In this world full of uncertainties, you have to be certain about safeguarding your loved ones. For the feeling that even in the worst-case situation, your family will be financially secure. And, you can secure their future effectively when you make a wise and informed policy-buying decision.
With a myriad of insurance companies and hundreds of policies available, deciding the correct plan and the amount of cover you require may seem a little confusing. If you are facing a dilemma about which policy is right for you, the following tips will come in handy.
Assessment Is the Key
Make a careful assessment of your requirements. It is critical to understand the type of policy you desire. If your primary goal is to protect your family’s financial security, you should look into purchasing a comprehensive insurance plan at a fair price.
Consider investing in a unit-linked insurance plan (ULIP) if you wish to save money for your child’s education or to purchase your dream home. You can also start a pension account, which will give you a regular income stream once you retire.
Reviewing Your Cover
It is essential to assess your insurance cover at various stages of your life. As a basic principle of financial planning, one should purchase life insurance to cover all his financial liabilities. The cover should be large enough to pay off any outstanding loans, pay for big-ticket expenses and also generate adequate income to meet the families living expenditure without compromising on their standard of living.
If you have a home loan, make sure you get a term insurance policy for the same amount. They say, a wise man saves for a rainy day. But a wiser man saves to ensure that his savings reach the desired recipients as intended by him if he were still alive. A term insurance policy can cover all your equated monthly installments (EMIs) and other financial obligations, even in your absence.
Compare Your Plans
It is critical to explore all of your options before selecting which insurance to purchase. Today’s life insurance market provides a wide range of solutions at several price points, allowing you to customize coverage to meet your unique requirements. While it is important to purchase an insurance plan that fulfils your demands, it’s also pertinent that it fits your budget.
Compare several plans to identify the one that offers the most coverage for the amount of premium you pay. Before you consider the plan’s pricing, evaluate the plan’s benefits. Examine your premium-paying term based on your expected income for the coming years. It is a good idea to start with a low-cost insurance policy to ensure that you’re completely covered at an affordable premium. Over time, you can review your plan and adjust your coverage as your income, family size, and needs change.
Carefully Examine the Claim Procedure
One of the main objectives of purchasing insurance is to receive instant financial aid in the event of an accident. During an emergency, the last thing you want to do is go through a complicated procedure to recover your losses. So, it is crucial that you pick a policy that has a simple and speedy claim process.
Before purchasing a policy, review all documentation, such as the policy brochure or the prospectus. It is critical to understand what the policy covers and what it doesn’t. Make certain you entirely comprehend the terms and conditions of a claim settlement.
Comprehend the Terms and Conditions
It is vital to understand all of the terms and conditions in order to get value for the money you spend on your insurance and to avoid any legal issues when filing a claim. You must examine the terms and conditions carefully and determine if they are favourable and meet your requirements.
Find out important information such as the lock-in time and the circ*mstances in which the claim will be rejected.
Is Group Cover Sufficient?
Some individuals don’t buy insurance because they are covered by their employer’s group plan, benefitting immediate family members. Although group term insurance cover is a valuable benefit, they are usually not sufficient.
Depending upon your job, your coverage is of a restricted amount and may not fulfil all your prerequisites. Hence, subscribing for an individual plan will be the most effective alternative to eliminate any risk.
Things Your Agent Won’t Tell You
Purchasing a life insurance policy is a long-term commitment. Be sure about what you are doing. Don’t put your faith in your insurance agent blindly, since there are various things he or she will not tell you.
For instance, your claim against theft will get rejected if the house was unoccupied for more than 30 days at a stretch or if your househelp was implicated in the burglary. Or that your policy will not fully cover you if the first 5% of the assured sum or INR 10,000 of each claim, is not paid by the company. Therefore it is important to ask questions, do your research and leverage the information on the internet.
Bottom Line
Buying an insurance policy is not as difficult as it may appear. Following the tips outlined above can immensely assist you in choosing the best plan for you. However, these are just a few suggestions for making the most of your money once you have achieved financial stability.
Remember to keep in mind your long-term goals and how much risk you are willing to take, while evaluating any of these options. Keeping these two simple fundamentals in mind, you are sure to discover your path to financial success and happiness.
