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6 Mistakes You Must Avoid While Purchasing Term Insurance Policy- HDFC Life

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December 12, 2018

One of the basic things that you can do to secure the financial health of your loved ones is to buy a term insurance plan. Term insurance plans are the simple life insurance plans that come with fixed policy terms (time period till the policy is active) and offer the coverage in case of unfortunate demise of the policy holder within that term. Term plans are in fact, essential and basic components in a healthy financial portfolio and must be purchased as early as possible. These plans have the benefit of lump sum payout of the total proceeds (sum assured) to the nominee(s) of the subscriber in the event of hr/his demise but do not offer any maturity benefits when the subscriber survives the policy term. However, some insurers offer a return-of-premium option in the policy which entitles the subscriber to receive the amount that she/he paid as premiums, after surviving the policy term.

While purchasing best term insurance plan, you must be sure to avoid making following 6 mistakes:

  1. Choosing without comparison:

    This is a very common mistake that consumers often make. Online mode of insurance has ensured that you can conveniently log on to the websites of different insurers and can compare the different plans that are on offer. This allows you to choose the features that are suited for your specific needs.

  2. Being underinsured:

    This is a very extensively committed mistake. Being underinsured means not having the sufficient coverage despite having a term insurance plan. Choosing a term insurance plan involves a number of factors like future inflation projections, long term goals or expenses etc. Many times the subscribers do not plan in advance and end up having an insufficient coverage than what is actually required.

  3. Any insufficient or inaccurate information:

    While buying a term insurance plan, you must carefully fill go though the terms and conditions and must make it a point to cross check all the details that you have submitted. Check the medical details and records of the health check-ups that you have submitted. Keep in mind that in case the insurer traces any discrepancy in the given details, the policy can be terminated.

  4. Starting late:

    As mentioned, a term insurance plan is a very important part of a healthy insurance portfolio. This means that a term insurance plan must be purchased as early as possible after taking an informed decision and after weighing all the options. Keep in mind that the longer you delay purchasing the plan, more will become the future responsibilities and this will directly impact the premiums that you can pay, thereby limiting the overall coverage.

  5. Excessive dependence on agents:

    Although insurance agents are there to assist you with purchasing the policies, yet you must bear in mind that nobody can understand your specific requirements better than you. You must consult your family and plan your future expenses. After that you can take the advice of an agent. However, an agent may pitch for a specific insurer. Therefore, you can consult an agent, but never be wholly dependent.

  6. Opting randomly for various riders:

    Term insurance plans come with many riders that seek to enhance the coverage benefits and the flexibility of the plans. However, you must never choose any rider randomly without checking your needs and necessities.

HDFC Life offers many term insurance plans for the safe and secure future of your loved ones. For details, click on the mentioned link: https://www.hdfclife.com/term-insurance-plans.

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ARN: ED/12/19/17049

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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