Checklist before Purchasing Life Insurance

We have prepared a checklist for you before you purchase a life insurance, check out this list:-

1. You Should Check Yours Needs For Life Insurance Thoroughly

Check out with a reliable agent he/she can evaluate your needs and will provide suggest you proper available policies according to your need.

2. Decide your coverage according to your need

Some main basic questions while thinking about coverage are

·         How much income you provide to your family?

·         Apart from your family, is there any other dependent on you?

·         How will your family pay final expenses and repay debts after your death?

Your coverage discussion should be based on these questions; you want to make sure that you buy enough life insurance to cover the financial effects of an unexpected or untimely death.

3. Check Out Your Current Life Insurance Policy

Don’t cancel your current policy until you get the new one. You then have a minimum period to review your new policy and decide if it is what you want. The best thing is not to cancel your current policy but you can check out for that coverage and benefits of that policy before canceling it.

4. Compare the Different Kind of Policies

Mainly life insurance policies can be categorized in two types: term insurance and cash value / wealth creation insurance. Term insurance generally has lower premiums in the early years, but does not build up cash values that you can use in the future. Cash Value life insurance may be one of several types: endowment insurance, whole life, ULIPs. Your policy should be based on your needs now and in the future and what you can afford.

5. Affordability of  the Premium Payments is a Must Condition

Before you decide to purchase any life insurance policy first you must have to make sure that you can afford premium payment easily. If the premium price increases than will you able to handle it easily and up to what limit.

6. Choose A Well Informed Agent Who Can Evaluate Future of Your Policy

Some policies have low cash values in the early years that build quickly later on. Other policies have a more level cash value build-up. So choose an agent who can give you a year-by-year evaluation.

7. Keep Your Current Policy

It is important that you do not drop one policy and buy another without a thorough study of the new policy and the one you have now. Policy replacement is a costly affair.

8. Analyze Your Policy Carefully

Some basic questions about policy benefits have to be analyzed before going for that policy, like – How much do the benefits build up in the policy? What part of the premiums or benefits is not guaranteed? What is the effect of interest on money paid and received at different times on the policy?

9. Policy Review In Regular Interval Is Must

How will inflation affect your future needs? Do you need more insurance when your family size increases? Review your life insurance plans with your agent every few years to keep up with changes in your income and needs.

Source: https://www.policymantra.com/blog/checklist-before-purchasing-life-insurance/