In our previous post ” why you need to buy life insurance now”, we talked about why you have to purchase the right life policy that will suit both your needs and your budget.
Well, here is a guide to help you select the right policy that suits all your needs.
HOW CAN YOU CHOOSE THE BEST LIFE INSURANCE PLAN:
1. LIST OUT YOUR LIFE INSURANCE GOALS:
Everyone has different goals and you must plan for your life insurance goals with the help of a suitable life insurance policy. The best way to know what your goals are is by listing them out and doing a keen assessment on the pros and cons of life insurance on them.
Questions like; WHAT KIND OF INSURANCE WILL BEST SUIT MY NEEDS AND BUDGET must be asked.
If you are looking to save for your child’s education or thinking of buying a dream house for yourself, you can consider investing in a unit linked insurance plan. You can also buy a retirement plan which will ensure regular income for your everyday expenses post-retirement.
2. KNOW HOW MUCH INSURANCE OPTIMAL COVER THAT YOU WILL NEED.
Some financial advisors say that your life insurance coverage should be 10-15 times bigger your income. There are so many things to consider when you are deciding the kind of insurance to subscribe to. If you are paying off debt, the monthly installments may be too high for your family to make in your absence.
As a result of inflation, your family might also find it hard to manage the compensation. •Therefore you need to be aware of Your family’s annual expenses multiplied by the number of years for which income replacement might be necessary.
•The total amount of your outstanding debts and the cost of repaying mortgages if any. Then you deduct the sum of your liquid assets to arrive at an adequate life insurance plan.
3. SELECT THE CORRECT POLICY TERM
This term is ideally the number of years your family will be dependent on you after your demise. To get the actual number of years, subtract your current age from the age you expect your income to stop or accomplish a goal.
4. OPT FOR A KNOWN AND REPUTABLE LIFE INSURANCE PROVIDER.
Life insurance companies with a Claim Settlement Ratio (CSR) of over 95% for consecutive years are generally considered reliable. The CSR is the percentage of claims that the company has settled in a financial year compared to the number of claims placed. You can visit the Insurance Regulatory and Development Authority (IRDAI) website to view the updated CSR of different insurance providers in India. It is also advisable to read customer reviews and understand whether your life insurer’s claim service is fast and hassle-free.
5. READ AND UNDERSTAND THE FINANCIAL POLICY DOCUMENT CAREFULLY.
Understanding all the policies involved in the financial journey you are going to be part of is a very important part of insuring you choose the best policy to suit your needs. Find out relevant details such as the lock-in period and the circumstances in which the claim will not be valid.
6. ASSESS YOUR LIFE INSURANCE NEEDS CONSISTENTLY.
It is important to assess your life insurance needs often as they could change at any moment in time. When you review your life insurance needs, you can adjust your cover appropriately.
7. BUY LIFE INSURANCE AT AN EARLY AGE.
Life insurance premiums are lower and better when you are younger. You can quickly save your premium because there is still enough strength and life in you. You can increase your coverage as life goes on.
You need life insurance for as long as you live. A permanent policy pays a death benefit whether you die tomorrow or live to be over 100.