None of us wants our families to go through unnecessary hardships or face burden of the financial crisis. Term insurance plans give you the opportunity to secure your family’s needs with a minimum amount of investment. However, choosing the best term insurance company is a task in its own.
Tips to choose the best Term Insurance Company
There are a plethora of options available in the insurance market when it comes to term insurance plans and the insurance companies providing these plans. However, choosing the one that meets all your set of requirements should be your ultimate aim.
Here’s a look into the factors that will help you company:
1. List down your requirements
Before starting your search for the best term insurance company, you must list down all the requirements you are looking forward to in your term plan. Few of these requirements include your current health status, your annual income, number of dependents, your current liabilities, your current lifestyle, amount of life cover you wish to get, etc.
2. Service Provided by the Term Insurance Company
Before purchasing a term plan, it’s always a better decision to get an idea of the customer service provided by the term insurance company. Make sure that the company pays attention to its policyholders’ confusions and solves their queries in a timely and precise manner.
3. After Sales Service
This is undoubtedly one of the most crucial factors while buying a term insurance company. It’s important to realize that buying a term plan is not the end of the road. What is the level of after-sales support provided by the insurance company is an equally important factor to decide while buying a term insurance policy.
This is because the family is already grieving while making claims due to loss of its family member. Complex and unfriendly after sales service will further increase the suffering of dependents of the policyholder.
A term plan is a long term commitment for both the parties involved -for the insurance company as well as the policyholder. It means that the insurance company should be reliable enough to maintain its commitment even after a period of 15 or 20 years down the line. Hence, choosing an insurance company which has proven its reliability by giving a higher number of settled claims will be more helpful in the long run.
5. Claim Settlement Ratio
Claim Settlement ratio (CSR) of a term insurance company should be one of the most important criteria while looking for a new term plan. The CSR of a term insurance company is calculated by deducing the number of claims received in a year against the number of claims settled by the company. For instance, SBI term insurance has a CSR of 96.69% which is pretty good compared to other insurance providers.
This ratio plays a huge factor in determining the reliability of a term insurance company.
6. Claim Rejection
Claim rejection is another factor that needed to be considered while looking for the right term insurance company. There are chances wherein due to unfortunate reasons insurance companies may reject your claim. However, if an insurance company shows a high number of rejected claims, it significantly decreases the company’s credibility. Higher claim rejection ratio points to lower credibility ratio of the insurance company.
7. Number of Grievances Solved
Every term insurance company follows a different grievance redressal system. These grievance redressal systems show the company’s approach towards its customers’ grievances. Higher the number of grievances solved, higher will be the chances that your grievance will be addressed in a satisfying manner.
The best term insurance company will have a variety of term insurance products to choose from. You will get to choose from online term plans, the return of premium term plans, etc. to suit your needs and your family’s financial requirements in your absence.
Some people still think that investing in term insurance is unnecessarily investment and locking your hard-earned money, which won’t benefit them in any manner. However, buying a term insurance plan is as important as saving money in other investment tools.
Term insurance offers the much-needed peace of mind to the insurance holder as it’s a solid way to avoid future financial struggles of his dependents.