Buying Your First Life Insurance Plan - Here Are a Few Things to Keep in Mind
Buying Your First Life Insurance Plan – Here Are a Few Things to Keep in Mind
The most important thing to do for an individual is to get a life insurance policy, not only for his own secured future, but also for the security of their family. Choosing the right life insurance policy is important as it is not only going to give you benefits during its term but also after maturity. So you should always make a choice that best fits your current financial position and fulfills your financials goals.
There are thousands of attractive options available in the market offered by well reputed companies but you should always consider these two things –
- Which company is offering the plan
- Rate of the premium
But these are not enough to make the buy.
There are many other things that you should closely examine and look for while buying a life insurance plan.
First and foremost, it is very essential to understand the in and out of the factors like premium, cover, and terms of the policy you are willing to buy. If you are in your early 20s and are planning to buy an insurance for yourself, you can easily avail the benefit of early age as it’s your age and health which effects the premium of your policy. In other words, in your early age, when you are healthy you are benefitted with greater over. As you grow, the policies tend to get pricier.
Below are some things you should always keep in mind if you are looking to buy a life insurance for the first time –
- Know your agent – First thing you should do is to know your and inquire thoroughly about your agent. Make sure the agent is licensed and company approved. The agent should understand your needs and know what you expect to receive from the insurance policy an should put only suited plans on the table. You need to share your financial position and other details with the agent for better understanding but do now share your personal details and documents unless you verify the agent.
- Know the company – Knowing the company which is offering you the policy is very important. You should have complete knowledge about the present situation as well as the history of the company. Refer the annual reports, talk to different people associated with the company and research well. You can also contact and connect with the customers already seeking services from the company.
- Know your needs – It might be hard to predict the amount of the insurance to meet all the needs of the family for an individual. You need to sit down and discuss it with your family and hence your agent who is helping you to buy the product. Discussing your needs and explaining them to the agent will not only keep you both on the same page but also avoid unnecessary disparity in thoughts.
- Know the options – There are thousands of life insurance policies available in the market and it becomes rather impossible to have knowledge about each of them. You have to assess according to your needs as to which plan/policy suits you the best and helps you achieve your financial goals. It should be able to cater to your needs and also be affordable for you. There are types of insurances available in the market like, understand the difference between them, know their features like benefits, purpose, coverage, and premium and then avail the right plan. You can also take help from your agent to know about different schemes and policies and then plan according or else you can always refer the internet and get the information right on your computer screen. This not only helps you gain knowledge but also lets you compare different options and choose the best.
- Understand the product – After getting relevant choices closely understand their aspects. Before you finalise any specific policy make sure you have clear understanding of all its aspects ranging from features, premium, duration, coverage etc. This might be a confusing process but you need to pay attention and choose wisely only after evaluating the given choices. It is advisable to not take clubbing life insurance with investment and rather go for life insurance policy alone.
- Policy Claim – The only purpose of taking up a life insurance, eventually, is to keep your family away from financial problems after you. This can only be done if you know the procedure the claiming the policy. The procedure to claim the policy should be quick and hassle free.
- Maturity claim – You should have clear understanding of the consequences if the policy matures before the death of the individual. What all benefits will he be getting and how to claim them.
- Type of the Policy – Now, policies are of two type – Convertible and non-convertible. Check the nature & type of the life insurance policy before making the buy. If it is convertible, know the convertibility clause. If the policy is convertible, extra charges have to be paid and there is a time limit.
- Know your rights as a policyholder – Being a policy holder, you are entitled to some rights. Before you finalize the policy and sign the insurance documents, have a look at the rights you have got being the policy holder. Red the terms and conditions of the policy carefully and do not miss out on any point. Make the best use of the 15-day free look period and if you ever feel the policy was mis-sold to you or the terms and conditions of the policy are not acceptable, return the policy within the free look period itself.
Life insurance is not something that you cannot discontinue, you can just free yourself of it whenever you want and claim your money. Therefore it is very important to not compromise on anything when it comes to choosing a life insurance policy and identify the pros and cons while purchasing.
However, if there is any financial crunch, you have the option to make the partial withdrawals or take a loan against the existing policy.