Buying a Term Plan? Use This Quick Step-by-Step Guide

Sep 21, 2018 | 2 months ago | Read Time: 3 minutes | By iKnowledge Team

A term plan offers financial protection to your loved ones, after you in the form of a sum assured. This means, you pay monthly premiums for your life cover, and gives your loved ones’ financial stability in uncertain times. Buying a term insurance plan has become more of a necessity today.  So, if you are planning to buy a term plan and are surrounded by numerous questions, use this checklist and make a wise decision.

Step 1: Know your Coverage Requirement

This the first step while buying a term plan. While calculating your coverage requirement, follow the rule of taking a cover of about 7-10 times your annual income. Another option is to use informative calculators available online. An insurance advisor will also be of great help. In order to understand this better, you can also make use of a Human Life Value calculator which helps you identify your life insurance needs on the basis of investments, liabilities, income, and expenses.

Step 2: Choose the Right Type

There are various types of term plans available in the market. A level term plan is one of the most  preferred types as it is not only affordable but is also easily available online. Moreover, there is a lot of customisation in terms of the sum assured offered to the nominee. Choose a plan as per your requirements, for instance, if you want to protect your mortgage then opt for a mortgage protection plan and if both the partners are co-applicants of a loan then a joint life plan works well.

And, if you want to protect your family, in your absence you can choose a plan like iTerm Plus, from Aegon Life. This plan will secure your family’s future, even in your absence.

Step 3: Choose Additional Benefits

You can increase your plan’s protection by selecting riders/add-on features to enhance your term plan. For Aegon Life’s iTerm insurance plan, you can add additional covers against accidents, disability, and critical illness for a nominal extra charge.

Step 4: Search for the Best Quote

Shop for quotes online and offline as it will help you compare various policies, benefits, claim settlement ratio, etc. Claim ratio is an important factor, you can find this found from the annual report of the IRDAI available on their website.

Step 5: Complete the Proposal Form

After you have shortlisted a plan, fill in your proposal form with accurate details, yourself. A proposal form is one of the most significant documents that mandates a life insurance contract between the insurance provider as well as the insurer. Read through the questions and disclose details of any life-threating habits such as drinking, smoking, etc. to avoid future problems during claim settlement. Check your premium paying term, then mention your nominee details, salary slips, Income Tax Return receipts for the last three years and other documents.

Step 6: Undergo Medical Tests

Depending on the sum assured and age, you will have to undergo medical tests. The scheduled date, time and other details will be confirmed by the insurance company.  If you’ve opted for a plan with Aegon Life, they offer free medical check-ups.

Step 7: Receive a Response from the Insurance Company

The term insurance policy is usually issued in a span of 7-15 days after submitting the documents and medical examination reports. If your medical tests are unclear you may have to go for a second medical test.

Step 8: Check Your Details

After receiving the document, check if the mentioned details are accurate. If you find any error, immediately call up the advisor and get it rectified at the earliest. Now all policies offer a free look period, if you find that a wrong policy is issued to you and the problem is not rectified, you can go ahead and return the policy to the company within 15 days of receipt of the policy. You will receive your premium amount and a nominal number of medical tests and stamp duty will be deducted.

Step 9: Store Your Policy in A Safe Place

Always inform your loved ones about the policy and where you have stored the documents. In case of unfortunate incidents, they will be aware of it.

So, if you are planning to buy a term plan, use this effective to-do list and secure your loved ones for life. Go ahead, and get insured today.


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