We all know the common suggestion that never mix insurance with investment. In addition, we know that we must have a term insurance. Hence, we buy a term plan. However, what are the things that you need to take care after buying an online term insurance?
Buying an online term insurance is not an END. But the start of financial planning. Below are five points which are very much important for online term plan holders.
1) Inform your buying with a spouse or nominee-
This is very much important. Especially, in case of term insurance and that too with online term insurance. You have to share the information like how much sum insurance you bought, term, premium, and the company or product name. This relieves you the basic idea behind buying a term insurance. Because when you die then no insurance company will come to your doorstep and settle the claim. This is an online term insurance; no agent will try to help your nominee.
Hence, once you buy an online term insurance, the first job you have to do is to share this with your spouse or nominee.
2) Safe keep the policy document-
You have to safe keep the policy document. Also, share the same with your spouse or nominee. You must keep the document in such a way that in your absence it must be accessible to your nominees or financial dependents. Otherwise, even though they know that you have a term insurance, but struggle to get the claim due to loss of the policy document.
3) Mark the calendar for the next premium payment-
This one more aspect of to do things. Buying an online term plan is important. At the same time, continuing the existing insurance is most important. Hence, either opt for auto debit option or mark your calendar for paying it within due date. Please remember that sending a premium notice or intimation is purely a choice left with an insurance company. Hence, you can’t blame the same for not paying your premium dues. The entire onus of premium payment left with you, but not with an insurance company.
There are two risks if you forget to pay the premium within the due date and the policy lapsed.
- In most cases, you have to undergo the medical examination once again. During this test, if they found any health issues they may load the premium or reject to revive it (considering the risk of health).
- You have to bear the cost of this medical examination.
Hence, never miss the premium date and pay it within a due date to continue the benefit.
4) Review your insurance need regularly-
I know many buy the term insurance of around Rs.1 Cr to Rs.5 Cr. They feel great and secured presently. In addition, many of them have a wrong belief that this much cover will be enough for them. However, as of now the current insurance coverage may be good. But you have to review it at least once in a 5 yr. Because income, inflation, financial goals, financial dependents may increase. Hence, you have to review it regularly and based on that buy additional life cover.
5) Educate your dependents about how to use claim amount-
Buying term insurance is important, but at the same time, educating your financial dependents about proper utilization of claim amount is equally important. Because you will not be here to plan and invest for this amount. If your dependents not able to handle such huge cash, then an agent or banker may lure your dependents to invest all money in worst product. In worst, the same insurance company may sell an endowment or ULIP plan to your nominee. This in return may devastate your dependent financial life forever.
Hence, educate them about the importance of goal-based investing, product selection, doing homework before buying, or about personal finance.