Five Questions to Ask Before Buying Term Insurance from LIC

The selection of a term insurance plan must be done with utmost care because these are the insurance plans that provide protection for the comparatively longer term. Therefore, before purchasing any term insurance plan it is suggested to do good research of the insurance provider and comparison of different policies. However, so far Life Insurance Corporation (LIC) of India is one of the most trusted insurance companies and it provides some of the trustworthy LIC term insurance plans.

Despite the trust factor associated with LIC, it is suggested to ask a few questions before finalizing an LIC term insurance plan. These questions are:

Question 1: Should I purchase a term insurance plan?

Answer: Before finalizing a term insurance plan, one should ask whether he/she needs a term plan or not. This question is necessary as there are many other types of insurance policies available as well and one may need to purchase some other type of insurance than term insurance. For example, if an individual is young and just started his/her career and do not have people who are financially dependent on him/her then term insurance is not suggested to this person. On the other hand, if one is young and just started the job, but the job requires frequent traveling, then accidental insurance is suggested to him/her instead of a term plan. However, if one is young, started a job, but he/she has financially dependent parents, brother, sister, etc. then purchasing a term insurance plan for long duration is recommended. Moreover, when one is married and has kids who majorly depend on his/her salary, then the term plan should be in his/her kitty.

In this way, whenever one has family or other people who are dependent on his/her income (major dependency on your income), then LIC term insurance plan is the best way to get life cover.

Question 2: Does the premium of the term plan that is purchased today change in future?

Answer: Mostly no, but if such a clause is mentioned in the documents of the policy, then the insured must cross check it. Most of the times the premium remains constant throughout the policy tenure provided one has not brought up any riders or made changes in the policy inclusions.

Question 3: Explain the riders provided under LIC term insurance plans? 

Answer: The riders or add-ons are the benefits that one can add in his/her base term insurance plan to improve its coverage. Some of the riders offered in LIC term insurance plans are:

• Critical Illness Benefit: This rider improves the coverage of normal term insurance plan by adding critical illness benefit in it. Under this, the policyholder gets a lump sum amount, if he/she is detected with some critical illness like cancer, heart attack, heart stroke, etc. The covered critical illnesses are mentioned in the policy.
• The rider with Accidental Death Benefit: If an insured dies due to an accident during the policy tenure, then this rider benefit works. This benefit is above the basic sum assured provided in an LIC term insurance plan.
• Premium Waiver Rider: Upon selecting this rider the premiums are waived off if the policyholder becomes unable to pay the premium due to disability or loss of income and the policy continues.
• Accidental Disability Advantage Rider: If the insures suffers permanent or partial disability due to some accident, then this add-on rider works the best. In this situation, the policyholder gets the payment in lump sum amount or via a regular payout depending upon his/her requirement.

Question 4: How much term insurance cover should I opt?

Answer: As per the experts of term insurance, one is suggested to opt for a term cover of at least 20 times of his/her yearly income. One must analyze and understand his/her future liabilities and responsibilities such as education of the child, marriage, etc. and then finalize the coverage amount.

Question 5: What does happen if an individual start smoking after a few years of policy purchase?

Answer: If an insured gets into the habit of drinking or smoking, then he/she may reduce his/her life expectancy after the policy purchase. However, he/she should reveal this fact to the insurance provider as these habits can take one to a different pool of risks. Otherwise, the insurance company may cancel the policy or may increase the premium. In this way, it is always recommended to inform the insurance provider in any such case wherein there is a breach of the clause.

Bottom Line: 

Asking these questions can lead one to select the most suitable term insurance plan like LIC term insurance policy. So, what are you waiting for? Just select a term plan of LIC as per your requirements.