People seldom want their families to withstand the worst of their premature death. However, god will not give us a long life just by praying to him. The responsibility of making the family secure financially rests with us. This is the case if you are the sole breadwinner of the family. In such a situation, it is important to insure yourself from the unavoidable act of death. Of course, none of us plans for death, however it should not be forgotten that it is a sad reality of us human beings. Therefore, there has to be a backup plan to take care of our dependents, in case of our death.

How to choose the right term insurance plan

This article will tell you about the right way to choose the right term insurance plan. When buying insurance plans, people compare insurance policy plan online and then take a decision, which plan to buy. The following tips will go a long way in ensuring that your term plan is need based and not dependent on what your peers have bought.

  • Make sure your insurance purchase is need based and not peer based

You must select a term plan based on your individual needs and not those of your peers. This requires you to do a self-analysis of your needs. When you take into account your needs to buy a term plan, you should also take into account what your family will need, in the event of your death.

  • Buy more policies online than offline

When you choose a term insurance plan to purchase, doing so online would be a better bet. This is because in the online method, you will be able to compare the price and other features of the policy. In addition, in the online method, there are no intermediaries involved.  Therefore, they turn out to be cheaper than their offline version.

  • Be specific about the time you would require the cover for

The tenure of a term insurance plan is as crucial as the sum assured. A term insurance policy should ideally cover a person until the time he wants to work. Until a few years ago, this age was 60 years. However, today it can be considered 75 years.

  • Take inflation into account

When someone chooses a sum assured for a term plan, he should configure inflation into his calculations. For example, a cover of say Rs 60 lakh may not be enough ten years down the line as the price of products and consequently the value of the rupee would drop. If an inflation of 5% is assumed, the amount of Rs 60 lakh will only be equal to Rs 38 lakh after ten years.  To counter this, some insurers offer plans whose sum assured increases by 5-10% every year. This will take care of inflation.

  • Take into account the claim settlement ratio of insurance companies

While you chose a term plan, take care to choose a company whose claim settlement ratio is approximately 99%.  In addition, the insurer should disclose all details like his health condition, income and lifestyle, etc while filling up the application form.  This would avoid the possibility of a claim rejection.


Thus, now the ways to choose the right term plan are known.  These tips can be used when choosing the right term plan to buy insurance online.