Term Insurance Common Mistakes- If you also want your family to get the full benefit of term insurance, then keep some things in mind before taking this insurance. It is not very difficult to avoid the common mistakes that people usually make.
Most of the people are usually careless while taking any insurance policy. They buy the insurance policy only after getting basic information. Later, when companies create hurdles under the guise of terms and conditions while taking claims, then they realize that they should have been more cautious while taking the policy.
Considering the uncertainty of life, term insurance has now become mandatory for every person. If you are also going to take term insurance, then you must know what things you should know in advance to take full advantage of the policy.
The financial future of the family can be secured through term insurance at a very low premium. Term insurance is helpful in meeting the financial needs and financial goals of a person’s family when he is no longer in the world.
Therefore, while taking this insurance, carefully examine the claims and promises of the companies and take the decision only after analyzing your financial needs. Today we will tell you about those five mistakes which usually those taking term insurance unknowingly make.
Choosing the wrong amount:
There is a generally accepted rule as to how much term insurance should be taken. The rule is that you should take term insurance cover 20 times more than your current annual income.
Usually people make mistakes in deciding how much term insurance they should take. They take term insurance cover without taking into account family expenses, long term financial goals, loans and other financial commitments. This mistake should be avoided.
Mistake in choosing payment option:
Claim pay-out plan is the means by which the insurance company will give money to your family. Term insurance offers lump sum pay-out, monthly income pay-out options and lump sum and monthly income pay-out options. Most people are careless in choosing the pay-out plan. Apart from this, his family faces difficulty in managing the amount received in the claim.
Ignoring Riders
While buying term insurance, many people ignore add-ons called riders. Don’t take it. Riders pay additional amounts to the insured in the form of a claim upon the occurrence of certain specified events. Add ons like Accidental Disability Rider, Critical Illness Rider and Accidental Death Benefit Rider are provided by insurance companies. Among these, you must choose the rider as per your need.
Choosing the wrong company:
Most of the people usually choose the insurance company based on its claim settlement ratio. This method of choosing an insurance company is not correct. It is not necessary that a company which has good claim settlement ratio also has good service. Many companies improve their claim settlement ratio by settling small claims but their record in big settlements is poor.
Not taking the proposal form seriously:
Most people do not take the term insurance proposal form seriously. They do not read it properly and sometimes fill in wrong information unknowingly and sometimes deliberately. If you have filled wrong information in the proposal form or have deliberately hidden any information, then the company may refuse to give further claim to your family.
