Five Important Tips to Consider When Buying a Life Insurance Policy

Having a life insurancei cover is a necessityi for all. It givesi you the financial cushioni in the event ofi any unfortunate incident. Whilei life insurance is necessary,i not many people knowi what to look fori while buying a policy.i This article gives youi important tips on thingsi that are a musti know when you buyi a life insurance policy.

  

Wheni it comes to buyingi a life insurance policyi for your family, youi would surely want toi buy the best policyi to ensure maximum protectioni for your loved ones.i However, considering the facti that there are myriadi of policies and insurancei providers in the market,i choosing the right onei can be an overwhelmingi task, especially if youi are first time buyer.i There are many thingsi to consider, right fromi how much coverage youi need to the benefitsi of different insurance policies.i To help you makei your insurance buying decisioni easy, you can consideri the following tips:

  

Assess Youri Needs

  

Before you start lookingi for the best lifei insurance policy for youri family, it is paramounti that you take ai step and assess youri needs first. Determine youri financial contribution to thei family - Is therei any other source thati your family can relyi on to meet theiri expenses and pay thei debts in the eventi of your untimely death?i How many people arei dependent on you? Knowingi answers to these questionsi will help you knowi how much coverage youi need and you wouldi be in a betteri position to buy thei right cover that willi provide your family enoughi financial protection even afteri your death.

  

Compare Policies

  

There arei basically two types ofi life insurance policies –i savings-cum-protection insurance and termi policies. So, when youi buy life insurance, makei sure that you understandi the difference between theiri features and the benefitsi offered.

  

A Term insurance policyi is cheap; you cani buy a large coveri for a smaller premium.i However, you must knowi that the insurance companiesi do not pay anythingi if the policy holdersi outlive their term lifei insurance policy duration. Thei term insurance only providesi financial security against eventsi that would be otherwisei distressing to the policyi holders’ family because ofi their untimely death. Thei savings-cum-protection life insurance policy,i on the other hand,i provides a maturity benefit,i which includes the sumi assured and the bonus.

  

Buyi an Affordable Cover

  

After thoroughlyi assessing the different policies,i you must determine howi much can you affordi to pay towards thei insurance premium. If youi need a large insurancei cover, it would makei sense to buy ai term insurance policy. Thei premium for term insurancei is much cheaper thani savings-cum-protection insurance plans andi you would be ablei to afford the premium.i You can opt toi buy a savings-cum-protection lifei insurance policy subsequently asi your financial condition improvesi and you think youi can afford to payi high premium.

  

Assess the Futurei of your Insurance Cover

  

Wheni you buy life insurancei policy, it is advisablei that you take helpi of an insurance agenti to understand the fineri details of the policiesi like the exclusions –i the events that thei policy does not cover.i Knowing this would bei critical to make ani informed decision and preventi your family from shocki at the time ofi making the claim.

  

Know Abouti the Claim Settlement Historyi of the Insurer

  

You buyi an insurance policy soi that in the eventi of any casualty ini the future, the insurancei company will pay thei promised benefits. It isi therefore paramount that youi do a background researchi about the claim settlementi history of the insurer.i You can easily geti this information online oni the insurance company’s websitei or you can checki the Insurance Regulatory andi Development Authority of Indiai (IRDAI) website for thei related information.