Choosing an ideal term insurance plan is a tough matter. Multiple insurance companies are working in the insurance field. All have various types of plans. So it becomes tricky to select from one of them. In this post, we are going to discuss the crucial points that the agents may hide from you to make a better commission. It is not ok to spend a dollar more for the policy. That is 10 Hidden Facts You Should Know About Term Insurance policy today.
Today we are talking about the top ten hidden facts of the term insurance policy. The following topics will enable you to understand the term insurance policy better. The 10 hidden facts are:
1. Pay installment until retirement
Most insurance company is not going to inform you that. But you should accept the term insurance policy until your retirement age. There is no need to buy a term insurance policy up to the age of 70 or 80 years. You should buy it till you reach age 60. At that age, very few family members will be depending on you.
2. Earlier you take less you pay
There is no age limitation on insurance. So the sooner you purchase term insurance the better it is for you. If you purchase a term insurance plan at an earlier age you have to pay fewer amount of premiums. With the growth in age, the premium rates also move up.
3. Think casual pay annual
Another hidden point of term insurance to keep in mind is that you should opt for paying annual premiums. When you are going to buy a term insurance policy the agent will advise for a single premium policy. But it won’t be the right option. The best policy is paying premiums yearly. You will lose less if the company bankrupt. So if you want to buy a term insurance policy go for a yearly premium policy.
4. “Per day premium” not for everyone
Don’t drop for the per-day premium policy. They may glance appealing but they are not for everyone. There is an age limit. If you are young you should buy the policy. But if you are older the rate of the policy will change. Suppose you are 45 years old and the policy is for the person who is 30 years old. Naturally per day premium of the policy will be much higher for you.
5. Choose riders only if you need them
The insurance company will offer you a rider policy with the term insurance plan. But don’t choose them if you don’t need them. If you travel less there is no need to buy an accidental rider. If there is no record of critical condition in your family.
Probably you can also skip this rider. Although rider gives you an extra sense of safety, choose them only if you feel that you need them. The types of riders available in the insurance policy are:
Accidental Death Rider, Critical Illness, Waiver of Premium, Permanent & Partial Disability, Income Benefit Rider
6. Increase in premium, not a big deal
With time due to your health situation, the premium of the policy can go up. Insurance companies do checkups to define the health condition of the policyholder. So if your health is deteriorating then it is guileless that the premium rates will increase. Don’t close your term insurance plan just for this issue. You have to keep in mind that the risk factor of the company is also increasing.
7. Inform if you smoke or insurance can be revoked
One more hidden fact of term insurance is that drinking or smoking can cancel your policy. If you are hiding the fact that you drink alcohol or smoke, your policy could face denial. It is very essential for the premium calculation. If you smoke the rate of premium will be higher than the normal premium. They will treat suppression of fact as a violation of the contract. In a year there is a lot of claim rejection happening for hiding of facts.
8. A basic plan is a good option
There are various types of life insurance available in the market. Some of them offer you fixed income for 10-20 years after retirement. Some of them offer earnings and a small number of claims. But the basic one is the policy which pays you a lump sum at the time of death. It is more reasonable to opt for this basic plan. This type of insurance doesn’t need any detailed condition.
9. The bigger the better
Don’t go for short insurance covers. If you are going to buy a policy try to buy a big insurance cover that will assist you in the long run. It is better not to buy the insurance policy more than two. Read the insurance policy carefully and don’t ignore updating the nominee’s name.
10. Give information about your health and old insurance policy
Don’t hide information related to your health condition. If you have a major Illness you should inform your agent before buying the policy. There are many types of riders that you can add to the policy. The premium relies on the information that you are providing.
If you have an old insurance policy show it. It will help in reducing the premium if maintained properly.
Conclusion: These are the important top 10 hidden facts of term insurance you should know about. Now it will be more effortless for you to select the correct type of insurance policy. Agents avoid informing you of this critical information as it will generate less commission for him. Ask your agent if you are incapable to understand something. Clear all your doubts before signing the policy. Take guidance from your insurance advisor. He can be an excellent help in selecting the perfect policy for you. If you like this post then you can share it. For further information comment in our comment box. Thank you.