How to Choose the Right Term Policy?

Choosing the Right Term Policy: What You Need to Know:

To finalise a term policy, you must first know how to pick the right one. Remember that buying life insurance is one of the most important decisions you make, as it has the power to safeguard the interests of your loved ones. Keeping these points in mind can help you make the right choice:

1. Comparing Premiums and Benefits
   When you decide to opt for term insurance, the first factor you must consider is your life stage. Your age and personal lifestyle lays the groundwork as they impact the tenure and coverage amount.
   Additionally, remember that every person has varying life responsibilities, so one policy may not suit everyone. You must carefully evaluate the needs of your dependents and the expenses required for their education, marriage, well-being, etc.
   
   Then, you need to weigh the premium of the term plan with its benefits to select the plan that best suits your needs.
2. Assessing Your Coverage Needs
   Another key aspect in choosing the right term policy is evaluating your income. A term policy offering flashy amounts might look good on paper but may not be practical, given your income. Your monthly financial duties and immediate financial liability must be evaluated to ensure that premiums on term policy do not become a burden. So, basically, you need to assess your coverage requirements based on your annualised income and your requirements.
   
   Did You Know? In India, more and more HNIs are leaning more towards hefty term insurance policies, with values soaring to ₹20 crore and beyond.1
3. Consider Existing Liabilities
   Repaying your existing loans is an additional expense you must consider before choosing a term policy. Make sure that your debts are paid off comfortably and that the term insurance amount takes care of your repayment liabilities in your absence.
   
   Why Choose Jio Insurance Broking?
   Jio Insurance Broking brings the best term life insurance policy that is tailored to meet your financial needs. Additionally, you can calculate the overall premiums and make the right choice easily.
4. Flexibility and Customisation
   Term insurance comes with riders that have additional coverage and various customisation options. These are considered game changes if you are looking for a personalised policy. For instance, a critical illness rider provides coverage for listed ailments. In case the insured faces any of the specified critical illnesses, the term policy promises a lump sum amount to settle medical bills.
   
   In addition to offering a lump sum amount, riders ensure that the amount is not deducted from the death benefit. Apart from critical illness, you can also explore add-ons like accidental death cover, disability cover and waiver of premium rider. Remember to choose a rider that works well, given your family situation.
5. Check the Claim Settlement Ratio
   What people often forget is that in addition to carefully choosing the term policy benefit amount, it is equally important to ensure that the claim is settled easily in the absence of the insured. The last thing you want is to let your family run from counter to counter, asking for what is rightfully theirs. This is where the claim settlement ratio comes into the picture. This reflects the percentage of claims settled by the insurer in the past.
   
   You can check the claim settlement ratio under the annual report presented by the Insurance Regulatory and Development Authority of India (IRDA).
   
   How Can Jio Insurance Broking Help?
   
   Choosing Jio Insurance Broking comes with the added assurance of finding insurance providers with an impressive claim settlement ratio. You can also compare different insurance companies’ CSR to make an informed decision.
6. Explore Tax Benefits Smartly
   . A lesser-known aspect of term policy is that it comes with several tax benefits that must be explored smartly. Here’s how you can avail tax benefits by choosing the right term policy: 2
   . Under Section 80(C): Enjoy tax benefits on term insurance up ₹1.5 lakhs against the premium that is paid.
   . Under Section 80(D): Critical illness coverage can promise tax deductions as it is a type of health insurance.
   . Under Section 10(D): Death benefit received under a term policy is exempted from tax liabilities.

Summing Up

Choosing a term policy with a reliable sum assured and carefully picked riders is important for your loved ones. Term insurance is possibly the biggest gift you can give to your family that will protect them even when you are not around. While term insurance promises death benefits, it is crucial to make the right choice when picking the policy. You do not necessarily need a huge amount, but rather a sum assured that works well for your family’s lifestyle and future needs.

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