Important tips for buying a life insurance policy

Introduction

Life insurance has many benefits. Today, life insurance it is not just a contract between the insurer and the insured, which provides protection against life risk through the payment of a premium. For sustainability in the market, each company and product must adopt current demand and circumstances, and the same goes for life insurance products. In these years of changes in the market, regulators and life insurance companies have taken important steps to meet the changing demands that have provided clients with the following options and benefits: –

• Wide range of product portfolio

• Savings and investment options

• Additional benefits with life insurance

• Different ways to get a low premium and high coverage

• Additions to the list of key features of life insurance policies

• Transparency and uncomplicated procedure

With a group of different companies, products, and benefits to choose from, you need to choose the best one for yourself. There are many things that you should take into account before buying insurance and there is no specific guideline to choose the best one, it all depends on your need and situation. But there are some important points related to each policy that can help you filter the best insurance policies. Based on those important points, we have outlined the following important tips for buying a life insurance policy.

Advice

• Start early

Buying life insurance when you are young gives you many benefits. You will be able to get high coverage at a very low premium rate because age has a direct effect on the premium rate (the younger the buyer, the lower the premium). Plus, with a low premium, you’ll get better financial planning, long-term coverage, and your premium will lock in at a very low rate for the entire term of your policy.

• Choose the right amount of coverage

Don’t decide on your policy coverage based on your feelings or calculations based on unique factors (such as 10 times your salary). When deciding the amount of coverage, always take into account your current lifestyle, debts, assets, future obligations (children’s college education, settlement of your family in different places, etc.) and the inflation rate. Choosing low coverage will not give you any benefit, while choosing high coverage will be an expensive deal for you.

• Comparison is the key

Comparison is very necessary before buying an insurance policy. It helps you choose the best policy at the best price. There will be many sources that will not offer the benefits you are looking for and may be available at different rates. There are many IRDAI certified comparison portals that provide unbiased and easy comparison of different policies on their websites.

• Choose the right policy

Different policies have different benefits, eligibility criteria, terms and conditions, exclusions and inclusions. You can choose the right policy for you only if you know it well. So the key to choosing the right product is to understand it better. Learn about available riders, fringe benefits, what is not covered by your policy, premium rates, and all other things related to your policy. Know your needs well and then find the corresponding policies.

• Choose the right company

There are more than 20 companies in India and it is very necessary to choose a reputable company. There are some companies that offer the best insurance policies and they are also reliable. You should check the claims settlement rate, review (by customer and experts), claims settlement process, product portfolio, price, etc. from different companies to choose the right one.

• Understand the brochure

There is a brochure available with each life insurance product that is available on the company’s website. Contains all key policy-related benefits, features, eligibility, inclusions, exclusions, term, and condition. Go over each fine line in the brochure to get a good understanding of your policy. It will help you use the benefits available and avoid unpleasant surprises in the future.

• Disclose your information correctly in the proposal form

Some people hide data about themselves while filling in the proposal form and providing personal data to the company. For example, some people flag themselves as non-smokers while giving details for low premium rates. But later in the claims stage, it could result in no benefit as the claim will be rejected due to misleading information provided by the insured. The company cannot be deceived by giving incorrect information. Therefore, to avoid inconvenience during the policy or when making claims, it is always necessary to provide the correct information about yourself to the company.

Never buy a life insurance policy in a rush because it is a decision that will affect your entire life. Take some time to do your research and understand your needs well because a precisely purchased policy gives you exactly what you want.