You never know where life will take you and considering the uncertainties of life, it is important to have life insurance in today’s time. Life insurance is a financial cover for emergency situations which can result in death or disability, either due to natural or accidental causes. A sum is assured in case of life assured’s demise during the term of the policy or if he is disabled because of an accident. Obtaining life insurance is one of the most significant decisions in life, moreover, it is an important tool for financial security, and hence it is imperative to include your family in the decision-making process. Precisely, to be sure that you haven’t gone wrong in making the right decision.
While deciding to buy life insurance, there are several factors you must consider, so that you don’t fall into the trap of fraud. Here are some useful suggestions which need to be considered for maximum benefits.
- Compare Policies
The foremost thing to do is to perform your research about various policies available. Price comparison websites can help you make big savings on your money. Put in some time to get the best out of them. However, remember they’re just showing you prices, not the best product. You don’t have to pick the offers at the top or the policies which are the cheapest, because they might not be the best choice for you.
- Check History of the Insurance Company
It is important to check the history of the company offering the insurance product to be 100 percent sure before you invest your money. You should do your research on the financial background of the company and know its claim settlement ratio. For checking its background, you can either ask a financial expert or inquire from past clients of the company or adopt any other method you think suitable.
- Calculate the Life Cover You Need
The life cover is the policy amount or policy worth, known popularly as sum assured. Experts believe that your sum assured should be 10 to 12 times of your annual income, plus your liabilities, if any. The life cover depends on number of factors like your present and your future income, number of dependents, liabilities and other needs of your family. In case you are buying a term life insurance plan, you can use the term policy calculator to know the premium amount and the desired sum assured.
- Decide the Ideal Tenure of The Policy
It is important to decide the ideal tenure of your policy. Know if your family will be more dependent on you as time passes or if they will become independent with time. Most experts advise calculating the tenure by subtracting your current age from the age of your retirement. Doing this, you will have a secure source of income at your retirement when you need money the most.
- Know Your Rights as a Policyholder
Before signing the policy, clearly understand your rights as a policyholder. Take all the necessary precautions and read the instructions carefully. The pros of understanding the terms and conditions are- if you disagree with any of the clauses, find them unacceptable, or feel that the policy is mis-sold, you can discontinue it, usually within 15 days.
It is important to buy life insurance for a secured future but what’s more important is to choose the right and most suitable life insurance. Choosing the right product will not only guarantee a secured future for your loved ones but also offer you the much-needed peace of mind.