Choosing Right Life Insurance Plan
Published On Jun 05, 2021 12:00 PM By Shrida Gulati
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Selecting and choosing a life insurance plan can be quite confusing. It is important to make an informed decision while purchasing a life insurance policy. To make an informed decision about choosing the right life insurance plan one should have proper knowledge about the life insurance policy and proper knowledge of the insurance provider.
How To Select The Right Life Insurance Plan?
There are many types of life insurance plans that offer different kinds of benefits and it is essential to choose a plan that best suits your requirements. Here are some tips that will help you choose the right life insurance plan:
1. Recognize which policy fulfills your requirements
Life insurance comes with different types of life insurance plans. Some of the life insurance plans are ‘pure risk plans’ also known as term insurance plans and some other life insurance plans like ULIPs, endowment, child, retirement and money back plans come with an investment tool through which you can avail the benefit of a life insurance and save your your invested money for future. To choose an appropriate insurance plan for yourself solely depends on your insurance requirements. Before purchasing a life insurance plan you should analyse your requirements from a life insurance plan that helps you choose the right category of the life insurance plan.
2. Claim settlement ratio of insurance companies
As we know life insurance offers the reimbursement of the invested money at the time of an eventuality, it is very important to choose an insurance company that has a smooth, quick and effective claim settlement process. An insurance company can achieve a smooth, quick and effective claim settlement process by reaching a high claim settlement ratio. Claim settlement ratio of an insurance company represents the number of claims settled in the financial year against the total number of claims. Higher claim settlement ratio of the company displays the loyalty of the insurance company towards its customers and it creates a sense of trustworthiness between the customer and the insurance provider.
3. Terms and conditions of life insurance
Each and every insurance plan offered by different insurance companies has its own terms and conditions. The life insurance plan that you are interested in operates on the terms and conditions. Before finalising the life insurance plan you want to purchase you must thoroughly go through the terms and conditions of the policy. This will help you in making an informed decision and you can also compare the terms and conditions of other policies. Take Away
4. Availability of riders
Some life insurance offers additional cover apart from the death benefits. The additional covers are known as ‘Riders’. Riders are offered by the insurance company at the time of purchasing the life insurance plans. They can be purchased with the plan with an increase in the premium and they enhance the life cover as well. Some of the common riders offered by the insurance companies are Critical Illness Rider, Accidental Death Benefit Rider, Accidental Total or Permanent Disability Rider and Waiver of Premium Rider. With these optional additional riders being offered you can make better decisions by choosing the best plan and rider offered with it.
5. Cover amount
You should always choose a life insurance plan that lets you choose the cover amount according to your future plans and financial responsibilities. Always make sure your cover amount is equal to your income which will help in providing financial security for you and your family in future.
6. Compare various life insurance plans
This is the most basic and necessary step to be taken before purchasing a life insurance plan. Different life insurance companies offer different plans which have different features and advantages. You can compare several life insurance plans based on your insurance requirements and your budget. Comparison of different life insurance plans can help you in making an informed decision.
With every type of assistance available both online and offline one must make sure he/she chooses the right life insurance plan that will benefit them in future. We must make informed decisions about the type of plan, cover amount, additional coverage, policy term and which insurance provider because investing in the right thing and place is a great matter of concern.