Don’t Buy Insurance Until You Know These 10 Facts

10 Tips to Buy Life Insurance

Investing in an insurance policy is a big risk and a source of peace both at the same time. However, risks are involved in almost everything you do in life. What you should look forward to are positives.

Any insurance policy guarantees your health and well-being, especially during crucial times when money is of the supreme importance to you. Consider a sudden accident, a brief illness leading to hospitalization or an abrupt theft of your precious belongings. How would you cope with them? Buying new stuff? NO! You should simply invest in an insurance policy to ensure that your family doesn’t suffer a financial crisis after your untimely demise.

Here are 10 things you should ensure before you purchase any kind of insurance policy:

1. Review What Kind Of Insurance You Want
Talk to any insurance agent from a reputable insurance company. He or she can help you evaluate your insurance needs and give you information about available policies.

2. Compare Various Insurance Policies
There are two types of life insurance: ‘term insurance’ or ‘cash value insurance’.

  1. Term insurance has lower premiums in the beginning and does not build any kind of surplus. It simply ensures your life in case of any mishap.
  2. Cash value life insurance is for three terms: whole life/universal life/variable life. This type of insurance helps you understand that the cover will be large, but the installment may be one time or large depending on the cover acquired.

3. Decide On Your Maximum Coverage Requirement

If you are certain that after your death your family might face issues in managing final expenses or repaying debts, you should decide on a long policy with easy installments for as long as you can manage to pay them. Buying a satisfactory insurance cover will protect your family from a sudden financial shock during the time of your untimely death.

4. If You Have A Current Insurance Policy Don’t Cancel It

If you have a running policy, keep it alive and don’t cancel or redeem it until you get a new one. This will give you a grace period to switch over to a new policy. We, however, suggest retaining them both if you can, this ensures that you get even more cover than you wanted. More benefits!

5. Take Help Of Insurance Agents In Evaluation

An insurance agent will help you quickly calculate the scalability of your policy. Since some policies have lower premiums at the beginning that keep incrementing as you progress, opt for those. Always compare these policies within a year by year comparison until its maturity.

6. Make sure that you pay all premiums till the maturity period
Nothing will break your heart more than having to forfeit a policy if you cannot pay its premiums. Always go for policies that can be afforded, losing considerable cover and being slapped with a penalty should be the last thing on your mind when you want to secure your benefactors’ future.

7. Read The Offer Document Carefully To Spot Any Loopholes
Read the policy, its rules, maturity promises and other such contingency clauses that might cause hindrances in reimbursement of the cover especially when you are no longer alive. This would be a big inconvenience for your family to run around the insurance office for money that they rightfully own.

8. Review The Policy And Its Growth Every Few Years
If you somehow realize that your family may need to have a larger cover due to the increased standard of living or inflation, you can still upgrade a policy by agreeing to pay larger premiums sooner in order to finish off its premium payments. You can then reinvest the money after it matures in a better policy.

9. Renewal And Its Liabilities
Most insurance covers can be extended for a few terms, but with steep premiums. This can particularly help in case of a life insurance when you live past a certain age specified by the policy. Make sure what those premiums would amount to and if you can manage to pay them.

10. Choose The Right Benefactor
Choose the smartest and most mentally sound person in your family that understands the responsibility that you have taken up in order to make their life better. The last thing you need is to put your family into a future feud which results when your family fights over the cover money, especially if it is insured to go into someone’s hands who tries to use it all on himself\herself.

Invest in an insurance policy. Any insurance policy secures something related to your life and prosperity. Plus, the biggest benefit of any such policy is that it gives you long-term income; way more than what you actually invested in. Nowadays, an investment in a policy of INR 60,000 can fetch you INR 1, 00,000 easily after its maturity. Be carefree and follow the aforementioned pointers in order to get the right policy for yourself.