by manish pandye
Published Wed, May 24th 2017, 18:22 | Finance
There are instances in life when one starts thinking that he/shecould have taken a better decision. And one such instanceis about the financial security of their loved ones.
Although, there are various investment tools available in the markets for financial security, wealth creation, etc. one of the best and most beneficial tools would beowning a life insurance policy. The standard rule set by financial experts say your cover should be at least 10 times of your annual income for your family to lead acomfortable life even in your absence.
If there are dependents on you such as your siblings, spouse, kids, parents who rely on your income or a mortgaged property – a life insurance would be an ideal solution for them if you were to meet any unfortunate event.
There are other factors too that should be figured upon while choosing your life insurance cover.
Financial goals – You need to assess the individual and family goals in life, your age, occupation, additional income source, the number of dependents, their financial goals. These goals will change with each stage of your life and hence the cover needs to vary accordingly. You have to project your future goals and accordingly choose a suitable amount for investment.Look for a need-based policy rather than choosing any irrelevant one just to save taxes.
Proper Clarity - Once you have made the decision of investing in aparticular policy, it becomes important to read the fine prints carefully and minutely. You will need to understand the implications and the actual benefits you will get. The proposal form has to be filled carefully completing all the columns properly such as existing medical conditions, any alcoholic or smoking habits, to avoid a situation where you might be devoid of benefits for wrong, unintentional declaration.
Insurer Background -It’s essential to check the company reputation. You can visit a website, talk to friends or family members, discuss with financial experts, read customer reviews to gauge the reputation of the company. Online websites give transparency on policy structure, customer service capability, networking, online platform, claim settlement capacity, etc. You can also find many sites that will help you compare various policies as well as the premium costs.
The cost of premium – Once you have selected the life insurance plans a certain amount has to be paid to keep the policy active. It’s known as premium costs. It can be monthly, quarterly, half yearly or yearly depending upon the policy you choose and the flexibility provided bythe insurer. While making a decision choose an amount that you can afford to pay. Else, if you can’t pay due to any unnecessary circumstances it will result in policy lapse.
Right intermediary – Choosing an agent who possesses right knowledge to all answers for your concerns and guides you in choosing a proper cover. The ‘free lock’ period will help you understand the cover and premium costs for taking a judicious decision on life insurance policy purchase.