Salient Features Of A Term Insurance Plan
Claim Settlement Ratio
This ratio refers to the claim percentage out of the total amount of claims settled for the plan throughout the year. A higher claim settlement ratio indicates a better position for the claimants after the death of the policyholder. The primary purpose of Term Insurance is the protection of your dependents' lives after you. Everyone wants a comfortable and secure life for his/her family, even after him/her. The claim settlement ratio becomes more significant when the insurer settles a substantial amount of claims.
Critical Illness Coverage
With Term Insurance, critical illness cover also comes along. The majority of the customers will prefer a critical illness cover in their own plans. Thus, your family will not come to the streets all of a sudden if anything happens to you due to chronic disease. The most common examples of critical illness include the names of cancer, brain tumor, and others. Treatment for such diseases or surgeries can cost lakhs. As a result, the financial condition of a family can go through a really tough time. An insurance policy can act as a safeguard from the upcoming challenges due to a crippled financial condition. The most significant advantage of such a plan is receipt of the cover amount immediately on the diagnosis.
Choosing your insurer wisely is extremely important to obtain a secured policy. To depend on this plan, you have to be faithful towards the insurer first. The solvency ratio will enable you to decide whether the insurance company is financially capable of settling your claim. As per the IRDA guidelines, the standard solvency ratio for a life insurer should be a minimum of 1.5.
In times of natural disaster, the insurer can get a large volume of claims in a very short period. An appropriate term insurance policy will not let you compromise with your family's security. So the role of the solvency ratio is vital for selecting the best policy.
While taking any policy, the cost factor is highly essential. The premium amount is the most vital parameter for choosing any insurance policy. Prior to signing the policy document, you must go through the terms and conditions very well. Your final decision should depend on the cost factor. Moreover, you should compare the terms and benefits of different insurers to invest in the best plan. Again, the premiums for term insurance also fetch you tax benefits under Section 80C.