Are you worried about future financial problems plaguing your family? If yes, then you are not alone. Like you, millions of other breadwinners in India are consistently worried about the uncertainties that misfortune events may fling in the face of your loved ones – especially if you are not around to help them find their way forward. By investing in the right insurance plan, you are making a decision that is directly related to your future.
To ensure that you make the right choice, read about the factors that you should look into when comparing insurance plans.
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Premium
When it comes to getting an insurance policy, the first thing that you should be focusing on is the premium. If you are new to the world of insurance then you should know that the price that you will be paying for your insurance coverage is known as premium. This is paid periodically as per the insurer’s rules and regulations. Commonly, consumers tend to focus on getting the lowest premium insurance policies. This follows the rationale of getting something that will not leave a dent in your pocket. However, when it comes to insurance there are various other factors at play too.
Income
When you go shopping for insurance plans, you need to take your current and potential income into account. Your current income, along with what you will earn in the future, should be considered carefully as you have to pay the premium for your insurance plan. You will have to discuss this when you visit an insurer as they will be keen to know what your financial plans are.
Pros vs. Cons
Insurance is an investment. Like all investments, you have to consider the pros and cons. When it comes to insurance you will have to map its benefits and the rules of its coverage against the costs and monetary investments that you will be making. It is imperative that the benefit offered by the insurance plan chosen by you justifies the money that you will be paying for the same. Companies like Reliance Life, LIC, and others focus on detailing every benefit that their consumers will enjoy, for this reason specifically.
Who does it Cover?
Insurances are of many kinds and they offer different kinds of coverage. When you are comparing insurance policies, it is important to ensure that you check whether the same cover your dependents. If you are looking for life or health insurance, do take meticulous care in checking whether the plan shortlisted covers most health problems or not.
Types of Life Insurance Policies
Once you start shopping for insurance, you will learn that there are actually four kinds of insurance plans that you can get. So, if you would like to invest in a particular kind of insurance, we recommend that you read about them all.
Endowment Policy: Life insurance plans are offered as endowment policies where you sign a contract with the insurer to pay a prescribed sum of money to you on the maturity of the contract, or upon your death (to your closest relatives whom you have named in the contract); whichever takes place earlier.
Term Insurance Policies: These insurance plans offer coverage to customers for shorter or limited time periods. These can be expensive due to their small life.
ULIP: Insurance plans are also offered on the value of your assets, at the time when you are getting your insurance. The value of the policy will be directly related to the value of the underlying asset. For this reason, these policies are known as ULIPs or Unit Linked Insurance Plans.
Money Back Policies: They may sound like endowment insurance plans, however, they are different. These policies offer insured party payments at regular intervals, in the form of survival benefits, during the term of the policy.
Way Forward
Choosing a life insurance policy is an act that needs to be performed carefully. You don’t need to rush into buying one. Make sure you talk to different people, including the consumers using the insurance plans that you are interested in. With due diligence and careful planning in place, you can get the perfect insurance plan for yourself.
All the best!