden death of the breadwinner, the achievement of long-term and short-term financial goals such as child marriage or higher education, retirement savings, etc.

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Insufficient insurance coverage

It has been observed that many people tend to underestimate their needs and thus end up choosing a low cap. When you choose a term insurance plan, you should consider coverage of at least 8 to 10 times your annual income. Also, make sure you can override your insurance coverage if your family requires more money.

Shorter policy term

This is one of the most common mistakes people make while choosing a range plan. Insurance with a shorter policy term may allow you to make the wrong decision. If you choose a 20-year plan at age 25, it will cover you until age 45.

Not disclosing important information

It is very important to disclose all important information for the smooth processing of claims. This can include any pre-existing medical condition, family medical history, and risky lifestyle choices such as smoking and engaging in hazardous occupations.

Failure to verify claims settlement ratio

One of the most important factors when choosing an insurance company is knowing the company’s claims settlement ratio. The Claims Settlement Ratio is a measure used to assess the reliability of an insurance company in terms of reimbursement of claims. This will give you peace of mind knowing your death claim if this happens, it will be paid without any hassle for your loved ones. Moreover, the claims settlement process should not be boring and the customer should have a hassle free experience. The claims settlement ratio also helps in understanding the company’s overall performance. Hence, it helps you in making a better decision when choosing an insurance company.

Choose the first option

Before buying a term policy, you should do a proper research to choose the right guaranteed amount and reasonable premium. If you want to get the most out of your term plan, be sure to study the plan carefully and choose additional coverage. Make sure you don’t always choose the first plan that comes into your path right away.

Choice of excessive riders

If you want to get the most out of the policy, add-ons will always come in handy. Having an unnecessary number may result in a higher premium, which you may not need in the future. If you like it, just buy the add-ons, otherwise leave it. This will make your document affordable.

Postponing the purchase decision

Another mistake most people make is delaying their decision and waiting. This is something you should avoid!

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