How To Choose And Buy The Best Life Insurance Policy?
Updated On Jul 04, 2021
A life insurance policy is a contract between the insurance company and the policyholder. The insurer pays the policyholder a sum assured in case of the death of the life assured or on the maturity of a policy on the promise of paying premiums as per the contract. The policyholder also has the liberty to choose from many riders. Riders are the optional paid features available in life insurance.
A life insurance policy provides financial security to the family. It acts as an income replacement in case life assured dies during the policy term. It helps in paying off debts. It also secures life after retirement. It helps you to meet long term and short term financial goals and last but not the least facilitates in children's education.
Tips to Choose the Best Life Insurance Policy
To come up with the best life insurance plan, it is crucial to understand your financial needs and also, the main objective of buying a life insurance policy:
- Assess your financial needs - long-term and short-term goals.
- Depending on the number of financial dependents you have, you need to figure out the life insurance coverage.
- If you are buying a life insurance plan only to provide financial security to your family, it is advisable to opt for a term insurance plan for a high sum assured at a low cost.
- To buy the right type of insurance, you must compare life insurance policies online.
- Compare insurance plans in detail, check plan's inclusions and exclusions, and premiums charged by various insurance companies.
- Opt for a life insurance rider, only if you need it.
- Compare plans, some insurance companies do offer riders as an in-built feature of a plan. You can save money on that by comparing life insurance policies online.
- Seek experts’ advice if you are confused, before you buy.
- Choose how you will pay the premium: Regular(annually, monthly, quarterly), Limited Payment Term, or Single Payment. It is suggested to pay a premium annually.
- Choose the right way of payout: Lump sum, equal installment over a period, or a combination of both. Depending on your financial needs at various life stages and also, on the financial knowledge of the nominee, you can select the payout option as suitable.
The above factors will help you in choosing the best life insurance policy. Securing your loved ones financially with life insurance 6is the best way to avoid all the hardships they will go through in your absence. It is advisable to read this article fully and carefully to make an informed decision.
Also read - Is It Good to Buy a Term Insurance Plan in 2021?
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.