People have relied on insurance agents as the most conventional way of buying policies. However, with the advancement of technology, the insurance industry has undergone significant evolution. As most of the offered services are online now, you can get your perfect insurance with a few clicks and on your own.

Let’s learn the different aspects of term insurance through a short 5-step process to help you buy that perfect term insurance for yourself!

By the name, we can clearly understand that time plays a major role in this type of insurance. Term insurance is defined as a type of life insurance that provides coverage for a fixed period of time or term.

The beneficiaries receive a hefty amount if the policyholder expires during the insurance term. These kinds of insurance prove to be good only if you want coverage for a specific time period, as they can provide financial aid in the event of the death of the policyholder.

Step 1: Assess Your Insurance Needs

The first and foremost thing that you need to do is assess your requirements. Decide on the amount of coverage, along with your income liabilities and future financial goals. If you choose the wrong amount of sum assured, it may become a burden.

In addition, you need to choose the proper duration of the policy based on your age, gender, lifestyle, and the sum assured. Companies usually offer a duration between 5 and 40 years.

Step 2: Compare Plans According to Your Financial Goal

When you compare term insurance plans, one factor to consider is the affordability of the premiums. The cost of the premium should also be compared with the benefits offered. The primary benefit should be a large sum that will be paid in the event of the insured's death.

The key points that are to be considered are:

• Death Benefit: The amount paid to beneficiaries upon the insured's death, providing financial security.
• Low Premiums: Affordable monthly or annual payments, making term insurance accessible for many.
• Coverage Duration Flexibility: Options to choose the length of coverage, typically ranging from 10 to 30 years, based on individual needs.
• Riders: Additional features or benefits that can be added to the policy for extra protection, such as critical illness or accidental death coverage.

Affordable term insurance provides financial security and allows you to plan your budget. It is very important to financially provide for your loved ones by staying within budget limits.

Step 3: Customise Your Policy with Add-Ons and Riders

Riders are additional benefits added to your insurance policy to provide extra coverage or any kind of risk protection. These can also be called endorsements. When your policy doesn't satisfy all your financial needs, you can opt for riders to customise your perfect term insurance plan. Some examples of riders are:

• Accidental Death: Coverage for an untimely death during an accident.
• Income Benefit Rider: Required for the family’s main earner.
• Waiver of Premium on Disability: The future premiums are waived if the insured gets permanently disabled.
• Waiver of Premium for Critical Illnesses: The future premiums are waived if the insured gets diagnosed with a covered chronic illness.

Step 4: Evaluate the Claim Settlement Ratio and Reviews

A claim settlement ratio is an important point to focus on when buying a term insurance policy, as it indicates the percentage of claims an insurance company settles out of the total number of claims. This reflects the likelihood that your claim will be paid out during your distress.

A high CSR value indicates the successful processing of your claim, proving the insurer’s worth and reliability. Generally, a 90% CSR value is considered good, and companies with 95% CSR are considered excellent.

Step 5: Complete the Online application and Undergo Medical Tests

After you have decided on the budget and the insurance company, the next step is to visit the company's official website and fill out the online application form with all the required details, such as name, age, sex, profession, etc. After submitting the application form, the last step is to undergo medical tests.

This is part of the verification process, where the insurance company appoints a healthcare facility for you to take the tests.

1. Policy Documents and Grace Period

The Grace Period is the fixed period after the due date, during which no penalty will be charged for late payment. To analyse the effectiveness of the grace period, consider the following three factors:

• Length: It is usually 30 days for annual premiums and 15 days for monthly premiums.
• Impact: Consider the consequences of not paying within the grace period, which may sometimes lead to a lapse in policy. 
• Coverage: Make sure that the policy still provides coverage during the grace period in case of non-payment of premium.

2. Free Look Period

The free look period is the time period during which a new policyholder is free to terminate his insurance policy without paying any penalty, such as surrender charges.

Here are some important points to consider about the free look period:

• Duration: The free look period usually remains until the first 15 days. However, some companies may extend it up to 30 days.
• Starting Time: The free-look period starts on the day you receive all the documents related to your policy and not on the day you buy the policy.
• Cancellation Policy: To have a better experience, connect with the insurance policy properly and learn about the cancellation policy and its process.
• Refund: The insurance policy will not provide a complete premium refund and will deduct some part to cover related expenses.
• Documents: To prove the delivery date, keep the policy documents in an envelope.
• Contact Details: Provide your correct contact details so the insurance company can reach out to you and explain the free look period and other important policies.

3. Renewal and Policy Updates