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Many worries automatically go away when you have life insurance. Especially, those related to money. You can secure your family's financial future with a very small amount, keeping them from being helpless in your absence. But, for this you have to choose a good life insurance plan.
There are dozens of insurance companies in the country. There are countless life insurance products. In such a situation, it becomes difficult for people to decide which life insurance plan they should take. We are telling you some things, by following which you can make the right plan and also avoid mistakes like fraud and mis-selling.
Why do you need life insurance?
Before buying a life insurance policy you should decide why you need it. Only after this you will be able to choose the right policy as per your convenience. Decide how much insurance you need based on your expenses.
Take into account your family's current lifestyle and how it may change in the future. The value of insurance should be at least 20 times your annual expenses.
Consider the Key Attribute Document (KFD).
Key feature document must be read before purchasing life insurance. From this you can get many important information about insurance. For example, an insurance policy has a free-look period of 15 days from the date of issue.
If within these 15 days you feel that the insurance is not suitable for your needs or the policy has been sold to you by giving wrong information, then you can get it cancelled. After deducting some charges, the entire amount is returned to you.
After purchasing a life insurance policy, definitely tell your family members, relatives and close friends about it. In such a situation, if any untoward incident happens, your family members will be able to claim the insurance in your absence and they will be able to get its benefits.
All documents related to insurance should be stored digitally and in paper form. With this, in case of any mistake, the formatted document will be safe with you. Besides, it will also be easily available when needed.
Which insurance product to buy?
Generally, people take term insurance, traditional plans and unit-linked insurance plans (ULIPs) the most. Term insurance is taken keeping in mind serious accidents. The younger the age at which it is taken, the lower will be the premium.
Whereas traditional plans may be guaranteed without bonus or with a bonus declared every year. Talking about Unit Linked Plan, you can call it a mixture of insurance and investment. But, while buying them one has to consider the advantages and disadvantages because their returns are not fixed.
Ask these questions before taking insurance
– Ask the company under what circumstances the sum assured will be paid and under what circumstances it will not.
-Some companies also provide loan protection cover to meet the education expenses of children after the death of the insured. Know how much the premium will increase to get these covers.
Ask the agent if the insurance company will allow you to increase your coverage if needed. If yes, to what extent?
– Be sure to check the claim settlement ratio of the company and compare it with other companies. This information is available on the company's website.