A Complete Checklist on Choosing A Life Insurance Policy Plan

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Life insurance helps keep your family takes care of their financial needs in case something happens to you. Essentially, life insurance is a contract where you (as the policyholder) avail financial coverage against life’s uncertainties by an insurance company in exchange for a premium payment over a while. In case something happens to you during the policy tenure, the insurer will pay the sum assured to your policy nominee to pick up their lives where they left off. Having the best life insurance policy for yourself will also give you maturity benefits along with bonuses if you outlive the policy term! 

But the trick is to find the right policy term from the right insurer with considerable claim settlement ratio to ensure that the benefits are passed on to your family when the time comes. 

Let us talk about some reasons to buy life insurance at all.

Reasons to Have a Life Insurance 

Investment option

Apart from being financial security for your loved ones, the best life insurance policy in India is also an investment option that works as a replacement for the loss of income for your family after your unfortunate demise.

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Affordable premiums, high coverage

With the best life insurance policy in your kitty, you can avail of affordable premiums with significant payout options. For instance, the sum assured amount is at least 15-20 times your annual salary. However, the premium amount is relatively low for that level of protection. 

Assured income

You can also plan your retirement with a life insurance policy. Annuities allow you to get regular payouts that act as a source of income when you retire. 

Tax Benefits

Life insurance policies are tax-exempt and qualify for deductions under section 80C of the Income Tax Act. Even the maturity or death benefit is fully exempt from tax. 

Tips to Buy the Best Life Insurance Policy 

Tips to Buy the Best Life Insurance Policy

When investing in the best life insurance policy in India, you need to keep several things in mind. Some of them are listed below: 

Assess your needs

Even before you start looking at the best life insurance policy for yourself, it is essential to assess your needs first. Determine your financial contribution to the family and review other sources of income that can take care of the expenses in your absence. 

If no, then you need to factor in all your expenses, liabilities, and debts to come up with an adequate number. Additionally, you also need to assess how many people are dependent on you. Asking yourself these questions will help you make the right policy decision with a suitable sum assured. 

Compare policies

At the time of buying the best life insurance policy in India, you need to understand the types of policies and also their features as well as benefits to make an informed choice. Online insurance plans by reputed insurers, such as Max Life Insurance, allow you to make the right investment decision by comparing, reviewing, and selecting the policies that are most affordable and suitable to your needs. 

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Buy a policy you can afford

Once you have assessed different policies, you must determine how much you can afford to pay towards your premium. This is important because you will only be able to consistently maintain your premium payments for the foreseeable future if they are affordable. You should always start with the low-cost term insurance and then gradually upgrade to more prominent coverage when your financial condition improves. 

Understand the fine print

At the time of buying the policy, make sure you completely understand the policy document details and the fine print of the deal. You can either read the details online or take help from an offline financial advisor to educate you about the policy terms. You should also ask about the claim settlement ratio to ensure that the insurer has a high probability of honoring the claim when the time comes. 

Research the claim settlement history of the insurer

Purchasing the best life insurance policy from a reputable insurer only works if the insurance company has a claim settlement ratio no less than the 90s. The claim settlement ratio is the number of claims settled by the insurer about several claims raised in a given year. This number should always be in the high 90s for your preferred insurer. 

Factor inflation

While age and sum assured are essential considerations when buying the term insurance, you must not forget to factor in the impact of inflation on lifestyle needs. This is why it is necessary to take at least 15-20 times your current annual salary to calculate the sum assured. 

Rider benefits

Don’t forget to enhance your policy coverage with the help of rider benefits. Several insurance providers offer you the freedom to attach riders to your insurance plans to make it more customized to your requirements. 

Now that you are convinced about buying the best life insurance policy for yourself, you should compare different term insurance plans online. Review and compare the policies before making a decision. Online plans also allow you to make the purchase quick and hassle-free.

Some of the link on this post may have affiliate links attached. Read the FTC Disclaimer.

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