While doing financial planning, we often focus on investment and savings, but one of the most important things that is often missed is term life insurance. This is a policy that provides financial security to your family even in your absence. Therefore, in today’s time, it is very important to get a good term plan along with health insurance. But, some mistakes should be avoided while buying it so that your family does not have any problem in getting a claim in difficult times.
What is term insurance
First of all, it is important to understand what term insurance is. As the name suggests, it is a life insurance cover for a fixed period. Its biggest advantage is that if the policyholder unfortunately dies, his family gets a large insurance amount, which becomes a strong financial support for their future. It is a pure protection plan, which does not have any investment component, so its premium is also low.
Avoid these 5 big mistakes while taking term insurance
If you are going to buy a term plan, it is very important to avoid some mistakes so that your family does not face any problem in getting a claim in the future.
1. Giving wrong information
Before buying a term plan, you have to give correct information about your health, habits, and old diseases. If you hide any disease, the company can reject it at the time of claim.
2. Avoiding medical tests
Many times, people avoid getting tests done. Companies also give the policy based on a medical certificate, but at the time of claim, they can say that the policyholder was already ill. Therefore, definitely get the test done.
3. Do not look for a cheap term plan
Do not buy a term plan only by looking at the cheap premium. Choose an insurance company whose claim settlement ratio is good and that does not hesitate to settle the claim. If a plan is 1 or 2 thousand rupees cheaper, but does not help your family in time of need, then what is the use of it?
4. Choose the right period
You should buy a term plan at the age of 60 to 65 years. There is no point in buying a plan for just 15-20 years, because the real need arises only after the age of 60. Buying a plan after 50 years can be very expensive, so buy a plan between the ages of 25 and 30 years.
5. Do not forget to renew every year
Once you buy a plan, it is necessary to renew it every year. If you do not do this, your policy will lapse and you will have to start afresh. You can avoid this mistake by linking the renewal to the auto-pay system.