If you are purchasing term insurance online, it is undoubtedly a great decision, considering how these plans offer pure life coverage for a reasonable premium amount. However, there are several things that you should check before you purchase any term plan online. Here’s looking at some of these aspects in more detail below.
What to Look For While Purchasing Term Insurance Online?
Here are some of the key items that you should add to your checklist while buying term insurance online.
- Policy Coverage- Do you have your ideal coverage amount chalked out already? If not, do it first and then use a term insurance calculator online to estimate the coverage amount you may need. However, instead of solely focusing on affordability, consider using the Human Life Value (HLV) method, which accounts for your income, liabilities, and future financial needs. Aim to get close to your required coverage amount without compromising your ability to pay the premiums comfortably.
- Plan Comparisons- Compare policies offered by multiple insurers, checking for the tenure (should be suitable as per your needs), coverage amount (should be just what you require), and the premium amount for the same (should be reasonable with a focus on adequate coverage and financial stability of the insurer).
- Insurer’s Reputation & Credibility- Always check whether the insurer is reliable enough. Do this by checking the company’s presence in the market, reviews, ratings, and customer feedback on claims and other processes. Go for an insurer with a higher claim settlement ratio (CSR). However, CSR alone does not provide the full picture – consider the incurred claim amount settlement ratio as well, which reflects the proportion of total claims paid against total premiums collected. You will find these details on the official website of the IRDAI. Additionally, under Section 45 of the Insurance Act, 1938, insurers cannot reject claims after three years of policy issuance, unless fraud is proven. This legal protection ensures that minor misrepresentations that do not amount to fraud cannot lead to claim rejection after this period. Understanding this legal protection is crucial when choosing an insurer.
- Added Factors- There are several other aspects worth noting while buying term insurance online. These include the policy terms and conditions, fees and charges, inclusions/exclusions, premium payment frequency and personalisation options for the sum assured payout. If you expect your financial obligations to grow over time, look for plans that offer life-stage benefit options, allowing you to increase coverage upon marriage, childbirth, or major life events.
- Riders- You should see whether the policy has suitable riders that you can add to your plan. This will help you widen your coverage considerably through add-ons like waiver of premium, accidental death and disability, and critical illness riders. However, keep in mind that critical illness riders cover only a predefined list of diseases and that accidental death benefits may have conditions related to the time frame within which death must occur following an accident, which varies across insurers. Look at these available riders and choose the ones you want before going ahead with your decision.
Choose the Right Term Plans Carefully
While purchasing term insurance online, it’s important to keep an eye on all the key aspects mentioned above. Take a little time to filter out the plan that genuinely fits your needs, without compromising on coverage, tenure, policy features, or the insurer’s reputation. This is where considering established insurers like SBI Life Insurance can help you make a more confident choice. On that note, here’s to a smooth online term insurance purchase process ahead!