Buying term insurance is a critical step in securing your financial future. A term insurance policy provides your family with financial protection in the event of your untimely death. However, merely buying a term insurance policy is not enough. You must take certain steps after buying term insurance to ensure that your family receives the full benefits of the policy. In this article, we will discuss eight things to do after buying term insurance.
Understand Your Policy
The first thing you should do after buying term insurance is to read and understand your policy. Review the policy details carefully. You should familiarise yourself with the terms and conditions of your policy, including the sum assured, policy term, premium payment frequency, and policy exclusions. Understanding your policy will help you avoid any surprises when you need to make a claim. Make a note of the policy renewal date and the premium payment due date to avoid any lapses in the policy.
Inform Your Family
Once you have purchased a term insurance policy, it is essential to inform your family members about the policy. Your family should know that you have purchased a policy to provide financial security to them in the event of your untimely death. You should also inform them about the details of the policy, such as the sum assured, policy term, and premium payment frequency.
Nominate a Beneficiary
Designate a beneficiary for your term insurance policy. The beneficiary is the person who will receive the sum assured in the event of your untimely demise. It is important to nominate a beneficiary as it ensures that the policy benefits are passed on to the intended individual. Review your nominee details periodically and make changes as required to ensure that the policy proceeds are passed on to the right person.
Pay Your Premiums On Time
Paying your premiums on time is essential to ensure that your policy remains in force. Missing premium payments can result in the policy lapsing, and your family will not receive the death benefit in the event of your untimely demise. You can set up automatic payment options to ensure that your premiums are paid on time.
Review Your Policy Regularly
It is crucial to review your term insurance policy regularly to ensure that it meets your current needs. Changes in your life, such as marriage, the birth of a child, or a change in your financial situation, may require you to update your policy. You should review your policy at least once a year to ensure that it continues to meet your financial goals.
Keep Your Documents Safe
After buying term insurance, it is important to keep your policy documents in a safe place. You should also inform your family members about the location of the documents. In the event of your untimely demise, your family should be able to access the policy documents without any hassle.
Keep Your Contact Details Updated
It is important to keep your contact details updated with your insurer. This includes your mailing address, email address, and phone number. In the event of any changes to your policy, the insurer should be able to reach out to you promptly. You should also ensure that your family members have the contact details of the insurer.
Inform Your Advisor About Changes in Your Life
If you have purchased term insurance through an advisor, you should inform him or her about any changes in your life that may impact your policy. This includes changes in your financial situation, health, and personal life. Your advisor can help you make any necessary changes to your policy to ensure that it continues to meet your financial goals.
Purchasing a term insurance policy is a critical decision that ensures financial security for your loved ones in the event of your untimely demise. After buying term insurance, it is essential to review the policy details, nominate a beneficiary, inform your family members, keep the policy document safe, pay premiums on time, keep your insurance company informed, maintain adequate coverage, and consider adding riders to your policy. Following these steps will help ensure that your term insurance policy serves its intended purpose and provides financial security to your loved ones in the event of your untimely demise. Moreover, you should always have your policies opened with well-known firms offering good insurance schemes. They provide a smooth procedure at every step along with personal assistance. For instance, Aditya Birla Sun Life Insurance offers complete online and offline support that helps you open and manage your policies easily.