What Questions Should I Ask About Life Insurance?
Updated On Nov 17, 2021
Table of Contents
- What Questions Should I Ask about Life Insurance?
- 1. How much does the life insurance plan cost?
- 2. Is there any waiting period under the plan?
- 3. What is paid as death benefit under the plan?
- 4. Does the life insurance plan pay anything if I survive till the term?
- 5. What is the premium payment term of the plan?
- 6. When will the plan start providing the benefits?
- 7. What are the exclusions under the plan?
- 8. What happens if I fail to pay the premium on time?
Life insurance is an important financial instrument which helps an individual keep their family financially secure in case they pass away in an unfortunate event. However, sometimes, due to lack of knowledge, individuals fail to ask the questions about life insurance which they should have asked at the time of purchasing it.
This could be detrimental in two ways. Firstly, it will not allow the individual to make an informed decision. Secondly, it might result in the purchase of a non-suitable plan, as the life insurance requirements of every individual is different. Thus, it is imperative to know what questions you should ask at the time of buying a life insurance policy.
What Questions Should I Ask about Life Insurance?
Below, we have listed the answer to the popular query of ‘what questions should I ask about life insurance?’ to help you plan the financial welfare of your loved ones in an informed manner -
1. How much does the life insurance plan cost?
The cost of the life insurance plan is called the premium, which is payable as per the chosen premium payment mode. Thus, it is crucial to understand how much you would be paying as the premium and at what frequency.
2. Is there any waiting period under the plan?
Waiting period refers to the time interval during which you need to wait for the plan benefits to become payable. A waiting period begins from the date of policy inception and generally lasts 30 days. You must check if your plan features a waiting period or not, as during it no benefits are payable.
3. What is paid as death benefit under the plan?
Death benefit refers to the sum of money which is paid to the nominee in case of an unfortunate death of the life assured. You must check the amount of death benefit before buying a life insurance plan to ascertain if the benefit will help in maintaining the financial stability of the nominee or not.
4. Does the life insurance plan pay anything if I survive till the term?
Most of the life insurance plans pay a maturity benefit in case the life assured survives till the date of plan maturity. However, some plans do not offer these survival benefits. Thus, you must check if the chosen life insurance plan provides anything in case of successful survival or not.
5. What is the premium payment term of the plan?
The premium payment term refers to the time duration during which the life assured is required to pay the premiums to keep the plan valid. You must check if the length of the premium payment term matches your financial convenience or not.
6. When will the plan start providing the benefits?
A life insurance plan may provide different benefits at different times. For example, the Future Generali New Assured Wealth Plan provides guaranteed additions to the sum assured from the 8th policy year till the end of the policy term. Whereas, the Future Generali Assured Income Plan provides an additional income benefit with the last payout under the plan. Thus, you must know when the different benefits are payable.
7. What are the exclusions under the plan?
Exclusions refer to the instances under which benefits are not payable under the plan. You must check the exclusions of a plan before purchasing it so that you do not land up in an unfavourable situation in the future.
8. What happens if I fail to pay the premium on time?
In an unfortunate event, it may happen that you miss out on paying the premiums of the plan, causing a policy lapse. Generally, life insurance plans offer a grace period during which you can pay the missed premium and keep your policy active.
Some plans also offer a paid-up facility, under which your plan gets converted into a paid-up policy on non-payment of premiums, and you remain eligible to receive benefits proportional to the number of paid premiums. You must check if such benefits are available under the plan or not.
You may also like to read - Reasons For Why Would a Life Insurance Claim Be Rejected
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.