Purchasing the best life insurance coverage is not easy at least for beginners. Over the past few years, the term insurance industry has transformed very drastically, with insurance companies in India getting more associated to the modern day requirements of their clients and providing more policies. Sometimes, finalizing the coverage amount and the right kind of plans has become more confusing. Follow below mentioned steps to select the right life insurance coverage:
1. Carefully assess your requirements : People buy term coverage to secure their families again any financial trouble when they are no more. Hence, do not underestimate the importance of this policy. Consider various factors like number of dependents, family member’s needs while deciding coverage extent. Also, consider your current annual income, liabilities, standard of living and assets.
2. Watch the ‘COST’ : Remember to check the life insurance premium amount along with the administration and fund management charges, riders and mortality charges. Do not forget to compare similar kinds of products online before you choose which is best for you. Carefully read the policy document and then only sign it.
3. Claim Settlement Ratio : If the claim settlement ratio of the insurer is higher, then more reliable the insurance company is. So, avoid getting influenced by what an insurance service provider may tell you or get lured by lower life insurance premium plans as they seem budget friendly.
4. Avoid Buying Excessive Coverage : According to insurance professionals, customers should buy term insurance only for the purpose of covering their loved ones. Therefore, buying various policies which are not in sync with your overall financial strategy proves a waste of your hard-earned money. Those who want to save tax and achieve the limits under Section 80C can invest their money in some other financial products to avail tax benefits more efficiently.
5. Review Your Life Insurance Needs : Periodically assess your investments while investing in a financial plan. In the same way, assessing insurance related needs regularly is important to avoid hassles in the future. It is a fact that the insurance coverage which you have bought when you were single may not be sufficient when you are married. Hence, assessment of insurance needs is very much necessary. Term insurance is an inseparable part of everybody’s life. So select the correct coverage amount and ensure than your family is secured.