5 Things You Need To Know Before You Purchase a Life Insurance
An ideal life insurance policy might just be the security requisite in times of need. Here are 5 things you need to know before you commit to a life insurance policy:
Clarity and Research
One should have a clarity of the objective of the insurance and the plethora of options available. Research your options well to avoid paying more for the same coverage option available elsewhere. Insurance being a long-term contract, it is crucial to understand every aspect of the terms of the policy, the benefits, the premium payment commitment, and the penalties on premium payment discontinuation, among other features. Browse through consumer forums online to avoid investing in companies with unreliable track record trends.
Choice of Payments
Once you have a sound understanding of the policy key features, select a suitable payment option. Pick an option from a lump sum, monthly, quarterly, or yearly that could be met with convenience. Opting for an Electronic Clearing Service (ECS) or auto-payment facility can help deter you from a delay in payments.
The Free-Look Bonanza
If you’re unsure about choosing the right policy, there are free-look periods associated with various insurances. A free-look period allows you to utilize a policy for a certain time before returning it. A refund will be provided on the premium paid, after a modest deduction basis the insurance provider.
The Add-on Rider
Try opting for life insurances that provide you with add-on services aka ‘Riders’ at a minimal cost. These services can be availed in case of health emergencies, accidental deaths and for income benefits. Ask your insurance provider about it when you zero down on an insurance plan.
Loan against Insurance and Claim Settlement
A number of insurance policies provide you with both – financial protection and a reduction in tax liability. Investors with limited assets can avail loans against endowment and money back policies.
It’s vital to check online (the IRDA website) whether the settlement claim ratio of your insurance provider has a competent record. Also, you can ask your friends and family regarding a particular insurer they’ve invested with.