Everyone at one point or another in their life requires to purchase term insurance. It can be for you, your family members, or someone you know, especially in India, where the number of active term insurances is rising. Purchasing a term insurance plan is a process you must complete with utmost precaution. Any clerical mistake or blunder in choosing a plan can have adverse effects while applying for claim approval. People often make several such common mistakes while buying a term life insurance policy. Read on to know more about six such common mistakes in detail.

A Low Maturity Amount

Keeping a low maturity amount will only harm your finances instead of being useful. As you invest your hard-earned money into term insurance, you wouldn’t like to see it face depreciation. Most term insurance maturities are after ten or more years from the policy commencement date. So, if you keep a low maturity amount, all your invested capital and gains will lose their value due to inflation rates. The maturity amount you choose must seem high considering the current market value, but that amount won’t have much value after a decade or so. So always choose plans which have a high maturity amount.

Not Comparing Plans Across Different Insurance Providers

Failing to compare plans is also a great mistake. You won’t realize the benefits and interest rates of different plans from different insurers unless you compare them. Comparison will allow you to choose a plan with the least premium and several benefits. Another benefit of comparison is protecting yourself from being financially exploited by an insurer.

Overlooking Terms and Conditions

Another common mistake that people often make while buying term insurance is overlooking the terms and conditions of the policy. The terms and conditions of the policy legally describe all the liabilities and returns. It gives you a clear idea of what you are getting into and the hidden costs in the plan. Overlooking these can cause several financial liabilities and losses in the future.

Choosing Unwanted Add-ons

Add-ons and customization are great tools that allow you to create a plan of your liking. But if you don’t use them, it can cause monetary burdens due to the high premium. Some people often forget to remove some unwanted add-ons from their policy, increasing the final premium amount. It would also be good to understand what these add-ons provide before opting for them in your plan.

Having Smaller Term Durations

People often fall for term insurance plans with a low premium due to a smaller term. Several banking institutions provide such insurances with annual validity for a very cheap rate. But you will have to renew these policies every year and submit fresh documents every time you renew. Other drawbacks of term insurance with smaller term durations are limited returns, lack of annual no-claim bonuses/incentives from the insurer, limited maturity amount, etc. So, if affordable, always choose a plan with a longer duration to increase your gains from term insurance.

Purchasing Plan Without Knowing Details and Benefits

In this online age, people often choose the online mode rather than the offline mode of policy purchasing. Both the types have disadvantages, which have a common root, lack of knowledge of details and benefits. If you only prefer the online mode, you can’t get the detailed information and first-hand advice you get in offline agent consultations. And if you only prefer the offline mode, you won’t have access to the online offers, cash backs, and discounts restricted only to online transactions. So, make use of both the modes to know all the details and benefits of a plan before purchasing.

You can confidently purchase term insurance next time by understanding the effects of these six common blunders in term life insurance. This will especially help the young brass who want to secure the lives of their family and loved ones. If you, too, are planning to purchase term insurance, don’t forget to look at the policies from the leading life insurer in India.