There are several combinations and types of life insurance policies available for a policyholder to choose from today – from a personal term plan to a group term life insurance there are many online resources that are evolving with measurement metrics to help compare plans across insurance providers and their best customisable versions.
Since markets are full with plans, costs and variables; a new policyholder can feel intimidated by the details and clauses respective life insurance plans. However, buying life insurance can be relatively simple if an investor has adequate clarity about their own finances and requirements beforehand. Before we move forward, you must be sure of some basics, such as life insurance meaning.
Understanding Life Insurance Plans
Life insurance plans can be defined as an insurance instruments which enable the coverage of the needs of the insured and their dependents through an assured benefit sum in the event of the policyholder’s demise. A standard life insurance policy in India is considered to be one of the most affordable means of securing one’s future where premiums are low and one can customise their coverage and payout methods as per their convenience.
Buying life insurance is a fundamental necessity for a person today. It helps a person build and protect their finances in a way that sustains them not only in the present but also in the future. Life insurance plans are one of the ways to achieve that security, where a person is able to ensure the protection of those dependent them; by choosing to insure themselves in the event of their death or illness.
Since life insurance is an important process and requirement, it helps for first-time policyholders to make an informed choice and find a plan best suited for their needs. Therefore, let us look at some ways to choose the best life insurance plan:
- Understand Your Life Insurance Goals: Insurance plans are driven towards helping policyholders prepare for unforeseen situations and expenses in the future by dedicated benefits and payouts for the same. It is a source of great relief and security for an investor and their dependents to know they have a financial cover in vulnerable times.
Life insurance plans are also designed to help people become more adept at managing their finances and being equipped with financial literacy that can help them plan their future through ideal investments. A policyholder and their dependents are able to fulfil all financial goals such as education, asset purchases, and marriages without exhausting their savings, even in the event of the policyholder’s death.
Therefore, before buying a life insurance plan, a potential policyholder should duly understand the features of their plan. Insurance plans therefore they are beneficial to potential policyholders seeking adequate coverage for their dependents. Foreseeable dependents such as children and spouses and their costs should be considered while asking for life insurance quotes.
- Assess How Much Cover You Would Need: It is the benefit, or assured monetary guarantee that a policyholder is given at the time of the purchase of the policy. Life insurance plans and the coverage they offer are determined on the basis of various fields such as age, income, assets, liabilities, and existing cover. A life insurance calculator calculates a coverage amount that is adequate to cover the debt expenses an investor may leave behind, and any additional financial liabilities their beneficiaries may have.
In case a policyholder seeks additional coverage, with a nominal amount paid over the existing premium plan, a policyholder can expect to secure the additional cover provided under various riders that are made to protect the policyholder from situations apart from death.
There are riders available in term insurance for situations such as Accidental Death, Critical Illness, and Disability.
- Premiums: Life insurance plans offer coverage and future benefits to policyholders of all kinds. This coverage is supported by a nominal premium payment by the policyholder at a predetermined frequency (monthly, bi-annually, single premium etc.) These premiums are essential and have to be maintained by the policyholder as per the requisites of their plan and cannot be lapsed on. However, the more complex a plan is, the higher the premiums for them are. One can use a life insurance calculator to get an approximate idea of premium rates for their deal life insurance plan, before purchasing.
- Payout Plans: For the aforementioned sum benefits, there are options available for prospective life insurance plan policyholders to choose their payout method as the beneficiary may not find it suitable to receive a large influx of money and manage it as per the needs of the family. They may benefit more from the lump sum being converted into a monthly, quarterly, bi-annual, or annual income as per their requirement.
- Opt for Reputable Insurance Providers: As goes for any insurance or investment plan, it should be bought after adequate market research. Since there are a variety insurance providers in the market, which have their own provisions as per their provider; an investor should compare across all plans and providers and go with the most reputable and secure provider.
Max Life Insurance and its life insurance plans are dedicated to mitigate any possibilities of financial distress for a policyholder and their dependents in unforeseen situations. Reach out to our financial advisors today and find the best suited life insurance plan with all requisites and security you may need in one space.