Life is unpredictable, you cannot predict what will happen in the next second. This uncertainty always raises one question in everyone’s mind. What if, when I am around with my family? Who will take their financial responsibility?
Things You Should Know Before Purchasing Life Insurance
Technically, to find the answer to this question you need to do a proper analysis on Insurance Plan and Insurer both. It is the only best way to give financial security to the family. With insurance, you can live a stress-free life with your loved ones.
But, what type of life insurance would work best for your needs? How do you know whether life’s insurance you are taking is ideal for your requirements?. Because of many insurance policies out there in the market. It is vital to know some life insurance facts. In this article, we will cover 10 things you must know before considering insurance.
10 Things You Should Know Before Purchasing Life Insurance
Life Insurance is a Risk Coverage Tool, not an investment
I hope you understand this life insurance fact “keep your insurance and investment separate”. Many people considered insurance as an investment, but it is wrong. Life insurance only gives you coverage of life.
Agents are still misleading people by suggesting that life insurance is a valuable investment. Though life insurance and investment are purchase to secure financial needs. The insurance and term insurance fact is that it is specially designed to meet the financial goals after the death of insurer whereas investment offers better returns after the maturity period. For Investment, you should choose Mutual Funds, SIP Plan for Future Growth Best Mutual Funds, Fixed Deposit, Pension Plans and there are many best Investment options are available in the market.
How Much Coverage Needs
This question you have to face during the processing of life insurance and many people feel difficulty to decide. The simplest method to decide coverage is that multiply your present income with a number say 20 or 30 and the resulted figure will be the coverage. But, before finalizing coverage you should make the comprehensive calculation.
Select Add- on’s Features Wisely
Add-ons are additional features that you can buy and potentially customize your life insurance policy. Some additional features are accidental, rider-coverage, disability, critical illness, or health insurance with insurance.
But, the life insurance fact is that these additional features come with an expensive amount. So, before adding additional features check the premium amount wisely.
Tenure of Life Insurance
Tenure of insurance is one of the most important life insurance facts. The longer the tenure period, the more premium you have to pay off. But, the question is “how would you choose the right tenure period?”. You can decide the tenure period on the following basis.
- As per the life insurance facts, the maximum tenure can be 25 years till the age of 60 years.
- The formula for deciding the life insurance tenure period is “minus your current age with retirement age”.
Read Insurance Policy Carefully
It is vital to read terms, coverage plans, beneficiary, and renewals and termination clauses of life insurance. There are some important things you should check in the insurance policy.
Do premium vary to vary.
- What is the procedure to receive maturity advantages?
- After death how soon your beneficiaries will receive life insurance benefits.
- Discuss the terms and policy with your beneficiaries to make claim procedure hassle-free.
There are many life insurance companies out there in the finance market. And all insurance facts are different. So, before purchasing insurance compare two and three life insurance companies policies effectively. This thing will give you a clear insight into insurance. And by reading terms and policies carefully you can easily decide which insurance is perfectly matched with your requirements.
Keep in mind, in most cases agents will try to influence your decision to some other policies. Because of their own advantages. So, be aware of them.
Mention Everything on the Application
It is one of the most types of life insurance facts and contracts. Share all your details regarding the subject of matters with the insurer. For example, if you are an alcoholic, smoker and you don’t disclose these things during signing insurance. If Life Insurance Company found the cause of death due to alcohol or cigarette, they will not pay any coverage amount.
The Premium Must be Affordable
Before buying life insurance always choose an affordable plan that you can easily pay at the regular interval of time. In case, if the premium amount increases further, still you will able to afford it.
Never Forget to Pay a Premium
It is one of the most important life insurance facts. In most cases, the insurer will cancel the policy after a certain period, if you don’t pay a premium on time. Many insurers allow you to pay a premium, but the late premium charges may increase your investment cost. So, after taking insurance policy, never forget to pay a premium on time. This thing also increases your credit score value. Spreadsheet or auto-premium reminder will save you from the late payment.
Review Your Insurance Policy Every Year
Review your insurance policy is a crucial life insurance facts. If you need extra liabilities to share and ask your agent to make changes.
One of the chief life insurance facts is claim settlement. Share the claim settlement procedure with your beneficiaries, so that they can easily avail the claiming request effortlessly when you are around with them.