Life insurance is critical for ensuring the policyholder and his/her family’s financial security. However, as there are many plans, it might be difficult to select the right one.
In this article, we will discuss steps that you should follow to buy the right life insurance plan.
Every person wants to provide financial security to their family. One of the ways to ensure it is by purchasing life insurance.
In case the policyholder passes away during the tenure, the insurer can provide a sum assured to his/her family. Thus, life insurance can offer financial security to the policyholder’s family. Hence, it is essential for every working professional to purchase a life insurance policy. However, there is a wide variety of life insurance policies and buying one can be very difficult. But with the help of a few easy steps, a person can select the right plan.
Here are the steps to buy life insurance–
Assess Your Requirements
The first step is assessing your requirements. Assessing your needs will help you understand the life cover amount you require. You need to ensure this life cover amount will be sufficient.
There are various factors that you need to consider, such as your current income, existing debts, number of dependants, future expenses, etc. Also, you should consider big-ticket expenses, like your child’s education, marriage, etc.
Select the Type of Life Insurance
There are different types of life insurance, whole life insurance, term insurance, etc. You need to understand which type suits your requirements.
Compare Different Insurers
Once you know the cover amount and the type of insurance, you should compare different insurers. This is because the premium that you must pay will vary based on factors like the cover term, gender, cover amount, type of insurance, age, etc.
Furthermore, one of the most important factors that you need to consider is the claim settlement ratio. The claim settlement ratio refers to the number of claims settled by the insurer compared to claims received. The higher the claim settlement ratio, the higher the likelihood of getting the claim approved.
Apart from cover term and sum assured, inflation is also very important. This is because inflation can lead to a loss in the value of your money. Hence, it is recommended to consider inflation while calculating cover term. This can help in tackling the impact of inflation.
Add-ons are additional benefits that can be purchased by paying extra premiums. These riders can enhance financial security. Some of the most important riders are accidental death benefit, critical illness cover, etc.
Submit Your Application
After you select the insurance you want to buy, you need to apply for it. You will be required to submit the documents asked by the insurer. After that, the insurer might ask you to take a medical test.
Follow the Steps to Buy Life Insurance
While selecting the right plan can be difficult, following these steps can make the process easy. Select the right plan to provide your family with financial security.