5 Tips to Help You Find the Right Life Insurance Cover

5 Tips to Help You Find the Right Life Insurance Cover

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Life insurance protection is a basic necessity for all. It helps you get financial protection against uncertainties that may crop up anytime in life. Read on know how to find the right life insurance cover.

In India, there are many insurance companies that offer a variety of life insurance plans to suit the needs of the people. With so many options to choose from, finding the right life insurance plan to suit your specific needs can be overwhelming. But before we get into knowing how to choose the right policy, let’s understand what life insurance is and what its benefits are.

What is a life insurance policy?

A life insurance policy is an agreement between the policyholder and the insurance company. The insurer pays the sum assured in the event of the policyholder’s untimely demise or at the time of the policy’s maturity as per the contract terms. The policyholder pays a premium to get the life protection. Also, the policyholder has the flexibility to choose additional riders by paying an additional premium.

Benefits of buying life insurance policy

  • Gives you peace of mind knowing that your family has financial security even in your absence
  • In case of your untimely death, the sum assured can help the family pay off the debts
  • Helps you live a financially independent post-retirement life
  • It is an excellent investment to meet short-term and long-term financial goals

How to Buy life insurance policy?

Buying a life insurance plan mainly depends on your requirement and the medical condition of the family members. While buying a policy, you must consider the following things:

Coverage

You must assess how many members you have in the family that are financially dependent on you. Knowing the exact number and the extent of their dependency is the key. After all, the main purpose of life insurance is to provide your family with financial security. You must also consider the lifestyle of the members, to get a fair idea about the coverage amount you need to help them maintain the same even in your absence. Consider future expenses like child education fees, inflation, and choose the coverage amount accordingly.

Age

Buying a life insurance policy based on your age plays an important in helping you decide the type of plan you must buy. The insurance companies consider the age of the person as one of the key factors to determine the premium amount. The younger you are, the lesser will be the premium, and vice-versa. Hence, you should buy a life insurance policy at a young age.

Retirement goals

Everyone has investment goals. Investing in an investment-based life insurance policy would be an excellent investment choice if you want to build a corpus for your post-retirement life. Assess what you want to accomplish, choose the policy, and the coverage. Again, consider the inflation factor, and it is better to choose a plan with a higher sum assured.

Risk appetite

It is another significant factor to consider while purchasing a life insurance policy. Know your risk appetite. If you are comfortable with taking a risk in order to get valuable returns, you can invest in a unit-linked life insurance policy. You can invest in an endowment plan if you don’t want to take a risk and are looking for a plan with moderate returns.

Riders

Riders are the add-on covers that you can buy at an additional premium. A typical life insurance policy does not cover all risk, and the riders can mitigate such risks. Some common riders that you can consider buying with your life insurance plan are-

  • Personal accident cover
  • Critical illness plan
  • Premium wavier
  • Surgical care

To sum up, know your needs well, and assess your financial goals before choosing a life insurance policy.

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