Buying an online term plan has become very common these days. The main reason behind this is the convenience they offer. The term plans can easily be bought in a short span of time. Additionally, they are less expensive too. These factors make the online terms plans from large insurance providers like Kotak Life Insurance much sought after. However, you must be cautious and keep a few things in mind before you choose an online term plan. Take a look at this article to find out what they are.
Factors to consider when buying an online term plan
1. Tenure :
A term plan is taken to secure the lives of your loved ones if you were to die unexpectedly. As a result, you have to analyze the term for which you want to stay protected. The earnings from a term plan typically work as an income substitute so it makes sense for you to stay protected till an age when you would still be earning. If however you have young children, look to buy a policy that will continue for a longer period and ensure maximum protection to your kids for the longest possible time.
2. Sum assured :
Next, you have to decide the value of the term plan. This is the sum assured that your kin will get at the time of a claim. Keep all your expenses, such as the EMIs you pay, the cost of your children’s education, the monthly utility costs, etc in mind when selecting the sum assured. If you were to die, your family members should have enough money to pay off all the liabilities and bills and enjoy a similar lifestyle they did with your income.
3. Payouts :
You can opt for a lump sum payout of the death benefit or you can opt for periodic payouts. This is an important factor to consider. If you have dependent family members, you can choose to divide the death benefit in parts and assure that they get some financial assistance at different life stages. If however you have a specific reason for which you want to take the term plan (protect your kin against a large home loan), you can opt for a single payout of the death benefit. This has to be mentioned when you buy the policy.
4. Tenure :
An online term plan is much loved because it is comparatively cheaper. So make sure you take the cost of the plan into consideration. Term plans do not give you anything in return if you outlive the policy period. So look to buy a plan that is comprehensive but economical at the same time.
5. Insurer’s track record :
This is an extremely important factor to take into consideration when choosing an online term plan. Do some research and find out what the insurer’s track record in claim settlements is. Opt for the insurance provider who has one of the best claim settlement ratios. If there is a problem at the time of the claim and your kin has to suffer because of that, the whole purpose of buying the online term plan will be defeated. And worst of all, you won’t be around to intervene or do anything about it!
Keep the points mentioned above in mind and choose a good term plan that’s best suited for you. There are some very good term plans from insurers like Kotak Life Insurance. Go through all the available options and buy the plan that you like the best.