Disadvantages of Life Insurance Policy: Take the Right Decision

Life Insurances 204 views

Life insurance is one of the most trusted and secured way of investing your money and securing your family financially. But, before buying any policy you should always understand and think that do you really require that policy or term plan? Is that policy worth investing money? Do you really think that it will help in achieving your financial goals? Life insurance has different benefits and advantages. Most of the people want to invest their money in life insurance policy, but at times you hardly inquire much about the various terms and conditions of the policy and get trapped with the wrong product. Most of the time policy advisor don't tell you the rules and other terms of the policy in detail. You even don't bother to ask about the disadvantages of the policy after knowing the advantages and benefits of the policy.

While buying a new policy you should pay attention to various factors and points to get the maximum benefits from your policy. You should always ensure that it is offering you right kind of benefits and there will be no issues in getting the benefits and payments in case something unfortunate happen to you. There are always two sides of a coin. All things never come with advantages only. There are always some disadvantages linked with your life insurance policy. Here are some disadvantages or risk factors linked with your life insurance policy, which you should always keep in mind at the time of making the final buy decision.

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Buying life insurance with wrong benefits: If you are not aware of the benefits and advantages of the policy you should not buy it. Buying the policy just because some one recommended it to you is not the right buying reason. You must inquire about is it offering the kind of benefits you are looking forward in your policy? If it is not offering you the desired benefits and advantages it is not the wise decision to buy the policy.

Buying insurance when you don't need it: Buying the insurance when you don't need is like blocking your money and investing without purpose. If you are in your late 50's at that time if you are buying a policy for 20 years or 30 years, it will be of no use as you will have no dependents at the age of 70 years or 80 years when you get your maturity amount. So make the right decision of buying the policy with your future projection and financial goals.

Buying policy with complex format: Many people buy the policy without understanding the complexities of the product and benefits. You invested in a product where your returns are linked with market trends, but actually you want a product which will give you assured returns. In that case, the policy is not going to help you to achieve your future goals. Buying policy with complex plans such as child policy, ULIP, endowment plan etc., are such plans offering you optimal benefits. These financial firms make more money by selling such complex products, which are based on optimal usage and understanding of the product to get the higher returns.

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Buying expensive policies: At the time of buying a policy you trust the policy advisor most and even don't bother to compare the price and other benefits of the product with other available policies. You generally end up buying a policy an expensive policy offering you limited benefits. Therefore, it is important that you should buy a policy after comparing it with other similar kind of products available in the market.

Buying a new life insurance policy is not a rocket science or need a formula to get the higher returns on your investment, rather you need to play tactful while buying it. There are various policy products available in the market and it is a bit complex to make the choice. But, to make it simple and understandable, you should always compare the policy you want to buy with other similar products. You should always check the benefits and premium amount you going to invest. Also, check the policy on risk cover, other benefits, coverage in policy, medical and health benefits, policy premium and tenure and assured sum, etc. So to keep it simple it is necessary to understand the product better for higher coverage.