Mistakes People Make While Buying Term Plan

Are you a newbie in the life insurance world? Do you wish to protect your family with a term plan? If so, first off, it would be important for you to know that a term plan is a life insurance cover that provides financial protection to the nominee or family of the policyholder in the event of their uncertain death. One of the most popular life insurance plans i.e term plans do not come with the option of investment. If you had been thinking of buying a term plan to gain insurance and investment benefits, you are mistaken.

Term insurance policy buyers make multiple mistakes during their plan purchase that ultimately lead to inconvenience at the time of claim. If you too want to make the right term plan choice, know that it would be a must to learn from the mistakes of others so that you do not end up in the same situation.

Common Mistakes People Make While Buying Term Plan

The list includes:

• Buying for a Short Period

Term insurance must cover your maximum age so that you can get the most out of it. While shorter-period term plans may come with small premiums, in case of renewal, it will result in increased premiums.

Must Read: Is A Term Insurance Policy Portable?

• Insufficient Sum Assured

People often do not consider their current financial status, including the lifestyle and child’s education needs while deciding the sum assured. Not selecting the right policy amount is one of the most common mistakes that ends up in massive inconvenience for the entire family. Make sure you choose the perfect sum assured amount while keeping all aspects in mind.

• Delay in Purchase

Many individuals wait for the right time to purchase term insurance. However, when the need arises at sudden, they are left with no option but to exhaust their savings or sell their assets. It is advised that you do not repeat the same mistake and buy term insurance as soon as possible in your life. With term insurance, the ideal purchase time is NOW!

• Going With the First Option

Term insurance must be purchased after assessing all the options. Make sure you do not rush into buying term insurance. Do not go with the first term plan option that you may get during your search. Always conduct proper research, compare all options and then choose the right one.

• Preferring Price Over Cover

You may find a plan that fits your budget perfectly, however, know that it may not fulfill your coverage needs, which, in turn, will cause you a massive loss. Make sure you do not prefer price over coverage. Always choose a term plan that gives desired coverage within your range. Moreover, remember it would also be a must to read the entire plan carefully.

• Providing Incorrect Information

Do not try to hide any information or provide incorrect information while buying a term plan to gain maximum benefits. In case you do so, it will end up in losing the coverage as per your future needs. Always provide correct information and do not mislead your insurer as well as yourself, even during policy renewal.

Having said that, go ahead and buy the term plan to give your loved ones the financial cover they need. But, make sure you do not end up committing the mistakes that others do.

Also Read: Should You Purchase Term Insurance In Your 50s?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.