How to Purchase Term Plan Online?
As the primary breadwinner of the family, you are consistently working hard to ensure you can cover the needs of your family. However, as the chief earning member of the family, you also must secure the future of your family in your absence. For this purpose, financial experts advise you to make diversified investments. You should invest in market-linked instruments that offer high returns as well as invest in protective solutions such as term insurance plans.
Term plans are the simplest and one of the most cost-effective life insurance policies. These plans are ideal for everyone who want to financially safeguard the future of their loved ones. You can easily buy an online term plan without physically visiting the branch of the insurance company. When you buy an online term insurance plan, you can also pay your premiums online in the frequency and mode of your preference.
Here is everything you should know about online term plans and how to purchase one online:
What is a term insurance policy, and how does it work?
A term insurance plan is a pure protection policy that offers life cover for a specific tenure in return for premiums you pay for the policy. In case of your unfortunate death during the tenure of the term plan, the insurance company will pay an assured death benefit to your nominee.
The death benefit received from the term plan will enable your family and dependents to manage their expenses and maintain their standard of living in your absence. The sum will provide them with financial security and act as an income replacement when you are gone. Your family can use the money to also fulfil their financial goals such as higher education for your kids, paying home loan EMIs, etc.
Term insurance plans do not offer any savings component or cash-value benefit. However, since these plans are not affected by the market movements, term insurance benefits are guaranteed# irrespective of how the market is performing. This makes term life insurance plans less risky and one of the most reliable insurance plan to secure the future of your loved ones. Moreover, online term plans with riders1 help you enhance your insurance coverage. By opting for additional riders such as Accidental Death, Total Disability Rider, etc., you can improve your online term plan.
For example, assume Ram buys an online term plan for 20 years at the age of 22 with a sum assured of Rs. 40 lakhs. Ram pays regular premiums (as determined under the policy), but unfortunately, he dies due to an accident at the age of 35 (before the tenure expiry). In this case, the insurance company will pay the defined sum assured to Ram’s nominee, as specified in the term insurance contract. This will help Ram’s family manage their expenses and maintain their standard of living in your absence.
How to purchase a term plan online?
Given the increasing penetration of digital technology and the internet, it is easy and convenient to buy an online term insurance plan. Here is a standard guide that can help you purchase an online term plan:
- Assess your financial needs: The first step when you buy an online term plan is to determine your coverage needs. The sum assured you choose must be sufficient to meet your family’s needs and obligations in your absence. Experts recommend having a term plan with a sum assured that is 15-20 times your annual income. However, this can change depending on your current income, the number of dependents, financial goals, the standard of living, existing financial liabilities such as loans, etc. Also, take into account the rate of inflation in the long run when estimating your coverage sum.
- Select your insurance provider: Once you know your coverage needs, you should conduct research online to find a reliable insurance company. When selecting your online term plan company, be sure to check the following parameters:
Check the claim settlement ratio (CSR) of the company as it is an indicator of the reliability of the insurance company. The IRDAI (Insurance and Regulatory Development Authority of India) announces the CSR of insurers each year.
Assess the solvency ratio of the insurer as that will determine the financial stability of the company. A high solvency ratio is a good sign.
Check online reviews and market reputation of the company to evaluate the trustworthiness.
Customer service and claim settlement process to be sure that your family will not struggle at the time of claim settlement.
3. Choose your plan: Once you have selected the insurance company, you should then assess the different online term plans available. You can select one of the many Tata AIA term plans. Each of our plans offers unique benefits with a common purpose to provide comprehensive life coverage. You can buy the plans online on our website and also pay premiums as per your desired frequency and mode. You can opt for an online term plan with riders1 that help to enhance your insurance coverage. The plans are highly affordable and offer discounted premiums for high sum assured
4. Make the payment: Once you have selected your term insurance policy, you can apply for the plan online by filling in your basic details and providing the required documents. These include valid ID proof, PAN card, address proof, income proof and medical documents. After this, you will need to pay premiums as per your sum assured at a frequency and mode of your choice. Once you make the payment, your term plan will be active. Be sure to read the policy documents carefully.
Death is traumatic both emotionally and financially for the family. However, with the right investment options like an online term plan with riders1, you can be at peace of mind that your loved one will not suffer financially when you are not around.