Buying a life insurance policy can seem to be a daunting task, especially if you are a first-time insurance buyer. However, if you know a few simple tips about what to expect, the process becomes easier. Read on to know more about important tips to consider while looking for a life insurance policy.
Buying a life insurance policy for your family is an important decision as it has a direct impact on the protection cover you get. Today, the insurance industry has evolved a lot and there are types of life insurance policies available that cater to the specific needs of the people. So, right from choosing the right type of policy, to choosing the right coverage amount, the process can seem a little overwhelming. But, once you initiate the process, and do a little research, you would soon realise that it is not as difficult as it seems.
If you are a first-time insurance buyer, it is paramount that you first determine how much insurance you need to protect all your family members. While calculating the amount, you must take into account the age of the dependent members, medical history of the family, medical inflation, etc. You can also consider using a life insurance calculator to get a rough estimate of the insurance you need. Once you have a figure in mind, it would give a good sense of direction in choosing the right type of policy.
Finally, before you start looking for the best life insurance policy, here are few important factors you must consider.
Take benefit of the free look period
Today, several insurance companies in India have free look period facility, which allows the policy buyers to review the policy for a certain period to know if it caters to their needs and accordingly make changes to the policy or even reject it completely. So, when you are buying a life insurance policy, make sure to enquire about the free look period and take advantage of it. If, during this period, you feel that the policy is not right for you, you can look for a better alternative without any financial obligation. Make sure that you carefully read about the terms and conditions of the policy to make an informed decision.
Know about the inclusions and exclusions
Different types of life insurance policies have different coverage terms. So, before you sign the policy documents, take your time to review the inclusions and exclusions of the policy. This would give you a fair idea if the policy meets your expectations. For instance, it would not make sense to purchase a policy that does not offer protection for death against critical illness like cancer if you have a family history of cancer. So, make sure that you know exact what is covered and not covered to avoid any legal hassles later.
Understand if the policy offers only protection
Although the primary objective of the life insurance policy is to offer protection, today, a lot of people buy insurance for investment purposes too. For instance, life insurance policies like ULIP offer the dual benefit of protection as well as returns on investment. So, if you are looking for insurance that allows you to earn returns while providing life cover, you must choose the right type of policy. But, remember such policies tend to have a higher premium than pure protection policies like a Term Insurance policy.
Review the CSR
CSR is the claim settlement ratio of the insurance company. It is an important factor that indicates the number of claim applications that the company has settled successfully, as against the number of claims rejected. Make sure that you look for an insurer that has a high CSR ratio. You can easily find the information on the insurance company’s website.
Buy from a reputed insurer
Lastly, the importance of the insurance company’s credibility and reputation cannot be underestimated. Always buy your policy from a renowned company. This will ensure that you get quality services, and get full value for your investment.
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