Follow These Tips to Buy The Best Life Insurance Policy

In the year 1956, Life insurance sector was nationalized and in the same year Life Insurance Corporation came into existence. Since then, LIC has been making people aware about the importance and benefits of life insurance policy. But the real penetration of Insurance sector started after the entry of private players in the year 2000, due to privatization of the insurance sector. It extended the benefits and widened the reach of life insurance.
With the efforts of government and insurance companies, the number of people insured in India has increased a lot. But still many people don’t have the right life insurance policy. Many people don’t understand the various aspects of life insurance policy and end up buying a policy which gives them no benefit when required.
So through this article, we will look at some of the tips to buy the best life insurance policy.
Tip 1: Analyze your need for life insurance
You must understand your need for insurance. Your clear purpose for buying a life insurance will help you to filter your search in an appropriate manner. Now, life insurance policy isn’t only limited to protection against life, but it can also be used for various other purposes also. You may buy life insurance as a protection against loan or debt, investment option, saving option or as a retirement plan. For serving all these various purposes, there are different life insurance policies like Term Plan, Whole life plan, ULIP plans and you also need to customize your life insurance plan according to your need. So it is better to understand your basic need for buying a life insurance policy, which will help you get maximum benefit from the policy.
Tip 2: Decide the Right amount of Cover
The right amount of cover puts a strong base for making the best life insurance policy for you. A low amount of cover will keep you away from getting the right benefit while a high amount of cover will dig a big hole in your pocket. It is very much necessary to know how much cover you need. A right amount of cover is built upon the basic four pillars, which are, annual income, future obligations, inflation and debts. Keep all these factors in consideration to choose the right coverage amount which will help you to get what you expect from your policy.
Tip 3: Choose a plan as per your Risk Appetite
It is important to buy a life insurance product as per your need and risk appetite. If you want guaranteed returns on your policy, you should go for a traditional life insurance policy. If you have a high risk appetite and ready to take market risks, then you may opt for unit linked life insurance plan.
Tip 4: Compare Different Policies
Any product bought without comparison can make you pay a higher price with less benefit. Same goes with life insurance policy. It is very much necessary to compare life insurance plans of different companies. And with the availability of internet, comparing life insurance policy has become very easy. Insurance web aggregators provide a very easy and unbiased comparison of different life insurance companies. You can also visit websites of different insurance companies and know about the plan at brief.
Tip 5: Go through Fine Print
It is very much necessary to go through the fine print of the policy. There are many circumstances under which you are not covered in a life insurance policy and you must know them. A brochure of the policy contains all the details and is available on the insurer’s website. You must read every point of the brochure and if any questions arise, you must get it cleared as soon as possible. It will help you to understand the exclusion, inclusion, terms and conditions of the policy at brief.
Tip 6: Check the Insurer details
Always go for a trustworthy insurer. A good insurer will make your purchase, management and claim of policy very easy and quick. A good insurer will have an easy claim settlement process, better service, higher claim settlement ratio and good reviews. And you can check all these parameters very easily. Claim settlement process will be available on the insurer’s website while claim settlement ratio (issued by IRDAI) can be found very easily on the internet. You can read reviews of different insurer’s on blogs and articles of the insurance experts and on company’s website also.
Tip 7: Understand available Riders
Everything comes at a price and the same goes with the riders available with your policy. Riders available with your policy might look very attractive but you need to understand that every rider added to your policy, increases the rate of premium. Even if price is not a big concern for you still, every rider is not useful for everyone. You might add a rider and will be never be able to get benefit from it because you added it without understanding your needs. Riders can do wonders to your policy if required and can also prove to be useless and a very costly affair if not required.
A person with no life insurance cover is almost similar to the person with a wrong life insurance. Just buying a life insurance policy will add up to the number of persons insured in India and will not give you any benefit. So, it becomes very necessary to do a little research and understand your need, so that you can choose the best insurance policy for yourself.


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Financial Planning & Life Insurance

Life insurance is a common sense way to look after your loved ones, particularly if you are the chief earner in your household.

No one likes discussing death, but it is a fact of life, as is the fact that those you leave behind need to be protected. A good policy will allay any fears you may have for their financial security, as the right policy will ensure that any bills like the mortgage can be paid, as can your children’s educational needs, it can even pay for the care of elderly or infirm parents.

Paying Final Expenses

Unfortunately, it costs quite a lot of money to be properly buried in the modern era, with even inexpensive funeral costs running at $8,000, with more lavish ceremonies costing more than $15,000. As you can see, coffins, burial plot and funeral services do not come cheap. This is a lot of money in anyone’s language, and can erode life savings designed to provide protection for your loved ones.

You can buy pre-need burial insurance, which takes difficult matters involving your death such as burial plot and casket choice out of your spouse’s hands, as well as paying the costs before you die. That said, it is preferable to pick a substantial life insurance policy that allows the beneficiary to choose what way to use the payment.

Mortgage Payments

A mortgage is almost always the biggest expense in any individual’s life. With other bills such as insurance, taxes and so on added to this, stress from financial matters can build up fast, so it is advisable to take care of all these together.

If you take away the main financial provider, suddenly the financial strain becomes too much, and the damn bursts, causing loan and mortgage payments to be missed.

To alleviate this stress, buy life insurance, as the resulting payment will take care of any mortgage or loan payments immediately, avoiding further interest being accrued, leaving you with peace of mind, and your family being able to carry on without worrying about losing their home.

Children’s Education

Usually the best jobs go to college graduates, but the cost of third level education has sky rocketed to around $32,000 a year, so if you want your children to receive the best education, then you must treat it as an investment. Such seemingly exorbitant costs are often well beyond the scope of any student, as well as their family.

Taking Care of Parents

If you parents are still alive, they may need assistance in their old age. They have looked after you all your life, now is the time to show your love for them. If they are in need, it is their adult children who are usually responsible. Their medical care and medications are expensive, and they may not be able to cover the costs with their pensions alone. Choose a life insurance policy that pays for senior care expenses, otherwise, the price may be too high to deal with, leading to stress and anxiety from all quarters.

Being Financially Prepared

Life insurance is a vital component of anyone’s financial plan. A good life insurance policy will guard against financial woe, allowing for a high standard of life for your loved ones.