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How To Compare and Choose the Right Term Insurance Plan?

Sep 14, 2023


A term plan is a financial tool that provides a lump sum payment to the beneficiaries in the event of the policyholder’s untimely death only if the term life insurance policy is active. And when it comes to choosing and comparing term insurance plans, it is essential that the plan protect your loved ones fully from any future uncertainties. However, with so many insurance providers offering a range of term plan insurance, choosing the right one can take time and effort.

In this article, we will review some factors to consider you need to compare term insurance and select the best term insurance plan.

Factors to Compare and Choose the Right Term Insurance Plan

After assessing your needs and budget, you should do in-depth research and evaluate some factors to get the best policy for yourself and your family.

  1. Coverage Amount: According to the rule of thumb, when choosing a term insurance plan, you should choose a coverage amount that is at least 10-20 times your annual income. The amount of coverage determines various financial commitments like unpaid bills, mortgage payments, and other loans or outgoings. Thus, it is essential to choose the right level of coverage by accessing your financial requirements.
  2. Riders: Riders are additional benefits you can add to your policy for a little extra cost. These benefits may include critical illness insurance, premium waivers, accidental death and disability benefits, and more. First, assess your needs and requirements, and include the riders that you need.
  3. Policy Term: The policy term is the period for which the policy will offer coverage; hence, when buying a term insurance plan, choose a term by considering your age, the age of your dependents, and your financial obligations.
  4. Premiums: The premium is the insurance cost, which you pay to the insurance company as per a chosen mode and frequency. The premium amount depends on various criteria, such as age, health, lifestyle, and coverage quantity. Thus, understand the premium structure, including the payment frequency (monthly, quarterly, or annually) and any discounts or rebates offered while comparing term insurance policies.
  5. Claim Settlement Ratio: The ratio of claims settled by the insurance company as compared to all claims received by the insurance company is known as the claim settlement ratio. A higher claim settlement ratio suggests a greater likelihood that the insurance company will promptly and fairly resolve claims.

Choose term insurance companies with a high claim settlement ratio while evaluating different policies. For instance, the Tata AIA term plan is beneficial to choose as they come with a claim settlement ratio of 98.53%* for FY 2021 – 22.

  1. Credibility of the Insurer: When choosing a term insurance plan, it is crucial to consider the insurance company's reputation and reliability. You should pick a company with a proven track record of high-quality service, swift claim resolution, and reasonable prices.
  2. Customer Service: Lastly, consider the quality of the customer service that the insurance company provides. Choose service providers with attentive and responsive customer support staff who can address your concerns and help you when required. Verify the provider's availability of customer service around the clock and the usability of their online policy management site.


It is important to evaluate several factors when choosing a term insurance plan. You should ensure that your loved ones have financial security in the event of your untimely death by taking the time to carefully consider these aspects before deciding. You can also opt for critical illness insurance by adding a suitable rider to your policy.

In addition, don’t forget to compare term insurance with various term plans and choose the best term insurance policy, according to your needs, and the one which offers high coverage at affordable prices. So keep everything in mind while taking a decision.

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