Below is a checklist and essential facts about life insurance plans in India which will help you select the right life insurance plan.
Study the policy details carefully to get the most from your investment plan
Life insurance purchase should be preceded by a thoughtful approach. This refers to careful study of policy details. Usually, if the policyholder survives during or throughoutthe policyduration then the risk cover of the life insurance plan will end. This means that the policyholder or his dependents won’t receive any sum assured value ofamount.
Nevertheless, if it results in an unfortunate or sudden demise of the policyholderwithinthe policy period, his dependents will receive a sum assured value of amount.
Life insurance policy- beneficial for all age groups
· You can buy life insurance plans for various needs like for savings or fortheprotection cover.
· It isa good investment instrument for retirementplans and its benefits.
· A shocking fact- Products such as ULIPs as well as insurance policies are invested into with an aim of investment related options. However, their basic function to provide insurance and protection is frequently ignored by many people.
· Life insurance plan forms one type of a financial security for a person’s family in his or her absence.
· Criticisms-One major criticism faced by life insurance plans is for their non-transparent distribution. Many find or claim a dent in the distribution system. The distributors tend to sell policies unfairly. They sell policies just to obtain higher commissions by charging higher annual premiumsto the buyers.
· However, these plans areusually very cheap. For instance, one 40 year healthy person can buy 10 year of life insurance worth Rs 50 lakhs by just paying annual premium of less than Rs 10,000.
An easy way to buy life insurance!
You can effortlessly get life insurance plans online after analyzing products from different insurance companies. Hence, you will be able to get a plan which suits your requirements and falls in your budget. All you have to do is compare several Indian insurance companies and their product offeringsthrough just browsing their company websites.
The new IRDA guidelines-
The latest IRDA guidelines are in favor ofhigher protection facility to be given to all insurance policies. There’s a surge of this factor by 7-10 times of the value of sum insured amount. It also however depends on the age of theinsured.
Another option for better investment planning-
There’s another variation known as Term plan with Premium Back. The idea is that if the policyholder survives throughout the policy term, he/she should at least get histotal premium amount. Therefore, they are preferred by most people in India.
However, it requires the person to dole out higher premiums than normal premium plans offered by Indian insurance companies. Hence, think before you take any decision.
In the end, always choose considering all your essential requirements and taking aide of a professional when needed.
Life insurance policy acts as a boon for all those who are unable to bear high financial costs. People usually assume that their families will be able to pay off debts after they die. However, it presents a grim condition when the family is not able to pay off debts. Therefore, it is necessary to keep your family safe from such crucial future events such that they don’t suffer.
The question arises, “Which is the best way of determining the correct life insurance plan?”The answer is a “regular analysis.”A good analysis will help you oversee the immediate and future situations and thus decide on the appropriate life insurance policy.
Let’s first understand the importance of life insurance.
Importance of life insurance
Life insurance is usually sought by people who have the responsibility of handling dependent family members. It is a necessity for those who give their entire earnings for supporting the family’s livelihood.
Therefore, a person who does not have to take care of dependent family members does not necessarily require gettinglife insurance.
However, person responsible for providing his dependents must get life insurance. This will secure the person’s dependents against huge liabilities like mortgages, loans and children’s education and marriage. Hence, life insurance secures the future of children and parents in the breadwinner’s absence.
Further are the things which will tell you key aspects you should check for analysis to arrive at the correct policy cover.
Analyze the source of income
You should analyze the sources of income. Common questions like below should arise-
· Your salary is the only source?
· Are there any other members of the family who provide income?
· How many people dependon you?
Once you receive answers to the above questions, you’ll understand which type of life insurance plan you need.
Different policies have diverse benefits as well as costs. Therefore, you should carefully analyze the above questions and arrive at measurable needs. In this way, you will be able to take completeadvantage of available policy features. Once you’re able to determine your need, search for existing lowest cost insurance plansonline suiting your needs.
Tip- One should buy a life insurance policy only after a careful calculation of capital requirements (this refers deciding on the receivable lump-sum amount which would cover loan payoffs, child’s marriage and education). Also consider your family’s income needs after you’re gone.
Selecting the appropriate policy type-
Term life insurance –This cover insures one’s life for a specified term. The nominee will get the sum assured if you the policyholder dies within the policy term. Term life insurance plans are effective and inexpensive kind of life insurance plans.
Traditional Endowment plan –This cover offers insurance for longer time period. You get the money after the term of the policy ends. It is a type of policy which combines investment and insurance needs. Hence, it’s well suited for the people who have dependent family members.
In this day and age it is imperative that people cut back on most of their purchases to stay afloat. Low-cost alternatives are among the top priorities for everyone, rich and poor, as we put more money in savings and focus on what really matters in life.
When the economy speaks of gloom and money becomes tight, a lot of folks tend to do without previous indulgences and necessities. Things like shopping and restaurant dinners are fine to scale back on, but skimping out on term life insurance would be comparable to playing Russian-roulette with your loved ones security and well-being.
Low-cost term insurance may seem like a dream, but if the work is done correctly beforehand, it is attainable. Being pro-active in your search for affordable term life rates could save you hundreds- even THOUSANDS of dollars a year on your term life insurance premiums.
When looking for low-cost term insurance, the first thing to think about is RISK. Why risk, you ask? Because it is the first thing the majority of insurance companies think about when you approach them with your business. Your risk factor plays a big part in achieving low cost term insurance, it determines how low (or high) your premiums would be, or if you would be insurable at all with that particular life insurance company. Many factors are considered when life insurance companies asses your risk. Some of these factors can include:
1. General/overall health. Do you have any pre--existing health conditions? Are these conditions well managed and under control by a health care practitioner? Having health conditions that have been under control for a certain period of time (varies per insurance company) could be a positive factor in obtaining low-cost term insurance
2. Are you a spring chicken? The younger a person is, the easier it would be for him/her to find low cost term insurance. Life insurance companies consider each passing birthday a possible increase in the risk of dying. They often offset those risks of keeping you insured by increasing your term life rate at your renewal date of your policy. Are you not as young as you used to be? Don't worry, you could still get low-cost term insurance if you act now. Compare free term life quotes and obtain a term life insurance policy today to take advantage of the savings you do have access to, because although we can't roll back the hands of time, acting today could save you money in the future.
3. Shop until you drop. Obtain and compare term life rates from a wide range of reputable insurance quote companies. These companies are quick, free to use, and often only require a couple of pieces of information to generate your estimated term life rate. Your term life rates could fluctuate from one end of the spectrum to the other; so it's a good idea to get a ball park range of what your rate could be.
Being pro-active and independent in your search for low-cost term insurance will get you on the road to obtaining affordable term life rates. It will also save you money from having someone else do your (*ahem, easy) "dirty work", and give you the comfort in knowing your family's' future is protected.