Applying for Life Insurance: 3 Things to Consider
Published On Apr 29, 2021 1:25 PM By InsuranceDekho
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As your responsibilities develop, it becomes gradually more significant to guard the present and plan for the future. Life Insurance is an efficient financial planning tool that offers numerous advantages ranging from savings, protection, tax benefits, etc. But before you purchase a life insurance, it is essential to be well equipped to select a plan that meets your requirements.
Top Things To Consider When Buying Life Insurance
Because of the extensive selection of life insurance companies and policy details available, it is smart to carry out some due diligence before you jump in. Consider these 3 things in mind as you go about your life insurance policy buying decision:
1. Understand The Purpose Of Buying Insurance
Keep in mind that you are buying life insurance to plan for some particular objectives, cover your life and protect the financial future of your dependents. Do not purchase insurance only for secondary benefits, such as tax savings.
Consult an insurance agent who can offer you information on life insurance products in addition to someone who can assist you in evaluating your insurance requirements. The assessment exercise should make sure the amount of life insurance cover you purchase will offer the much-needed monetary protection to your family after your death.
2. Compare Insurance Policies
The two types of life insurance are savings-cum-protection insurance and term insurance. Term insurance offers protection against events that would otherwise be monetarily upsetting. Term insurance is inexpensive. Remember that no payment is made by the insurance firm if the insured endures the policy time.
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On the contrary, savings-cum-protection plan offers you a benefit which is same like that of the sum insured along with bonus additions. Term insurance is for financial protection of your dependents against an unanticipated event where you do not get any personal benefit. Your choice should rely on your needs, both future and immediate.
3. Select A Cover That You Can Afford
After assessing your life insurance requirements, find out how much it will cost you in regards to yearly premiums. Before buying a life insurance policy, check if you can afford to pay premiums for the whole policy term. If your cover requirement is bigger, it would not make logic to opt for a savings-cum-protection policy.
A term insurance will match you as it is inexpensive and you will be able to pay for the premium. The initial objective of insurance must be protection. If you think it is possible for you to pay high premiums on a regular basis you can go in for a savings-cum-protection plan afterward.
Apart from this, it is important to assure yourself about the credentials of your selected life insurance company. This includes claims settlement ratio, solvency ratio, and Assets Under Management. Besides this, excellence in customer service, reviews, and corporate governance practices offer vital information about the overall company performance.
Also Read:- 5 Things to Think Before Buying Life Insurance
Life insurance is a long term contract between you and your insurer, and it will advantage your family when you are not there. It is in your best interest to select the right plan for your family by considering all the three factors mentioned above.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.