Purchasing a life insurance policy is important as it ensures that the future of your loved ones remains safe and secure even if you are not around in the future. In case something happens to you, your life insurance policy ensures that not only your family’s financial needs are taken care of, but also your immediate financial liabilities are cleared, thus protecting your loved ones from any sort of financial trauma.
While looking for a life insurance policy, you will come across a plethora of options. However, you must purchase a policy based on your needs and hence, you must keep certain things in mind which will help you buy a plan suitable for you. We will have a look at some of the things that you must keep in mind while purchasing a life insurance policy:
- Know the purpose behind purchasing a life insurance policy: You must be sure about the reasons why you want to purchase a life insurance policy. Depending on your goals, whether they are short term or long term, you will have to decide which type of life insurance policy will be suitable for you.
- Choose an appropriate cover amount: You must choose a cover amount which you feel will be enough to take care of your family’s needs in your absence. You must take inflation into account and based on factors such as your age, future goals, financial capabilities, etc., you should decide on the cover amount that will be suitable for you. In short, the cover amount must take care of your family’s financial needs even if you are not around in the future.
- Choose a long policy tenure: There are times when people go for a shorter policy term so that they pay a lower premium. You should refrain from doing something like this. Your policy term should be long and the policy must cover you till the time you are working and till you get to fulfill your goals. For example, if you intend to work till the age of 60 years and your age is 25 years, then you must purchase a life insurance policy which covers you for 35 years.
- Look for additional benefits: You must look for a life insurance policy which offers you additional benefits in the forms of riders or add-on covers. These riders can be extremely helpful from a financial point of view and hence, based on your needs, should you opt for a suitable rider.
- Purchase a policy from a reputed insurance company: It is important to purchase a life insurance policy from a reputed or trusted insurance company. One of the ways through which you can decide whether an insurance company is suitable for you or not is to check the claim settlement ratio (CSR) of the insurance company. Higher the claim settlement ratio, better the insurance company is likely to be. You must also check the customer service offered by the insurance company and the turnaround time taken by the insurer’s customer service center to resolve a query. If an insurance company has a good claim settlement ratio and a low turnaround time to resolve your queries.
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These are some of the things that you will have to keep in mind while purchasing a life insurance policy for yourself. For starters, it is important you properly compare the various insurance plans offered by insurance companies in India. You must look for a policy based on factors such as your age, future goals, financial capabilities, etc. If the requirements that you are looking for are fulfilled, you can go ahead and purchase the life insurance policy which you feel will be ideal for you and your loved ones in the long run.