While the thought of walking into your home and being greeted by loved ones brings a smile to your face, the thought of not being there for them can be eerie. This is especially true if you are the sole breadwinner.
While it is impossible to put a price tag on someone’s life, it is crucial to be financially prepared for such uncertainties in life. Taking the best life insurance policy in India can help secure the financial future of your loved ones.
Image Courtesy: Shutterstock
However, before purchasing a life insurance policy, it is important to know some things.
Life insurance policy: an overview
Life is full of uncertainties, so it’s important to keep your family safe. This can be done by securing them with a life insurance policy.
A life insurance policy is a legal agreement between the insurer and the policyholder. The insurance provider agrees to pay a certain amount as decided at the start of the policy upon the death of the insured. This amount is paid in exchange for installments of a fixed amount at regular intervals.
The amount that the insurance service provider agrees to pay is called the sum insured and the amount paid periodically is called a premium.
A life insurance policy can be purchased online and offline. Also, an insurance agent can tell you about the best life insurance policy in India. Many insurance companies offer special life insurance policies online that can be purchased with just a few clicks.
Another thing to know is that the amount paid on the death of the insured is called a death benefit. It is given to the representative designated by the policyholder.
Importance of buying a life insurance policy
Now that you’ve explained life insurance, are you wondering why it really matters?
Taking the best life insurance policy in India can protect your partner and children from devastating financial conditions. It not only provides financial security, but helps pay debts, living expenses, and medical bills.
Also, you will have the option of customizing a life insurance policy to suit your needs. You can get additional benefits with endorsements with a slight premium increase. All of this helps to ensure lasting peace of mind.
How can you find the best life insurance policy in India?
Choosing the best life insurance policy in India can be overwhelming if you don’t know what to look for. Take a look at the factors to consider before taking out a life insurance policy.
Assess your financial situation
It is essential to have a true picture of your financial situation before deciding on the type of life insurance you need.
Consider what you already have in place for dependents in your family. This includes retirement savings, emergency savings, and work life insurance coverage. If you don’t have enough, talk to a financial planner.
Calculate optimal coverage
Most financial advisors suggest buying life insurance for ten times your annual income. Also, never underestimate the amount of life insurance you need.
In addition, several elements must be taken into account when calculating the optimal coverage. For example, consider IMEs that your family might struggle to pay if you are in debt. You must also have sufficient funds for your child’s higher education or marriage.
Image Courtesy: Shutterstock
Determine the premium amount
You can easily determine the premium amount using online calculators. Additionally, it is important to compare different plans to find a life insurance policy that offers the highest coverage. More importantly, the premium rate should match your budget.
The optimal duration of the life insurance policy should be the number of years that your family members would be dependent on you. The rule of thumb is to deduct your current age from the age at which your income would stop.
Be ready to respond
While taking the best life insurance policy in India, you must be ready to answer many questions. The estimate received from the insurer will only be an estimate of the premium. However, you will need to fill out a lengthy application form to get a policy.
The insurer will ask you questions about your age, your medical and family history, your smoking habits, etc. You will also be asked how risky your job or hobby is to determine the actual insurance rate. Be sure to provide accurate information.
Read the final insurance policy carefully
Before making the final commitment, read the final policy carefully. Understand the terms and conditions and find the relevant details like the blocking period and the circumstances under which you cannot make claims.
Purchasing a life insurance plan is the best decision to make for the protection of your loved ones. It acts as a monetary safety net and can provide valuable benefits.
Of course, you have to make a long-term commitment to pay a premium for the policy. However, the benefits fully justify the premium amount.
Compare different life insurance policies and buy the one that offers the best financial coverage.