There are several ways to increase family wealth through savings and investment schemes. But when a family has only one person to rely on for all the expenses, the burden increases. Sometimes, such burdens prevent people from investing in other modes of asset accumulation. In such a case, they can always take the help of life insurance.
Life insurance is quite useful as it can financially protect a family during adverse incidents. Sole breadwinners often buy life insurance policies to protect their families from debt even after their demise. You can also take the help of life insurance if you find yourself in a similar situation. Or you could also buy a life insurance policy for its investment benefits.
Prerequisites To a Good Life Insurance Plan
Before investing in a life insurance policy, you must keep a few things ready. You can easily find good life insurance with the help of these points. Verifying these details in your selection process is important as their oversight can cause difficulties for you in the future. The given below are the things that you must know before buying life insurance:
Insured Sum
Affordable Premium Payment Capacity
Required Extra Coverages
Suitable Premium Interval
Necessity of Riders
Required Policy Term
Life Insurance Policy Selection
The next step in purchasing good life insurance is getting life insurance quotes. But it can be troublesome because of the huge number of insurance providers in India. These quotes have the complete details of the policy along with the premium amount and applicable taxes. You can get reliable life insurance quotes from two major sources, an authorised insurance agent or a life insurance calculator.
But before going forward with the selection, you must choose one from the major life insurance companies. According to IRDA, there are 24 registered life insurers in India as of December 2021. So always select one from those.
If you have any preferred life insurance provider, you can continue with them. And if not, you can go to a multi-company insurance agent or use any insurance calculator. These sources can give your life insurance quotes from several different companies.
Authorised Insurance Agent
You can find an authorised insurance agent at your preferred insurance agency in your location. And if there are no authorised insurance agents in your area, you could schedule a telephonic call with an agent. You can share your life insurance requirement and personal details, and they will provide you with information regarding policies that meet your necessities.
Life Insurance Calculator
A life insurance calculator is a more advanced and easy method to find a suitable insurance policy. Every insurance provider has a life insurance calculator on their website.
Such calculators require some inputs and personal details to function. They use all those details to cross-verify the different available plans and their respective premium amounts.
Most insurance calculators use similar layouts in their calculators. The following are some of the common steps to follow in a calculator, so you may select the life insurance plan that is most suitable:
Step 1: Input name, gender, age, and income range.
Step 2: Input whether you are a nicotine/tobacco user.
Step 3: Input required Assured Sum.
Step 4: Select preferred policy term duration.
Step 5: Select preferred payment intervals.
Step 6: Select preferred add-ons.
Step 7: Input rider details if you wish to add anyone to the policy.
Step 8: Click on calculate.
The calculator will now provide you with the premium amount based on your selections. You can choose any suitable life insurance plan from the results. Or, if you are not satisfied with any of the policies, you can always modify the inputs. After a few trials, you will get a suitable insurance policy.
Things to Look Out For in a Life insurance Policy
As the insurance selection depends on your inputs, you won’t have any troubles with those earlier mentioned prerequisite points. After selecting a life insurance plan, verify some extra details before purchasing. You can get the information from the life insurance quotes or the terms and conditions page. Here are the following pointers you need to consider:
Restrictions: Always verify if the insurance policy has any restrictions on coverages or payments. Such restrictions always adversely affect the insured person and family. So, make sure there is no unnecessary restriction in the insurance scheme.
Hidden charges: Hidden charges will always increase the burden and duration of claim approval. These hidden charges include maintenance fees, administration fees, surrender charges, renewal charges, etc. You must verify that the policy has no hidden charges.
Lock-in period: Ensure that your insurance policy has an adequately long lock-in period. The Lock-in period has a grace period in the initial days of the new policy. If the policy buyer is not happy with the terms and conditions of the policy, they can cancel it. And if the cancellation is within the lock-in period, the insurance company must pay back the entire payment made.
Purchase: After verifying all these parameters, you can go ahead with purchasing the life insurance policy. Purchasing will require document submission, health check-ups, verification, and payment. After all those formalities are over, the insurance provider will mail you the policy papers.