For every individual it is very important to buy a life insurance plan to secure his family before making any other investments. But choosing the best life insurance policy that fits to your needs is equally important. You can find numerous attractive plans these days which are launched by well known institutions. But these two factors- 1.) a well known institution offering a policy at 2.) premium rates, is that all that should entice you to buy it? No, it shouldn’t. There are plenty of other factors as well that should be considered while buying a life insurance policy. There are several questions that you should get answered before buying a policy. Scroll down to find out 9 points which should be kept in mind while buying a life insurance policy.
First of all it is very important for you to understand all the factors which determine your insurance cover, premium and other terms of your policy. For instance, if you are young, lets say 20 to 25 years and plan to buy a life insurance plan then you can get the benefit of taking it at an early age as your age and health are important factors which impact your policy premium. So if you are young and healthy you can get higher cover at affordable rates. As you get older, you get the policies at expensive rates. So when you plan to get an insurance policy it is very important for you to get answers of some questions from your insurance agent which will help you choose the right policy to secure your family.
Points To Keep In Mind Before Buying Life Insurance Policy
Here are those 9 important points which should be consider while buying a life insurance policy.
1. Inquire About The Agent Offering Insurance Product
First and foremost thing is to inquire about the agent before discussing your insurance needs. You have to ensure that the insurance agent offering you insurance products is a licensed agent appointed by the insurance company to offer their products to the customers. Next step is to make sure that the agent understands your requirements and unveils all the insurance options which can suit your needs. Do not share your financial details or documents before verifying license of the agent.
2. Check History Of The Company Offering Insurance Product
It is very important for you to first check the financial history of the company offering life insurance plan. You can get the complete details either from the agent offering the insurance plan or you can check the annual reports of the company. You can also ask financial experts or check from the customers already having insurance plan of the same company through online channel.
3. How Much Insurance Is Needed
It is difficult to estimate the amount of insurance product required by an individual to cater to the needs of their family. To get the right estimate of the amount of the insurance product required by you, it is important for you to discuss your family and financial details with your insurance agent. It will make him understand the need of insurance product.
4. Different Types Of Life Insurance Policies
There are number of life insurance products hitting the market so it becomes difficult for an individual to select a plan which caters to the needs while also being affordable. Some of the most common products available in the market are term life insurance, whole life insurance, universal life insurance and variable universal life insurance. Understanding the difference, benefits, purpose, premium, coverage etc. of all the available plans will help to choose the right plan.
You can either discuss this with your agent or you can also get the details of each plan online. It will help you understand each plan and will also let you compare each plan to pick the best one. Experts always suggest term plan as this is the cheapest form of insurance.
5. Understand All The Aspects Of The Recommended Product By Insurance Agent
Before finalizing the plan it is always good to clarify all the aspects of the insurance plan recommended by the insurance agent. After discussing different plans it may create a confusion in your mind so it is always advisable to understand all the aspects of the shortlisted policy once again to make a wise decision.
Discuss all the benefit, premium, scope of coverage and other expenses of the policy in detail. Like in case of charges, all the insurance companies deduct various charges like administration, surrender, mortality etc. Get the complete information about the policy.
Also, it is recommended to take a stand alone life insurance policy. Clubbing life insurance with investment is not a good choice for any individual.
6. Procedure To Claim The Policy
The prime motive of taking life insurance policy is to make sure that your family should not suffer from financial crises in your absence. So it is very important for you to understand the procedure for claiming the policy. It should not be very time taking and troublesome.
7. At The Time Of Maturity Of the Policy
It is important for an individual to understand what will happen if policy holder wont die during the tenure of the policy.
8. Convertible / Non Convertible Policy
Before buying a life insurance policy it is good to understand the convertibility clause of the policy i.e. is the policy recommended by the agent convertible or not. If yes, then is there any time limit or charges attached to it.
9. Rights Of The Policyholder
Before signing the insurance documents it is very important for you to understand your rights as a policy holder of the company. You must read all the terms and conditions after getting the policy documents so that if you find any of the terms not acceptable, or if you find the policy is mis-sold to you then you can surrender the policy within 15 days.
Also Read: Tax Benefits Of Health Insurance