by manish pandye
Published Tue, May 2nd 2017, 17:54 | Finance
Life insurance can form a vital part of your family’s financial security and well-being. It’s considered as the cornerstone of sound financial planning. However, the sector is expanded a lot and many new types of policies have come due to which you might find the thought of buying the right type of cover a little daunting.
Here are few tips to consider before buying your life insurance policy:
The first thing would be to understand your responsibilities and number of dependents. In case you have no debt and would leave estates with enough cash to pay its own taxes and expenses, you probably don’t need insurance cover. However, if there are certain people dependent on you then owning a suitable life insurance cover is a must. It's important to know their financial goals, requirements, debt amount, inflation costs and survival needs to buy a policy. It can apply to couples in which the survivor would be financially impacted with income loss through the death of a partner and for the dependent adults, such as parents, siblings or adult children who rely on you financially.
Even if you don’t have any other assets to pass on, you can create an inheritance by purchasing a life insurance policy and naming them as beneficiaries.
Essentially, there are three types of insurance policies - term life, whole life and universal life. If you have major financial crunch then term plans are best policies that can give maximum cover in lower premiums costs. In case you need an insurance cover till the time you live and want to accumulate savings, a whole or universal policy will make a better choice.
There are various riders such as critical illness, permanent disability, waiver of premium, etc. It is generally a good idea to incorporate any rider in your policy as you will get maximum benefits with spending few more bucks on the premium costs. Waiver of premium is one of the best riders that you can eye upon as if you’re disabled due to any unfortunate event it will waive off future premiums and ease out the burden of premium as well as keep your cover intact. Similarly, guaranteed insurability permits you to add to the death benefit without providing additional evidence regarding acceptable health conditions or not.
Shopping around will help you save a lot of money on your life insurance policy. You can opt for policy comparison online across various sites and check for policy benefits & features, discounts, easy claim settlement ratio, etc. Life insurance is quite a competitive business and insurer will target the potential customers and try to retain existing customers with customized with great deals, reduced premium costs, and other add-on benefits & features in the insurance policy.
Once the life insurance policies is issued, inform your beneficiaries about it, let them know where to find the policy papers in case of emergency, how to make a hassle –free claim so that they get quick access to the cover amount. Store your document online as well as keep a hardcopy at home or office.
In today’s time of growing uncertainties, insurance is the best gift you can give to your family members for safer and secured financial future.