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Life Insurance – Important Considerations

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We consider so many things before buying our dream house. Wouldn’t you want a house which has hospitals, schools, colleges, multiplexes etc. nearby? A Sea view house would be an added advantage, isn’t it? However we all strive for something better and would consider a lot of things before starting something new, whether it is finding a new job, finding a life partner for marriage, etc. Life is so much easier to find something, when we have some information about the subject in hand and that’s exactly the case with Life Insurance policies!

It is very essential to consider few things before buying Life Insurance policy like…

  • Comparing quotes of different insurers

Comparing is the very first thing you must do before finalizing a Life Insurance policy. This will make you taper your search as per your requirement once you compare the quotes, features, exclusions, etc. It is also found that comparing quotes online will be easier as well as cheaper in comparison to offline quotes in the market.

  • Analyzing your coverage

The coverage of your Life Insurance will definitely depend on factors like your income, financial liabilities, health conditions, inflation, etc. Thus it plays a vital role in fixing up your Life cover.

  • Ensuring that you are financially capable in delivering timely payments

It is very important that you judge yourself before choosing a life insurance plan and the premium against it. However in case if you miss paying timely payments the policy could lapse.

  • Reviewing your Life insurance requirements timely

Time changes, and so does your personal and financial status with respect to marriage, addition to your family, job change etc.  Thus, keeping these things in mind will also help in getting a better life insurance policy for you.

  • Reading your policy carefully

Most of the people miss their part on reading the policy documents carefully, which can lead them to stress during an unfortunate event while filing a claim. What if the cause of the death was in the exclusion list of the policy holder? In this case, the beneficiary would be at a double state of shock both emotionally as well as financially.

  • Avoid buying unnecessary riders

Life Insurance riders are as good as your prepaid mobile schemes, where you can just top up your plans at cheaper costs. If you increase your basic Life Insurance coverage, you might rather choose riders, which are available at a much cheaper cost as compared to a policy with larger coverage.

What Are My Options For Life Insurance Plans? 

As per trends we are loaded with a variety of Life Insurance plans required at every stage in life which are easily available in the market today. Anyone can opt for a Life insurance; however always remember the earlier the better.

  • Term Insurance policy

This is one of the simplest, most affordable and traditional types of life insurance plans as compared to other life insurance plans, for obvious reasons like,

  1. a) Provides life cover and will protect your family financially when you are gone.
    b) The payout/ death benefit to the nominee/ beneficiary is tax free.
  2. c) Doesn’t offer any survival or maturity benefit
  • Pension Plans

Pension plans will not only save money for your life post retirement, but will also push you for a disciplined saving habit. By paying regular premiums for a certain period of time, you get timely income to enjoy your happy retired life.

  • Endowment plans

Endowment plans offer both insurance as well as investment benefits. Some part of the endowment plan will be allocated to   wards the life cover and some will be invested by the insurance company. In an endowment plan, the insurance company also declares bonuses periodically.

  • Unit Linked Plans (ULIP)

In this type of Life insurance, certain period of premium is paid towards the life cover, whereas the balance is invested in equities and debts as per your choice and risks need.

  • Child plans

In a Child plan, a lump sum amount equal to the sum assured is paid on the death of the parent. The policy in this case will continue till the end of the policy term with all future premiums waived off. This plan will ensure that your child’s needs are taken care even if you are not around.

  • Money back insurance

With Money back insurance, a periodic payment is made to the insured if he/ she is alive as a survival benefit. However on death of the insured, the insurance company pays the entire sum assured along with the survival benefit.

Conclusion

Thus, considering few factors before buying a Life Insurance policy will take you a step closer towards a tailor made policy for you.