Buying life insurance is necessary to secure your family’s future financially in your absence. Nevertheless, before selecting a life insurance plan, you must consider several aspects to ensure you have chosen the right policy. It will help you select the most suitable policy per your insurance needs. This article will walk you through the factors you must consider before buying life insurance.
Things to Consider Before Buying Life Insurance
Here are a few factors you must consider before purchasing life insurance in India:
- Know Your Coverage Requirements
One of the initial things you must consider is the coverage you require. Usually, it is recommended that you buy life insurance with coverage of at least 10 to 15 times your annual income.
Opting for sufficient coverage enables your family to pay for their daily expenses, debts and other expenditures in your absence without trouble. You can utilise an online term insurance calculator to get an exact estimation of your life insurance coverage.
- Understand the Type of Policy
Multiple types of life insurance policies are available, each with unique advantages. Consider your insurance requirements and goals to choose the most suitable insurance for your family. For instance, if you want sizable coverage at an affordable premium rate, you can go for the term insurance plan. On the other hand, if you require coverage until age 100, you can opt for the whole life insurance policy.
- Determine the Coverage Tenure
Once you know your coverage requirements and policy type, you must determine the coverage tenure. Although most life insurance plans offer coverage for a specific tenure, a whole life plan covers a lifetime. Hence, going for a plan with a long tenure and affordable premium rate is significant. You can select coverage that will be valid until your retirement.
- Analyse the Additional Features
When you buy life insurance plans in India, you must analyse the additional features the insurer will provide you. Some of the features include accidental death benefit, critical illness, accidental total permanent disabilities, etc. You can customise your plan by adding these riders for extra financial support. You can add these riders to your base policy when buying it.
- Choose the Right Insurance Provider
Many insurance companies offer life insurance plans at affordable premium rates, and you may buy one from them. Nevertheless, buying life insurance solely based on a premium rate must be avoided, as it may not be beneficial and offer you the necessary coverage.
You must compare the insurance companies’ policies with their offerings, benefits, sum insured, claim settlement process, customer reviews and other factors. It will help you select the best-suited option according to your insurance requirements and financial goals.
- Understand the Claim Settlement Process
One of the crucial factors to consider when buying a life insurance plan is the claim settlement process. In case of your sudden death as the sole breadwinner of your family, your family will have to bear the emotional and financial turmoil. An easy and quick claim settlement process will reduce your family’s stress in such a scenario.
You must consider the company’s claim settlement ratio to understand how many claims they have settled successfully against the claim received.
Final Word
Overall, buying a life insurance plan in India can be overwhelming. However, if you understand your insurance requirements and conduct proper research on the insurers, you will find the most suitable plan according to your requirements. You must also review the insurer’s terms and conditions, list of inclusions and exclusions, etc., to avoid hassle later on.
Also Read: Used Versus New Commercial Vehicles: What Should Your Business Invest In
