Money Guide: We all do financial planning in our own way to meet future needs. There are many tools of financial planning available in the market, one of the important tools is life insurance policy.Â
Life insurance policy plays the most important role in meeting long term financial goals. Life insurance not only covers the risk of your life but also plays an important role in saving for future needs.
How to choose the right insurance policy
Experts in the insurance sector say that before taking a life insurance policy, the borrower should first assess his needs. The policy should be selected considering the future requirements. Life insurance cover should be taken considering the return on maturity of the policy and the risk cover of the policy. It is very important to understand that choose different financial instruments for small and large needs. Always take a life insurance policy to meet long term needs.
 Review insurance from time to time
Life insurance covers the risk of your life and meets your long term financial needs. You choose different policies to meet your children’s education and financial needs after retirement. Even after taking the policy, it should be reviewed from time to time because your needs keep changing from time to time. If your child is small, then you should invest in a child insurance plan.
Helpful in financial planning
Life insurance policies are designed in such a way that it gives maximum benefits to the policy holder. It is generally seen that due to lack of proper information, the policy holder wants to get the maximum benefit from the life insurance policy only after five years. Discipline is very important in investing.
When you make regular investments, you reach your financial goals easily. This rule also applies in life insurance. The premium for life insurance policy should be paid on time. Non-payment of premiums for the policy can lead to lapsing of the policy and with it the risk cover also ends. This can make it difficult for you to reach your financial goals.
Avail Riders
Riders give you additional benefits on a life insurance policy. For example, you have a traditional insurance plan and you want to get double accidental death benefit with it, then you can choose Accidental Death and Dismemberment rider. However, for this you will have to pay additional premium. Keep in mind that the freedom to choose riders is only for the first few years of taking the policy, but some insurance companies provide this service later as well. Riders are an easy way to take more financial risk at a lower cost.
