Term plans are an affordable yet highly effective way to secure your family’s financial well being from life’s uncertainties. Opting for one is indeed a wise decision, but sometimes, people get caught up with a plan that might not suit their needs.
In such cases, policyholders could incur financial losses and inconveniences that may cause them to lose faith in term plans.
All this could be the result of one or two simple mistakes during the process of applying for the insurance policy. This article will discuss some of the most common mistakes policyholders make whilst taking out a life insurance plan and hopefully help you make an informed decision
1. Putting-Off the Decision to Buy a Plan:
In other words, procrastinating when it comes to buying a term policy. Many of us have an attitude of, “we’ll see about it tomorrow”. The thing is, nobody knows what tomorrow holds and that’s exactly why you need a plan today!
The earlier you take out a plan the better, because when you are young and healthy, you will get the best quotes on a term plan. But put it off too long, there’s a chance you’ll have to a lot more in order to avail the same benefits.
So, if you’ve just started earning, consider it the best time to invest in a term insurance plan. Once you do so, you won’t need to worry about what surprises life has in store for you tomorrow!
2. Not Looking beyond One Insurance Provider:
This is another common mistake. Sometimes policyholders, in hurry to get a plan, opt for the first plan placed before him or her, from the first and only insurance provider they’ve visited.
Most potential customers fix on an insurance provider they’ve heard good things about, some go in for an insurance provider their parents and grandparents chose and some just fix on the first insurance company they visit.
Either way, this is not the ideal way to go about buying a term policy. One should compare at least 5 insurance providers compare the premiums, the coverage, the riders, the tenure, etc. before fixing on a term plan and provider.
To do this, a potential insured is not even required to physically visit the branches of these companies; he or she can simply visit one of the many aggregator sites online to get a better picture. This brings us to the third point.
3. Never Rule out Online Term Policies:
Online term policies will offer you numerous benefits and one should never rule out buying an insurance plan online. For starters, it’s super convenient! You can compare plans, buy one and pay premiums, all over the internet from the comfort of your home.
Also, most term plans online come at 30 to 40 percent discounts as compared to their offline counterparts. So don’t make that mistake of ruling out online term plan options.
6 Mistakes You Should Avoid While Taking A Term Policy
4. Don’t Go For Plans Just Because Of Lower Premium:
This is another very common mistake. Most people go in for the plan with the lowest premium. However this could lead you to make another mistake of taking a plan with insufficient cover.
Therefore, by making the mistake of going in for a lower premium you can also fall for a plan with a cover that will not suffice your needs. So, if you do find a plan with a lower premium, make sure you’re not losing out any features or coverage elements.
5. The Mistake of Not Studying the Plan:
So you’ve finally think you’ve arrived at the plan that best suits your needs. It has a decent premium and has coverage suitable to you family’s lifestyle. Now, it’s time to study every detail of the plan with ultimate scrutiny.
See the inclusion and exclusions of your plan, read the terms and conditions and understand the entire scope of your plan before your finally fix on the plan.
6. Don’t Make the Mistake of Forgetting Riders:
Riders are very important, don’t make the mistake of turning a blind eye towards them. Riders like return of premium, critical illness and total disability can prove to be very useful when combined with your basic plan.
When taking out a term policy make sure you consider the riders available to you and accordingly choose the ones you need.
These were some of the common mistakes people make while taking a term policy. We hope this article has been helpful and will aid you in making an informed decision.
All the best!