Ashok is 35 years old and works as an engineer in the water works department. When he was 25, he enrolled for his first term insurance policy for a period of 10 years, for which he was charged a nominal premium annually. He chose a shorter policy term with the idea of saving more money, since shorter policy tenure would mean lower premiums. Now, at 35, he realizes the folly that he committed by opting for the just lapsed shorter-term policy. In order to ensure that his wife and young kids have some financial cover in the event of his sudden demise, he had to opt for another term policy. He was much more careful this time and chose a term policy for a longer duration of 20 years, but at a higher premium.

A term policy comes in handy for an individual to financially shield his family on his sudden demise. However, people buying a term insurance for the first time tend to commit a few common mistakes while selecting the policy. Here are the top 5 blunders that amateurs make when selecting a term policy:

Given these top 5 mistakes, amateurs need to be extremely cautious in selecting the right term plan to suit their family’s future financial requirements, in their absence. Good term plans such as the Generali Central Flexi Online Term Plan provides flexible coverage options in the form of a basic life cover that offers a lump sum payout on the policyholder’s death, and an income protection cover that offers a monthly income to the beneficiary on policyholder’s death till the time he would have turned 60 or for 10 years, whichever is higher. The plan provides a minimum policy term of 10 years and a longer life cover of upto 75 years along with lower premium rates for women, and a discount in premium rate if the sum assured opted is higher. The premiums paid by the policyholder are eligible for tax exemption under section 80C , 80D and section 10 of the India Income Tax Act, 1961.

Thus, while selecting a term policy, amateurs need to look out for such policy benefits that can very much align with the future financial needs of any family in the event of policyholder’s death. Once enrolled in the plan, the policyholder cannot afford to forget informing the nominee of the plan and its benefits, since it is as vital as selecting the right policy. You can avoid all the mistakes while buying term insurance by reading this blog.