Top 5 Ways to Get the Most Benefit from Life Insurance Plan

by Harjot Narula Compare Policy Insurance

Nidhi was very much relaxed with her decision of buying a life insurance policy. She was suggested for buying a life insurance policy by her neighbor Neelam, who told her that life insurance policy acts as a protection against life and pays benefits to your family member in the form of a sum assured in the case of death or accident of the policyholder. Nidhi was the only child of her parent and she knew that she is the only support for them for any type of income and she didn't want his parents to suffer financially because of her absence. But Nidhi didn't know about the variety of benefits offered under an insurance policy and that's why she was not able to get the most out of her insurance policy.

There are many people in India like Nidhi, who are not aware about the various benefits which a life insurance policy offers to the policyholder and that's why they are not able to avail these benefits and take advantage from it. So we have mentioned the top 5 ways to get the most benefit from a life insurance plan in this article:-

1. Increase Sum assured

At different stages of life, people have different requirements and adjusting your plan according to your requirement is the key to success. The same concept goes for your cover amount of life insurance policy. A Life insurance policy offers you the flexibility of increasing and decreasing your sum assured at important stages of life. For example, some life insurance plans offer you to increase your sum by certain percentage when you get married or become a parent. You also get the option of decreasing your sum assured after achieving a certain age.

2. Loan against your insurance

Most of the people are not aware with this fact that they can take a loan against their life insurance policy. Credibility issue while taking a loan is one of the biggest problems and a life insurance policy can help you with that. But you should know that all life insurance plans don't provide the benefit of loan, for example, you can't take a loan against your term insurance policy. The maximum amount of loan you can take against your policy varies from company to company. The interest rate of the loan depends on the number of premiums and the amount of premium which has been paid. The more amount of the premium and number of premiums paid, the lower the rate of interest will be.

3. Riders

A life insurance policy gives you the option to enhance your cover of policy by adding different riders. Riders are the additional benefit that can be added to your life insurance policy by paying extra premium to enhance your cover. While a life insurance policy will provide you with cover for your life only, adding a rider can enhance it to disability, critical illness, accident and can also provide you many other benefits. It is better to understand your need first and then add the required rider to your policy because riders don't come for free, you have to pay an extra premium amount to add different riders. Critical illness rider, accidental death benefit, Waiver of premium are some of the riders available with your life insurance policy.

4. Multiple nominee

A nominee is a person who is entitled to receive the benefits of your policy. A nominee can be your children, spouse, relative or friend, which is decided by the policyholder. Approval of unrelated parties is difficult because of the increase in risk. For many people, deciding the right nominee becomes difficult, especially if they have more number of dependents because nobody is aware about future relations. But you can choose multiple nominees for your policy and the sum assured is divided between the different nominees while in the case of successive nominee, the first one is always preferred over the second one.

5. Assign your policy

A life insurance policy gives you the option to assign your policy to someone else. The person who assigns the policy is known as the assignor while the person to whom the policy is assigned is known as the assignee. When you assign your insurance policy to someone, you lose the right over the policy and the assignee becomes the owner of the policy. You can assign your policy as a gift to someone or assignment of policy also happens while taking a loan against your policy. Your reason for assignment of policy should be genuine, otherwise the insurance company can decline your assignment.

6. Revive your policy

Many people have this misconception that if they miss the due date of the premium and even the grace period then they will not be able to revive their policy, but that's not the truth. A life insurance policy gives you the option of revival of policy, even after the grace period, by paying due premiums and interest on due premiums before the date of maturity.

A well informed decision while buying a life insurance policy helps you to get a better understanding of the policy and allows you to take maximum benefits from it. A life insurance policy offers a lot of benefits which can be availed only if you aware about them. So research a little bit and ask questions if necessary but understand your life insurance policy well.