Follow These Five Steps Before You Buy Term Insurance

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Taxes, insurance and savings may sound insignificant and dull. However, such subjects need to be understood properly so that you can secure your own financial future, as well as the financial future of your loved ones. Sadly, as many people are unable to comprehend these subjects, they miss out on the opportunity to safeguard their financial future whilst they still can.

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One such type of insurance that can protect your family during a crisis is called a Term Plan. It simply offers financial protection to your family in case of a sudden and untimely death. While each company may have added benefits or tailored features, it is important you select a term insurance policy that best suits you.

Term insurance plans are comparatively cheaper than most insurance plans, mainly because they carry no cash value. It only aims to provide pure financial protection benefits, which means that in case of the insured party’s death, the beneficiaries get the sum assured. Thus, it is ideally suited to those who shoulder the responsibility of being the breadwinner at home.

Now, if you have made up your mind to purchase term insurance, or at least are contemplating the idea, here are a few things you should keep in mind:

1. Sign-up when you are young: Buying a term plan when you are young gives you the chance to make timely payments at low premiums, as you are less prone to sickness and have lesser financial burdens. Besides, as you grow older, the insurance premium will be higher.

2. Know what you need: Your current requirements determine your term insurance. Before you make a purchase, keep in mind all aspects that will affect you in the near future, such as inflation, children’s education, a new house etc. Consider such factors before you freeze on paying a fixed sum.

3. Buy term insurance online: Just like everything else online, buying insurance is easy and convenient, too. Other than giving you a lot of options to compare and choose from, it saves you time and money as well. Plus, if you have to renew your plan, you can do it in a matter of minutes.

4. Look for larger life cover: It is advisable to opt for a higher life cover for the same premium. Since term insurance is quite affordable, it wouldn’t come in the way of your current lifestyle.

5. Innovative features: Since term insurance plans carry no cash value, many insurance companies tend to sell it by tailoring its features and offering irresistible discounts, such as cutting premium rates for individuals like non-smokers or people who abstain from drinking. No matter what the gains, you should select a plan that suits your interests and not your wallet.

If you are planning to buy term insurance, April is the best month to do so. It is the first month of the financial year, giving companies and agents enough time to attend to your requirements. Also, since the subject of term insurance is of greater importance to you and your family, it is advisable to do it yourself, rather than selecting an investment broker to do it for you.