A life insurance policy is meant to provide financial protection to the policyholder’s loved ones if the policyholder passes away. It gives one coverage or protection on one’s life for a set amount of time, as long as your premiums are paid timely.
Depending on the terms of the life insurance policy, a claim is paid to the beneficiary of the policy when the insured person passes away. Getting a life insurance policy that fits your needs is crucial so that your loved ones will be taken care of financially after you breathe your last.
In India, there are a number of life insurance companies with a wide range of products. Here are five simple questions you should ask yourself before choosing a life insurance policy.
1. Do I need to buy life insurance?
The answer would be a loud and clear “yes.” You don’t want to leave your family with debts, like a home mortgage payment, that may be hard for them to pay off after you pass away. Similarly, you would want to give your loved ones the good life they have now. Life insurance is necessary if you want to ensure your kids have access to a good education when you’re not around. This is probably the most vital choice you can make for your family’s future.
One of the more common insurance in India is Unit-Linked Insurance Plans (ULIPs). This type is made to offer a mix of life insurance benefits, coverage and ways to build wealth through investment returns tied to the market.
2. When should I buy life insurance?
Buying life insurance is always a good idea. You shouldn’t rush into this decision, but it’s also not wise to wait until you get a new job or reach a financial goal before getting life insurance. Also, there is no best time to buy life insurance.
Generally, the younger you are when you buy a life insurance plan, the better it works for you. This is because insurance premiums are based on how old you are; the older you get, the more expensive your premium can be. So, there is a price to pay for waiting.
3. How much life insurance do I need?
The answer to this depends on various things and is different for each person. It’s important to take your time and carefully consider. Use online tools like websites, price comparison sites, aggregators, etc., or contact insurance companies directly to get the best quotes. Alife insurance calculatoris a handy tool that can help you come to a decision based on your needs.
4. Should I buy life insurance online or offline through an agent?
It is better to try to buy life insurance directly from the insurer since it means there are no intermediaries involved. However, if you feel the need, you can also reach out to an agent so that they can guide you better. An agent is also an ideal choice if you are new to the process of buying life insurance.
5. How do I choose the company from which to buy insurance?
Price is important, but it shouldn’t be the only thing that you consider. As a smart consumer, you should compare insurers in other ways:
- Look for a product with features that aren’t too complicated but give you options to meet your needs.
- Check to see if the insurance company is a reliable one. Check the brand’s solvency ratio to understand how an insurance company is performing financially and whether it can pay out claims.
- Look at reviews of customer service most of all. Read online reviews to find out how claims are handled, how long it takes to settle claims, what paperwork is needed, etc. You don’t want your loved ones to have to run around trying to meet a long list of requirements to receive the sum assured amount.
Life can be unpredictable, but if you plan ahead and know how to choose the right life insurance plan, you can ensure your family’s financial security to a great extent. Take enough time to figure out what you need, carry out research on your options, and then make a decision. When you apply for life insurance, ensure to be honest about your lifestyle and medical history. At the end of the day, it’s essential to have financial freedom and peace of mind for yourself and your family.