Important tips for buying a life insurance policy

Introduction

Life insurance comes with many benefits. Nowadays, life insurance It is not just a contract between the insurer and the insured, which provides protection against the risk of life by paying a premium. For sustainability in the market, each company and product must adopt the current demand and circumstances, and the same is the case with life insurance products. In these years of market changes, life insurance and regulatory companies have taken important steps to meet the changing demands that have provided clients with the following options and benefits:-

• Wide range of product portfolio
• Savings and investment options
• Additional benefits with life insurance
• Different ways to get a low premium and high coverage
• Additions to the list of key features of life insurance policies
• Transparency and hassle-free procedure

With a bevy of different companies, products, and benefits to choose from, you need to choose the best one for you. There are many things that you should consider before buying insurance and there is no specific guide to choose the best one, it all depends on your need and situation. But there are some important points related to each policy that can help you filter the best insurance policies. Based on those important points, we have summarized the following important tips for buying a life insurance policy.

Tips

• start early

Buying Life insurance when you are young gives you many benefits. You will be able to get high coverage at a very low premium rate because age has a direct effect on the premium rate (the younger the buyer, the lower the premium). Plus, with a low premium, you’ll get better financial planning, long-term coverage, and your premium will be locked in at a very low rate for the entire term of your policy.

• Choose the correct coverage amount

Don’t decide your policy coverage based on your feelings or calculations based on single factors (like 10 times your salary). When deciding the amount of coverage, always consider your current lifestyle, debts, assets, future obligations (children’s college education, settling your family in different places, etc.) and the rate of inflation. Choosing low coverage will give you zero benefits, while choosing high coverage will be an expensive deal for you.

• Comparison is the key

Comparison is very necessary before buying an insurance policy. Helps you choose the best policy at the best price. There will be many sources that will not offer the benefits you are looking for and may be available at different rates. There are many IRDAI certified comparison portals that provide a comparison of different policies on their websites that is unbiased and easy.

• Choose the right policy

Different policies have different benefits, eligibility criteria, terms and conditions, exclusions, and inclusions. You can choose the right policy for you only if you know it well. So the key to choosing the right product is to understand it better. Learn about available riders, additional benefits, what your policy doesn’t cover, premium rates and everything else related to your policy. Know your needs well and then find policies accordingly.

• Choose the right company

There are more than 20 companies in India and it is very necessary to choose a trusted company. There are some companies that offer better insurance policies and they are also reliable. It is necessary to check the claims settlement ratio, review (by client and experts), claims settlement process, product portfolio, price, etc. from different companies to choose the right one.

• Understand the brochure

There is a brochure available with each Life Insurance product that is available on the company’s website. It contains all the benefits, features, eligibility, inclusions, exclusions, key terms and conditions related to the policy. Review each fine line of the brochure to fully understand your policy. It will help you use the available benefits and avoid unpleasant surprises in the future.

• Disclose your information correctly in the proposal form

Some people hide data about themselves while filling out the proposal form and providing personal details to the company. For example, some people mark themselves as non-smokers while giving details to get low premiums. But then, at the claims stage, it could result in zero profit as the claim will be rejected due to misleading information provided by the insured. You cannot mislead the company by giving incorrect information. So to avoid any inconvenience during the policy or at the time of making claims, it is always necessary to provide the correct information about yourself to the company.

Never buy a Life Insurance policy in a hurry because it is a decision that will affect your whole life. Take some time to do your research and fully understand your needs because a precision purchased policy gives you exactly what you want.