New To Financial Planning Factors to Consider while Choosing a Term Insurance Plan

Charlotte Miller

Updated on:

The world around is full of uncertainty and chaos. So, it is a top priority for everyone to financially and emotionally protect their families. There are several options available, including ulip, term insurance, endowment plans etc. Term insurance is one of the most simple life insurance plans available as it provides a secured future without putting the burden on one’s pocket. There are several kinds of policies available, but it is essential to find the best term insurance plan for your loved ones. 

Here is a list of all factors one must consider before purchasing the best term insurance policy

  1. Goal

Term insurance plans can be considered a top priority since they offer financial security to your family and loved ones. Nominees get a high assured sum at a low premium. In addition, some policies tend to return the premiums paid to the policyholder.

  1. Policy Period

It is always advisable to take a longer horizon for the best term insurance plans. This helps to provide a higher coverage at a minimum premium. Hence it is always good to start early and go for long term plans.

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  1. Liabilities

Every person has their own set of liabilities like EMI, car loan, house loan etc. One should always consider these liabilities before proceeding with the purchase of the best term insurance plan. The policy should be able to cover them without putting a financial burden on the family.

  1. Premium

It is already stated that the best term insurance plan provides a higher sum with pocket-friendly premiums. Certain factors influence the premium like age, gender, occupation, assets, liabilities, other policies etc. So, when a person starts the policy at a younger age, they have a wide range of choices with considerably lower premiums.


Insurance companies provide the policyholders with several Riders, which can be added to the policy. These Riders help to increase the weightage of the policy. Examples are critical illness Rider, disability cover etc. But one must be careful and select the riders that are necessary as they increase the premium.

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  1. Buy Term Plan Online

Most of the companies have an online presence now. Therefore, they are providing the policyholder’s good discounts while making an online purchase. Moreover, one gets a chance to compare several policies available and choose the right one. Furthermore, calculators are available, which assist in the selection of the right cover. Finally, one can purchase the best term life insurance plan comfortably sitting at home.

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  1. Policy Cover

While choosing the best term insurance plan coverage or sum assured is the vital factor. The amount should be able to adequately cover the regular expenses of the family and some significant responsibilities. So, deciding on the cover can be overwhelming sometimes. But certain factors help to make the process simpler. They are:

  • Age

When a person is just starting their career and life, they do not have significant responsibilities mostly. Hence, they can begin a plan comfortably. Moreover, the premium will also be less for an early start.

  • Gender

Men and women are equal. But according to insurance guidelines, women live longer than men. Hence the premium will be less for women than a man of the same age.

  • Occupation

Some peoples have risks in their profession. Hence occupation should also be taken into consideration while deciding on the cover. Two persons of the same age and different occupations will not have the same premium.

  1. Term Insurance Calculator

It is easy, time-efficient and simple to use a calculator. A calculator comes in handy when a person is struggling to decide on the cover. One has to input the details such as age, income, assets, liabilities etc. At the end of the calculation, one can get an approximate idea of the coverage they need. The calculator also shows several policies from which you can choose the right one that fits.

You should also know what is term life insurance claim settlement ratio? This is one of the vital factors one must check before proceeding with the purchase. This ratio indicates the number of claims settled or accepted to the total number of claims put up. In addition, the ratio shows the number of rejections by the Insurance Company.  

Purchasing the best term insurance ensures the financial safety of your family. Moreover, it is easy to buy term plan online. It allows comparing the policies and flexibility in the payment. These plans also offer tax exemptions according to Income Tax Act. 

You can find the tax calculator to get an approximate idea. One must provide all correct information and should not hide anything as this may lead to a claim rejection. One must always check the policy documents thoroughly as it has the critical information regarding the policy before they buy term plan online!