Hello guys, In today’s article, we are going to talk about some important term-insurance related facts that are very important for you to know.
Today, firstly, we will understand what is the basic reason for term insurance. And if you make an error in understanding the basics, there is a dark truth behind this term insurance. and we need to understand the real truth and understand the matter in deep. So, we are going to discuss that. After that, we will discuss some plans which are highly recommended by people, but we have to stay away from such plans. I am clearly going to mention names and the company’s name and I am going to put up my opinion about which plans to stay away from.
It is going to be very important and I recommend you to share it with friends. As you share, other people are also going to gain some literacy in this matter. And we will understand a few important points. So let’s get started.
We all know, term insurance is the cheapest insurance in the world. Term Insurance actually benefits you when after your passing away, your family needs support. Your family requires money for support. The premium of a term insurance plan is any-which-way quite less. But, just to save some amount out of the premium, we get stuck with some companies in which a lot of criteria are missing. So, first of all, let’s talk about the criteria that we should consider before buying term insurance.
4 Different Criterias for buying the Term Insurance
1) What is Claim Settlement Ratio??
The most important criteria is how good is their claim settlement ratio. Meaning, if a company is getting 100 claims to settle, meaning, 100 such people who bought the term insurance from the company, After the person’s death, when it was the company’s turn to pay back the family, So how many of those 100 people got their claims settled by the company. That is the Claim Settlement Ratio. which is important to consider. Because term insurance is only beneficial, when in your absence, your family gets the support they need. In a lure to get a less costly term insurance, many times our families end up suffering because we made this big financial blunder.
2) What is the Claim Settlement Amount ratio?
Suppose, some company’s claim settlement ratio is 99%, It is also important to check how much amount of the claim did they settle. Many times, claims of small amounts do get passed by the companies, But big claims get rejected. So their claim settlement ratio is good but the claim settlement amount ratio is poor. So we need to check if the company is getting a claim of Rs 10 Crore, Out of those 10 Crores, how much claim has been passed by the company? So, it is important to consider the claim settlement amount ratio too. Many times we miss the second most important point here.
3) What is the Rejection Ratio?
It means If a company gets a claim and for whatsoever reasons, the company denies the claim. If a term insurance plan has a rejection ratio of more than 1%, more than 1%, we are going to reject that plan outrightly. Also, we would know about some companies whose rejection ratio is up to 3.5%, but their premium is less and because of that, we end up buying their plans.
4) What is Rider insurance??
Please pay attention, all the accidental rider and critical illness riders should be with the term insurance. Because term insurance premium is always fixed. And usually, we buy term insurance at a young age and the premium amount is also less. Since term insurance premium is fixed, we should put the riders with the term insurance. Rather choosing this rider with the health insurance. It is important to buy health insurance. But on the rider part, be it accidental or critical illness, we should choose it with term insurance. Because term insurance premium is fixed But health insurance premium keeps on increasing with your age.
Now I hope you will keep these four points in mind before buying a term insurance And do not fall for the trap of a cheap term insurance plan.
That’s sit for today’s article. Thanks who read till here and will meet you guys again in the next article.