Term insurance is a necessity for all to provide financial protection to the family members in case of any eventuality. Just as it is important to choose the right plan, it is crucial to choose the right lender. Read on for valuable tips to choose the best term insurance company.
If you are looking to buy a term insurance policy, you may probably look for an insurance company that offers the policy at the lowest premium. While the policy price is essential, it is not the only factor you must look for while choosing the best insurer. To ensure that you get complete protection for your loved ones, you must consider the following factors before making the purchase decision.
Claim settlement ratio
The claim settlement ratio indicates the number of claims approved by the insurance company against the number of claims rejected in a year. You must look for a company that has a higher pay-out ratio so that your dependents can easily claim the benefit in your absence and live a financially secured life. The primary purpose of a term life insurance cover is to keep the family members financially protected and help them live a comfortable life without compromising on the current lifestyle.
Another important factor to check apart from the claim settlement ratio is the total number of claims completed by the insurance company. Always look for an insurer that has settled a high number of claims.
The solvency ratio is an indicator of the insurance companies’ capability to settle the claim when the need arises. In other words, it tells you about the financial status of the company. The Insurance Regulatory and Development Authority of India (IRDAI) requires all the insurers to have a minimum solvency ratio of 1.5.
In the event of any natural calamity, it is natural that the insurance company will receive a large number of claim requests within a short duration. At such times, the solvency ratio of the insurance company plays an important role. The financial security of your loved ones will greatly depend on the financial stability of the insurance company. Hence, you must consider the solvency ratio of the company while looking for the best term insurance plans.
Cover for critical illness
The term insurance provides financial security to the family in the event of your sudden demise. However, death is not the only time when your family may face financial hardship, they may have a hard time in case you suffer from any critical illness like cancer, or you need to undergo major surgery. The treatment cost for such condition can quickly escalate and deplete your savings. Hence, you must look for an insurance company that includes critical illness cover along with life protection. The illness cover not only pays for the treatment but also covers the cost for diagnosis, medical tests and helps you keep your savings safe.
The riders are the additional protection that you can buy over and above the cover included in the original policy. All the term insurance plans provide basic life cover, but it does not guarantee comprehensive coverage. Although buying additional riders may increase your premium amount, but it would be worth the price considering it would protect your family. So, while looking for a term insurance plan, make sure that you compare the insurers based on the various riders they are offering. Some of the best riders you must consider are income benefit, accident cover, premium wavier, etc.
The key to getting the best coverage and protecting your family in your absence is choosing the right insurance company. So, do your research well and choose an insurer that caters to your needs.