Quick Guide for Choosing a Life Insurance Plan

Choosing the right life insurance policy can be tricky because life insurance policies come with various different options to choose from. With the change in needs of the customers, life insurance sector has also evolved accordingly. Now, life insurance sector is not only limited to simple whole life plans, but it offers a wide variety of plans with numerous options.

To help you decide which life insurance policy is right for you, we will look at a quick guide for choosing a life insurance plan      

Decide upon your type of Insurance

There are different kinds of life insurance plans available in India, like term plan, whole life plan, endowment plans, unit linked insurance plans and money back policy. The most efficient way to decide upon the type of plan is to know your reason of buying the policy. Life insurance plans are not only bought for a protection against life, but it is also bought as a form of investment, saving, retirement plan, etc. For example, you have taken a home loan of Rs. 50 lakh for 10 years and you want to minimize the risk of loan payment in case of your demise, then you can buy a term insurance plan for a policy term similar to the years of loan. So first of all, understand your need of buying a life insurance policy, know the features of different life insurance policies and then choose.

Choose your Cover

A right amount of cover is very much necessary to meet your expectations from your life insurance policy. You may be thinking that your life insurance policy is perfect for you, but after receiving the benefits, it may fall short of your requirements. Never choose your cover in a hurry. Always consider the following factors while deciding the amount of cover

- Inflation

- Future obligations

- Number of dependents

- Debts and Loans

- Lifestyle

Take your time, grab a pen and paper, make calculations and then decide your cover amount wisely.

Compare

There are more than 20 life insurance companies in India. Going for an insurance policy with blinders, without considering other policies, can put you at a loss. The price, benefits and limitations of life insurance policies vary from company to company. Upon comparing, you will find that two companies will be offering almost similar type of life insurance policy at different prices. Comparing different life insurance policies helps you to create a pool of life insurance policies to choose from.  You can compare life insurance policies through various IRDAI certified insurance web aggregators. The comparison through the web aggregators is very easy and unbiased. You can also compare life insurance policies through the insurance company’s website also.

Understand the Brochure

You can get a brochure of a life insurance policy very easily on the insurance company’s website. Knowing your policy at brief will help you get maximum benefit and will keep you away from any hassle. There are many circumstances under which you are not covered through your policy and there are also many hidden benefits under your policy which you will not be able to avail if you are not aware about them. A brochure of a policy contains inclusions, exclusions, terms and conditions of the policy. You will find every policy related information in the brochure. Read the available brochure well and if any queries arise, ask your agent or an expert. A well understood policy is always more beneficial.

There are many companies and policies available in the market. It is your responsibility to choose the right life insurance policy, which will only be possible if you have a better understanding of the various aspects of life insurance policy and your needs. Purchasing a life insurance policy is a lifetime decision, so never be in a hurry to buy a policy.