A recent survey reported that millennials hardly spend much on buying the insurance and only 17% bought insurance policies out of the group. Young people are not buying insurance because they do not have any liabilities or dependents, and they do not focus on long term planning.
Insurance cover is essential to replace income after settling any debts, especially the sole breadwinners. As the term plans are dirt cheap, young people can buy it. Purchasing at later years will only make insurance a costly affair.
An annual or one-time premium
Instead of paying the premium annually, there is ease of paying a single premium instead of renewing every year. Most of the insurance companies now offer policies with single premium plans, staggered payout plans, increasing cover plans, limited premium payment plans, and even plans, which return the entire premium on surviving the full term. However, millennials are unable to decide which policy is suitable.
Selecting the right term
Extending the cover more than the working years of individual costs very little but, protects against future. Therefore, to replace income and settling outstanding loans, insurance that covers 8 to 10 times more than annual income is better.
Since inflation lowers the value of cover, some companies offer term insurance best plan that increase the cover 5-10% after a few years with a maximum cap limit.
Limit premium term if unable to pay
The reduction in tenure increases the premium, therefore, limiting premium term is helpful who are unable to pay a high amount of premium later.
Undergo Medical Tests
Some companies ask for medical tests while some trust a declaration of good health before issuing term policy. The premiums are lower for healthy persons, but sometimes medical test may lead to better premium rates. A medical test also helps in avoiding any chance of rejection based on pre-existing disease.
Selecting Frequency
Choosing monthly or quarterly payments help in avoiding any chance of missing the premium and are also helpful if the annual premium is too high.
Right Tenure
The term insurance policy cover must extend to 60 to 65 years of age and precisely it should not be too short or very long. Avoid buying insurance in later stages of life as it will be costly.
Accidental death rider
The cost of premium tends to rise when accidental death rider along with a waiver of premium is added. It is beneficial since it enhances the cover. Companies have come up with limited period payment plans with the waiver, which is helpful for those who are unable to pay the premium in the later years.
Full Premium Back
Insurers offer attractive policies that return the entire premium that has induced people to buy insurance.
Enhanced cover for inflation
Some cover plans can be costly if they protect against inflation. They handle inflation and prevent the need to buy more insurance later in life.
Conclusion:
Choose a suitable term insurance best plan, for financially sound family select lump sum payment Otherwise select the staggered payment option. Monthly payouts are suitable for families who require regular income.
