Life insurance is a long term contract and meant to provide your loved-ones financial protection when you are not there hence you need to pay little attention while buying a life insurance policy.
And if you are going to buy a life insurance policy for the first time in your life then here are some tips to help you to choose right product. Usually, we buy a life insurance policy on someone’s recommendation; it is not the right way.
Evaluating need: First and foremost reason for buying a life insurance policy should be its requirement. You need to analyze do you really need it. If you have dependents and you are sole breadwinner of the family then it must undoubtedly be your top priority to have a life insurance policy.
Type of policy: After this, you need to think which type of policy will help to achieve your financial goal, whether you need only term cover, or a traditional policy or a unit-linked insurance plan (ULIP). If you need protection at minimal cost then you can go for a term plan. If you are a conservative investor then and need savings element with protection then you can opt for a traditional policy. And if you have a risk appetite, then go for a ULIP.
Coverage amount: After that you need to ascertain how much coverage you need. Having less coverage defeats the whole purpose of insurance. Usually, to ascertain right amount of coverage, you can take in account your all outstanding loans, education and marriage expenses of your children and ten times of your annual income to arrive at a coverage amount.
Right company: As life insurance is a long term contract, choosing the right company becomes imperative. As your family members have to deal with the company to claim the amount hence choose a company that has a good track record in claim settlement.
Comparative study: Don’t buy a policy just because someone have recommended to you. Give little time to compare plans available in the market. And then choose the best and most affordable product that suits your needs.
vinay mohanty
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