The answer to these six questions of life insurance will remove all your confusion
People are now beginning to understand the importance of insurance. The corona virus epidemic has a big hand in it. This sudden illness devastated many families. If the person earning in the family dies, then the whole family is shattered. In such a situation insurance prevents the family from disintegrating.
Through this article, I have tried to answer 6 such questions related to life insurance, which are often in people’s minds.
- What is the purpose of taking life insurance and who should buy the policy? Life insurance basically meets your life goals with the objective of protection, savings, investment and health. It gives you financial freedom so that you can successfully achieve the upcoming goal of your life. Life insurance is the financial security cover for the family in the event of the death of a person. It helps in providing security in recovering from financial crisis arising out of events like disability (disability) or death. 2. When should one buy life insurance and what should be kept in mind while choosing the right policy? My advice is that whenever someone starts his first job, he should get a life insurance plan soon. Apart from the safety aspect, insurance also makes a habit of saving from an early age, which is very important for financial discipline in the long run. Many factors are important in the decision making process.
Insurance should be included in the financial plan as a whole. Before choosing the right product for you, look at the life goals for which you are planning, and then look at the various products that fall within the scope of your income. Until your insurance is not linked with the financial goal, you will not be able to choose the right product for you. 3. What are the different types of life insurance products? Life insurance offers various solutions to meet various life goals. Key security products such as term insurance and critical illness solutions provide you financial protection against incidents such as death or diagnosis of critical illnesses. There are also endowments and market-linked products for raising or gathering money in the market, which not only helps people save money, but also increases assets for their long-term goals such as children’s education, etc. Income solution is an excellent way to prepare alternative or second source of income for all age groups. Similarly, pension and annuity products are a great option for retirement planning.
- Do I need a term insurance policy? How to assess adequate coverage for yourself? Term insurance is a pure form of protection and people who are financially dependent on family members should choose it. To buy a term insurance plan, many things should be taken into consideration, including income, expenses, liability, inflation rate, etc. In today’s time, there are many ways online, through which you can assess adequate coverage for yourself according to your special needs. The empirical rule is that life insurance cover should be equal to 10 times the current income of the person and it should also include liability so that an alternative source of income can be prepared in the right way. As your responsibilities increase, your insurance cover should also increase.
- What precautions should I take to ensure that my dependents get the desired benefits? Life insurance policy is such a promise (promise), which is fulfilled in your absence at a later date. It is very important that you give complete details of all the necessary information to your insurer. Information about your income, education, profession, health (pre-existing diseases), family history, habits like smoking and drinking should be given openly. When purchasing the policy, all the facts are disclosed truthfully, then there is a possibility that your dependents can get a hassle-free claim.
- What should be kept in mind while choosing an insurance company? It is important to choose the right insurance company for you. But it is more important that you choose the right product for you. First shortlist for yourself the product you want to buy and then determine whether the company offering is fundamentally strong or not. Important factors such as the claim settlement ratio (settlement ratio), return on fund managed by the company, IRR, product fees, previously announced bonuses and performance of the company should be considered. I leave you with this final thought – do not blindly follow the recommendation of a friend or relative. Let them help you, but make sure that the decision you make is based on your own research, needs and understanding.