Term insurance plan forms a core of a financial plan hence, everyone needs to have it. But before buying a term insurance plan here are few parameters to consider to make a right decision.
Sum assured: Typically, a minimum sum assured of ten times of your annual income is recommended. You should adjust this upward for any major liability such as mortgages. Premium rates for term insurance increase with length of coverage.
Riders: One important rider to buy with term insurance is critical illness rider. This rider will pay you a lump sum in case you are diagnosed with any of the specified critical illnesses.
Selecting insurer: You can choose an insurer based on the offered premium and its claims settlement ratio.
You can also buy multiple term insurance plans with same or different sum assureds. You can have the same or different plan durations as well. But you will need to disclose to the second insurer that you have an existing life insurance plan, with details of coverage.
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