Many worries automatically go away when you have life insurance. Especially those related to money. You can secure the financial future of your family in a very small amount and save them from being helpless in your absence. By following some things, you can make a good plan and also avoid mistakes like fraud and mis-selling.
Many worries automatically go away when you have life insurance. Especially, those related to money. You can secure the financial future of your family with a very small amount, saving 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.
Keep in mind the current lifestyle of your family and how it may change in the future. The value of the insurance should be at least 20 times your annual expenses.
Consider the Key Features Document (KFD)
Key features document must be read before purchasing life insurance. From this you can get many important information about insurance. For example, there is a free-look period of 15 days from the date of issue of the insurance policy.
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. In this, the entire amount is returned to you after deducting some charges.
Tell your close ones about your policy
After purchasing a life insurance policy, definitely inform 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 both digitally and in paper form. With this, in case of any mistake, a formatted document will be safe with you. Also, it will 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 absolutely serious accidents. The younger the age at which it is taken, the lower 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 combination of insurance and investment. But, while buying them, one has to weigh the pros and cons because their returns are not fixed.
Ask these questions before taking insurance
- Ask the company under which circumstances the insurance amount will be paid and under which it will not.
- Some companies also provide loan protection cover to meet the children’s education expenses after the death of the insured. Find out by 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 you ever need to. If yes, then up to what limit?
- 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.
