The process of buying a life insurance policy can seem complicated and maybe even a little intimidating, but it is a basic requirement to secure your financial future. An insurance plan not only provides a lump sum amount at the time of death, but also provides a maturity benefit. It also helps you save tax.
As there are numerous insurance plans which differ in their features and long-term benefits, it’s important to know what you’re looking for. Lifestyle and financial conditions always differ from one person to another, therefore it’s important to ask yourself a few questions which can help you decide the most apt insurance plan.
Ask yourself these questions before buying a life insurance policy:
1. Why do I need life insurance?
We all think about what will happen to the people who will outlive us? It’s the most instinctive feeling to want to ensure that the people who depend on you, the people you love will be okay even if you’re not around. Buying a life insurance policy will help you give them financial security which will help them to keep living their life the same way, even after you. Before buying a policy, look at your marital status, the age of your children if you have any, your job status and where you see yourself post-retirement. Then purchase a life insurance plan that fits your financial goals and needs.
2. What is the best age to buy a term plan?
It’s always a great idea to start young, especially when it comes to securing your future. The ideal age bracket of 25-40 is when you start thinking and planning for the future. One of the most important things to do is to control your life, review it and then buy an insurance policy apt for your lifestyle. The younger you start, a larger corpus you can collect and live a great life post-retirement.
3. What is the goal of buying life insurance?
If your goal is just about providing a comfortable life for your family in event of your untimely demise, then a term plan is best suited for you. Because, a term is the purest form of insurance which takes care of all your beneficiary’s requirements and needs. But a term plan won’t give any returns on the premium paid or any money if you live beyond the term of the policy.
4. Do I have to take a medical exam to obtain life insurance?
A medical test is required by all companies providing you with a life insurance policy. Therefore, it’s always good to buy insurance when you’re younger and when you have a lesser risk of getting diagnosed with diseases. Most high coverage policies require you to undergo a medical examination, though it’s not necessary to visit a doctor. These tests help in determining the policy premium.
5. When will I have to pay the premium?
After determining how much you can afford to pay a premium, you should ask when you must pay – monthly, quarterly, half-yearly or annually? If you can’t keep up with paying premiums, then you must opt for a plan where you don’t have to pay these premiums monthly.
6. How do I choose where to buy life insurance?
Do your research about the company’s history in the market, read industry and consumer reviews and look at life insurance financial ratings. Because it will help you pick the company you can rely on and make the right financial decision, securing your financial future.
Keywords: life insurance plan, term plan
By: Harish Kumar Sharma
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