Things you must know about life insurance before buying
Life Insurances 154 views
Do you need a life insurance policy? Is it really important to buy a life insurance policy?
Life insurance is a kind of financial protection for you and your family. It helps you to grow your money and build funds to meet your financial requirement in future. There are various policies available in the market from different insurers. You can choose a policy as per your requirements and financial goals. It is really important to understand the different aspects of policy before buying it. When you buy a life insurance policy from any agent there are chances that he/she will not tell you about the flip side of the policy and sell a policy, which is not of your use. Therefore, it is really necessary to understand the policy minutely and buy the most suited one to meet your requirements. Here are some important points you should know before buying the life insurance.
You need higher death benefits than you think: If you think that Rs. 50 lakhs sum assured is a good enough money for you, think again. If you are married and you have young kids, who want to join some good college or a professional course someday and you also have loans to be paid. In such financial liabilities how much coverage you need depends upon your salary and expenses. Calculate all possible financial expenses before you buy a life insurance policy such as child's education, child's marriage, home loan, credit card debt, personal loan, medical emergency and other lifestyle expenses.
Choose the right life insurance policy: Term life insurance will offer you a cover for a defined period of time and after the completion of the tenure you will no longer have insurance. Buying a term insurance is a good option for those who can't afford permanent insurance. It is also useful for those who only want to be insured for a certain period of time. It is important that you understand your needs and buy a policy accordingly. A term plan will not provide you sum assured, whereas a life insurance policy offers you a sum assured along with risk cover and other benefits. However, the premiums of these policies are higher as compared to term plans, but they also offer you a good amount after the maturity of policy. So, choose a plan, which will offer you higher benefits and financial security to your family in any uncertain situation.
Are you buying add-on covers as well: While buying a policy the sales person will tell you different benefits of add-on covers. They tell you that by paying a little more premium you can enjoy more benefits as health/medical benefits, riders benefit on your policy. Therefore, at the time of buying a policy and including the add-on covers on your policy, just ensure that these covers are really useful and you are not wasting your money.
Buy a policy with guaranteed returns: There are different life insurance policies available in the market. You can choose a policy, which is best suited for you. Always go for a policy that offers you assured returns on your investment. Buying a policy with market risk and unsecured benefits can leave you in trouble. So, ensure that your policy will provide you some assured returns.
Choosing the right premiums is important: You can't predict the future in advance. But, it is always good to take calculated risk in life. If you have chosen a premium, which is too high as compared to your salary becuase presently you don't have any financial liabilities, but in future with additional family members and financial liabilities, it is not always possible to invest in the same mode. Pay attention to the amount you will choose as premium for policy keeping in mind your future financial liabilities.
Don't wait too long to buy the policy: Try to buy a policy at a young age. The younger you are, the lesser will be your premiums. While buying the insurance at young age you need not to go through the extensive health check up before buying the policy. But, if you will buy a policy at later age, you have to submit your health check up details as well. If you will have any health issue in future, the premiums of your policy will go higher. Moreover, there are chances that the insurers might denied coverage as well. It is always good to buy a policy at an early age to avoid all such issues.
Review your policy if necessary: Your life insurance needs change with the changes in life. When you get married, have kids or parents as your responsibility, always ensure that you are choosing the right nominees. During the major changes in life always ensure that you have the freedom to change the nominee in your policy. Always make sure that your death risk cover is going to the right nominee in your absence.
Check the insurer on settlement and disbursement ratio: It is always important to find the right insurer to buy a policy. Before buying the policy, always ensure that you are selecting the right company to get yourself insured. If the company is not good in disbursing the amount and the claim settlement ratio is very low, don't buy a policy from that company be it very attractive or you need to pay the lowest premium. Think about a situation if in your absence your family will not get the required or assured money from the company. All you efforts and money will go waste and your family will face financial crisis as well. So, choosing the right insurer is also important.