Why Not To Buy Cheap Life Insurance Plans With Low Premium?
Updated On Apr 26, 2021
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A life insurance plan is one of the best ways to ensure financial security and stability for your loved ones, in your absence. There are a variety of companies that offer several different plans. They each have their own advantages and features, which can make choosing the perfect one, a difficult task.
In such a case, although cheap life insurance with a low premium, may seem like a tempting offer, you must not purchase such a plan. There are several reasons for this.
Why Not To Buy Cheap Life Insurance Plans With Low Premium?
The purchase of a low-premium life insurance plans can result in following drawbacks -
1. Inadequate Coverage
If the life insurance plan is cheap, it probably has minimal coverage and very few to no benefits. There is no advantage in buying such a plan if it will not sufficiently fulfill your needs. Plus, chances are these cheap and basic life insurance plans will rack up a hefty sum when you add riders to them. Therefore, you must carefully assess your needs, circumstances and review the life insurance plan accordingly before making a decision.
Also Read:- Tax Benefits Under Term Insurance Plans in 2021
2. Shorter Policy Tenure
A cheap life insurance plan with a low premium may also give you a shorter policy term. Although this may seem to fulfil your needs, it puts you at a disadvantage. This is because you can save more and pay a lesser premium if the term policy is longer.
Make a wise and judicious choice that will help your family members in times of need instead of getting it just for the sake of buying a life insurance plan. A cheap plan may seem like the easy way out but it will not serve you right in the long run.
3. Limitations on Beneficiaries
Keep in mind how many beneficiaries you will be leaving behind, who will depend on your life insurance death benefit. If you have a large family or financially straining obligations (like ailing members, growing children etc), you will need more cover and sum assured.
A cheap plan might not be sufficient. Therefore, make sure to take into consideration the conditions and number of all your beneficiaries before you purchase a life insurance. A low premium might sound good now but can put everyone at a disadvantage later.
Make An Informed Decision: Always Check Your Insurance Provider
Nowadays, there are a lot of life insurance advertisements all over the internet. Remember to verify and review the insurance company carefully before you invest your money in them.
This is especially valid if you are not going for any of the popular life insurance companies. There might be fraud agents and companies that tempt customers with a low premium and cheap life insurance plans. Be careful to not fall into such traps.
You May Also Like to Read:- Most Popular Types of Life Insurance Policies In India
When Should I Purchase a Term Insurance Plan?
Endnotes
The purchase of a life insurance plan must be carefully thought-out. You must review and consider several aspects before buying a life insurance plan. These will help you get the best cover and plan for your family.
