A life insurance policy is a crucial investment aspect that should be carried out with proper research. For this, there are many tools available, like a life insurance premium calculator, that can help you make this daunting task easier. Despite various tools available to ease the process, it can still be an extremely exhausting task to choose a reliable life insurance cover, especially when you have a slew of options available at your disposal.
Life Insurance Premium
Although life insurance is a very basic form of investment, there are certain things that you should know before choosing a policy to make the most out of it. Moreover, as your family’s sustainability after your demise depends on it, you should definitely consider learning about such aspects.
A wise decision backed by adequate research will surely ensure that your family lives a comfortable lifestyle without any financial depreciation in the event of your death. When picking a life insurance policy for the first time, make sure you keep five core principles in mind, as stated below.
1. Know Your Requirements
To determine whether you actually need an insurance policy or not, you first have to consider your part in your family’s overall income and determine how much they’re dependent on you. Additionally, if you have any sources that will help your family meet their daily expenses in the event of your unfortunate demise, you should also keep them in mind.
You can easily determine an ideal coverage value that your family requires to live comfortably, depending on the aforementioned parameters. You can also consult a financial advisor to pick preferable insurance plans as per your requirements. Coupling the process with a life insurance premium calculator tool will also allow you to assess the required premiums.
2. Compare Multiple Quotes
When it comes to life insurance plans, there are two major types involved – savings-cum-protection plans and term plans. While the latter only provides indemnity against unfortunate events like your death, the former also allows you to accumulate a savings corpus for your future along with the death benefit involved.
If you survive till the end of a term insurance’s tenure, you won’t receive any benefits. On the other hand, a savings-cum-protection plan provides a maturity benefit that includes monetary benefits of sum assured and bonus additions. Based on your future needs and financial capabilities, you can choose either of these plans.
3. Choose an Affordable Cover
Once you’ve properly assessed your insurance needs and chosen a preferable plan, the next thing you have to do is determine the cost of annual premiums that you’ll incur with the policy. Before purchasing a policy, you should use a life insurance calculator to know whether you can afford to pay the premiums against the benefits of your policy or not.
If you have several dependents in your family, your insurance needs are higher, and a savings-cum-protection plan doesn’t match your needs. A term plan instead will be more suitable as it’s cheaper and requires lower premiums than other plans. If you believe that you can afford regular premiums, you can consider going for a savings-cum-protection plan instead.
4. Evaluate Your Policy’s Future
It’s always a good idea to consult your insurance agent about the various aspects of your policy, including the exclusions and events not covered under your policy. Before purchasing a policy, it’s crucial to know about these things to prevent your dependents from encountering a shocking situation in your absence, especially if they’re going through their worst times.
Moreover, knowing the ins and outs of your preferred policy also helps your dependents in making claims easily. As they would be aware of the inclusions and exclusions of the policy, they’ll be able to know the benefits they’re eligible for and make the most out of your policy, provided that you informed them about everything beforehand.
5. Check the Claim Settlement Ratio
It’s a no-brainer that you’re purchasing a life insurance policy to sustain a proper lifestyle for your family in the event of your unforeseen demise in the form of benefits and rebates. With that said, you should certainly consider checking the claim settlement ratio of your chosen insurance company. It’s an evaluation that highlights the percentage of claims approved by an insurer in a year.
To check the claim settlement ratio of a company, you don’t have to perform any extensive research. It’s a very easy evaluation that can be gathered straight from IRDAI’s website. Moreover, if you witness any rejected claims, you should consider checking the reason behind the rejection as many policyholders attempt to make false claims.
Why Is Life Insurance So Important?
Almost everyone knows what purpose a life insurance server is. Yet, many people still choose to ignore what could explain next if you die suddenly without any financial support for your family. The consequences can be highly devastating for your family and may leave them with a large financial burden and make them unable to pay your existing mortgages.
Moreover, you may think that the insurance provided by your employer is sufficient, but the harsh reality is that it simply isn’t enough to safeguard your family’s future. A life insurance policy can help your dependents pay off debts such as mortgages, car loans, or even your burial expenses that could otherwise have a significant financial impact on your family.
You can also save for major milestones of your life, like your child’s further education or buying a home. Furthermore, it always ensures peace of mind that your family is secure no matter what.
Bottom Line
If you want to safeguard your family’s future in the event of your unfortunate demise, you must purchase a life insurance policy and cover yourself against any risks associated with life. It’s one of the most crucial financial investments of your life, which signifies why you must conduct proper research before proceeding. Make sure you keep the aforementioned things in mind to choose a policy that fulfils all your requirements.