Common Mistakes to Avoid When Purchasing Term Insurance Online

1. Buying a term insurance policy with insufficient cover

The biggest mistake Chandni was about to make was the coverage amount. For her, 10 lakhs seemed to be a big amount. But what she failed to calculate was the liabilities on her family, their growing needs, the rising cost of living and the ever-increasing inflation.

2. Thumb rule: It is generally suggested that the term insurance cover should be a minimum of 10 to 15 times your annual income.

Pro Tip: Your life insurer will also offer several riders for extra coverage. Make sure that you explore them and choose what suits your needs.

3. Taking a term insurance policy for a short-term

This was another grey area for Chandni. Buying a policy for 20 years would offer her coverage till she turns 46. “What about after that?” her brother asked her. Having to buy term insurance at that age would be far more expensive. Also, if you suffer from some ailments at that age, it may be difficult to find a good term insurance policy. Thus, a short-term policy may turn out to be rather useless. It is recommended that you choose a cover till the time you expect yourself to be working and earning, typically 60 years.

4. Hiding details from the insurer

Hiding any medical information from your insurer may seem to be a tempting way to lower your premium, but it can prove to be a costly mistake. You would not want to put your family’s future at risk just to save a few thousand today. From your lifestyle habits to your medical history, make sure to disclose everything truthfully.

Did you know that smokers may be charged 50% to 100% for the same life insurance coverage?

5. Not buying online term insurance

Buying online term insurance can be far more easy on the pocket. You save the cost of buying through an agent and can also get a discount when you buy term insurance online. When you choose the right portal, you get easy access to reliable and IRDAI-approved life insurers. Did you know that when you buy term insurance from Jio Insurance Broking, you can get a discount of up to 20%?

6. Waiting for too long

While Chandni had to learn a few things, from the very beginning she was clear that she would invest in a term plan early in life. And this is a very smart decision. Thinking that you don't need life insurance or you are still too young and healthy are some incorrect notions. Rather, as soon as you start earning, you should invest in a term insurance policy.

Pro Tip: Buying a term insurance policy in your 20s will be much cheaper than in your 30s or 40s. If, later in life, you wish to enhance your coverage, you can buy another term plan. There are no restrictions on how many term insurance plans you can have in your name.

7. Not comparing your options

Another mistake Chandni’s told her about was buying the first policy that caught her eye. Opting for the policy with the least price was also not always the best idea. He suggested that she check a few details about the insurer and then make a well-informed choice. These include:

Let’s Conclude

Chandni’s experience is a reminder that even straightforward financial decisions like buying a term insurance policy deserve careful consideration. With a little patience and the right guidance, you can secure a term insurance plan that truly protects your loved ones.

Jio Insurance Broking allows you to shortlist and narrow down your term insurance choice in a simple and easy way. All you need to do is enter the required details, including your age, gender, lifestyle habits, annual income, etc., and in an instant, you are shown the best possible term insurance policies.

FAQs