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Purchasing a term insurance plan is one of the most crucial financial decisions to secure your family's future. However, many individuals make common mistakes that could lead to financial setbacks or inadequate coverage. Avoiding these mistakes will ensure you get the best benefits from your term insurance policy.
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Let's take a look at the most common mistakes people make while purchasing term insurance plan and understand how to avoid them:
A primary purpose of term life insurance is to provide financial stability to your family in your absence. If the sum assured is inadequate, your family may struggle to maintain their standard of living. Your coverage should be at least 10-15 times your annual income to ensure long-term financial security.
Note: Calculate the term plan premium on the term insurance premium calculator online tool by Policybazaar before buying.
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Delaying the purchase of a term plan leads to higher premiums. The best time to buy is when you are young and healthy, as you get lower premiums and greater coverage for the long term. Waiting until later increases the cost and may limit your eligibility due to health conditions.
Opting for a short-term policy to save money can backfire. If your coverage expires when you still have financial responsibilities, you may have to buy a new policy at a much higher premium. Opting for the longest term available is wise to ensure continued protection.
Failing to disclose medical history, lifestyle habits (such as smoking or drinking), or existing health conditions can result in claim rejection. Always provide accurate information while purchasing a policy to avoid complications in the future.
While riders enhance coverage, adding too many can make the policy expensive. Evaluate whether you need additional benefits like critical illness or accidental death riders before including them in your policy.
Many people prefer traditional offline methods but often miss out on cost-effective options available online. Buying term insurance through an IRDAI-approved web aggregator can help compare multiple policies, ensuring better coverage at lower premiums.
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Many policyholders buy insurance from familiar companies without comparing other options. Exploring different insurers can help you find better coverage at competitive rates. Always compare plans, features, and claim settlement ratios before deciding.
Note: Check out the best term insurance plan in India and choose one that suits your requirements.
Some insurers attract customers with low premiums but include hidden exclusions. Instead of focusing solely on affordability, ensure the policy offers comprehensive coverage with minimal exclusions and a high claim settlement ratio.
Switching policies without a proper plan can leave you temporarily uninsured. Always secure a new policy before discontinuing an old one to avoid any gaps in coverage.
Many policyholders overlook the fine print, leading to misunderstandings later. Carefully review the inclusions, exclusions, premium structure, and claim process before finalizing a policy.
Note: Know what is term insurance first and then buy a term plan for your loved ones.
Avoiding these common mistakes can help you choose the best term insurance policy tailored to your needs. By opting for adequate coverage, comparing plans, providing accurate details, and reading policy documents thoroughly, you can make a well-informed decision that benefits your family in the long run.
˜Top 5 plans based on annualized premium for bookings made on https://www.policybazaar.com in the first 6 months of FY 24-25.
Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
+Rs. 487/month (Rs.16/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited
We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881
For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale
Policybazaar Insurance Brokers Private Limited | CIN: U74999HR2014PTC053454 | Registered Office - Plot No.119, Sector - 44, Gurgaon, Haryana – 122001 | Registration No. 742, Valid till 09/06/2027, License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the insurers.
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+Rs. 820/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
+Rs. 1,443/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
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