Life insurance is one of the most popular tax saving investment options in India. It is considered to be one of the most secure and simple investment types. Let us checkout some of the most important facts which an investor must keep in mind before buying a term plan.
What is the claim settlement policy?
People buy term insurance to secure the future of their family members and also to help them get a lump sum amount at time of exigencies. So, when buying a life insurance policy, check out the claim settlement policy. It must be simple and quick so that the money can be withdrawn in very less time.
Why you need a life insurance?
Every individual has a unique need and you must be sure about the reason as why you need an insurance policy before buying one. A term insurance policy should be tailor made to meet your requirements. For example- if you are saving money for your child’s future the life insurance policy will differ from the plan which is meant for retirement and wealth creation. There are some life insurance policies which can provide protection and life cover up to 75 years.
Is the premium affordable?
It sounds great when the term plan promises you to provide a large sum assured with a whooping amount of interest at the maturity of the life insurance policy. But how much is it charging for the same? Generally, the premium which you pay is directly proportional to the sum assured. So before choosing a life insurance plan check how much you can afford to invest.
Are there additional protections available?
Some life insurance policies provide the amount only at the end of the term or at the death of the investor. Some policies come with additional benefits like accidental death benefit (this offers additional sums to the dependents if the investor dies in an accident) and total or permanent disability (waiver is provided on the insurance premium.) Choose one which can offer the best protection to your family members during crisis.
Are there any hidden charges?
Are you paying as much as you were informed? It is utmost important that you verify all the charges, interest rates and taxes which you need to pay along with the premium amount.
Is it worth an investment?
Life insurance policies serve multiple purposes. Standard term insurance policies offer tax expedition under Section 80C. These insurance policies should also help to create enough wealth for the future. Another aspect you must keep in mind is the brand value of the insurance company. Choose a company that has a higher Claim Settlement Ratio. This refers to the ratio of claims which the company have settled as compared to the number of claims received by them.
Does the company have enough service points?
Choose a company which has a good network and enough branches so that they can be contacted anytime, anywhere.
Still want more clarification? Every bank has a life advisor who can help you buy the most appropriate life insurance.