# 4 Factors that Prove to be Decisive in a Term Plan

Providing your family with protection and financial security is something that is always on your mind. And if you are the only earner in the family, this responsibility multiplies exponentially. After all, who would want their loved ones to suffer from financial strains in case of their absence?

In such a scenario, life insurance becomes imperative. Although no one can anticipate life’s eventualities, you can at least provide your family with a financial safety net called term insurance.

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A term insurance plan can help you in strengthening your back-up plan. It is an insurance policy; wherein, your family is provided with a hefty sum in the event of your unfortunate demise.

Now, while purchasing a term plan is crucial, it should be bought only after proper evaluation. Here are some factors that can help you in making the right decision:

### Coverage

The cover amount is the most critical part of any policy. It is the amount that is paid by the insurer in case of unfortunate demise of the policyholder. Therefore, the cover amount must be chosen very carefully. For this, you must evaluate your current and future financial obligations thoroughly.

You can also use a term insurance premium calculator to estimate the right coverage amount for your family. Leading insurers like Future Generali, also provide the facility of online term insurance premium calculator for their customers. By using such calculators, you can arrive at the right coverage.

### Tenure

The term or tenure or a term policy is as crucial as the coverage amount. Basically, an ideal term plan should cover you till the age of 80 years. This will ensure that your family is covered for a longer duration.

In case of your untimely demise, the sum assured can be used by your family to continue with their current lifestyle. Moreover, this amount can prove to be your lasting legacy. On the other hand, if you choose a policy that covers you only for a small period (15-20 years), it will not serve any purpose if you outlive the policy term.

### Optional Riders Benefits

An ideal term insurance plan is the one that provides you with a 360-degree cover. One of the most significant ways to achieve this is by opting for additional riders. A rider is an add-on that most of the insurers provide to the policyholders. It offers benefits above the policy, providing an extra layer of cover for your family’s security.

For instance, insurers provide an accidental benefit rider in which additional sum is provided to the nominee in case of accidental death. Likewise, there are many other riders like critical illness cover, disability cover, and waiver of premium. But remember, before opting for these riders, evaluate your needs and check if the rider will provide you value for money or not.

### Claim Settlement Ratio (CSR)

While selecting a term plan, it is crucial to consider the claim settlement ratio of the insurance company. CSR defines the number of policy claims that are settled by the insurer.

You must always go for a company that has a higher claim settlement ratio while purchasing a policy. Why? Because if the claim gets rejected, it defeats the whole purpose of buying term insurance for securing the financial future of your loved ones.

### ‘Summing Up’

While we cannot predict the future, we can at least have a financial plan in the form of term insurance to tackle the uncertainties of the future. However, it is imperative that you analyse your needs first and then purchase the policy. Being a responsible policyseeker, you must understand that buying a term plan is not just about the payment of premiums. You will have to properly analyse your current health condition, number of dependents and your financial stature to choose the ideal term plan.

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