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It is not a hidden fact that term life insurance policies are one of the best insurance policies out there. But choosing one from all the options can be stressful. A term plan like HDFC Life Term Policy is something you should check out. Let’s find out what you need to look for while buying a term insurance policy.
Buying a term insurance plan is easy. But choosing the one that takes all the boxes for you can be daunting. It is essential that you do as much research as you can before you finalize a policy provider and a plan.
Here are a few things that you need to look for while buying a term insurance policy.
- Free-look period
In case you opt for a policy that seemed alright in the beginning but is not working out for you, then you can take advantage of the free-look period. Almost every insurance company offers a free-look period.
A free-look period is a period given to the policyholder where he/she can assess and understand the policy’s terms and conditions. If a policyholder isn’t happy with how the new policy works, then he/she can terminate the policy and get a refund.
- Insurance cover
When buying an insurance policy, you must make sure the cover is at least 8 to 10 times your annual salary. It should easily be able to replace your income, as well as it should be able to settle all your loans.
Any outstanding debts should also be covered. For example- 1 crore rupees seems like a lot right now, but due to inflation, it won’t mean as much as it means now. A few insurance companies have designed plans where they increase the cover by 5-10% every few years. The best part is that there is no cap on the maximum increase.
- Choose the right tenure
Choosing the right tenure is as important as choosing the right cover. Do not choose a tenure that is either too short or too long.
The hack to figure out the right tenure is to opt for the years left for you to turn 60-65. Getting the cover when you are in your early 60s will help you live and sustain a financially independent and stable retirement, in case that is your goal. If you opt for a tenure that ends when you turn 50, then it will lead to you losing the money fast.
- Do not shy away from the medical test
Most insurance companies put their applicants through extensive medical tests before they issue them the term insurance policy. Whereas some companies just ask the applicant to give a declaration of good health.
It may seem convenient, but it can be more expensive. The premiums that you pay when you are in good health are lower. That is why do not run away from these medical tests. It can save you money. If not money, then it can possibly save your life.
