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Things to consider while choosing a Life Insurance

2 min read

Choose life insurance hassle-free

Planning to choose a life insurance policy that will take care of your or your loved ones’ needs? Here are a few points to keep in mind.

Shopping for a life insurance policy requires careful consideration as it is a crucial purchase intended for the protection of your loved ones in the event of your untimely demise. Life insurance is typically a sum paid out to the beneficiary in the event of death of the insured person. It helps you protect your family and give them the freedom to live life with basic comforts and maintain the lifestyle they are used to, even when you are not around.

Insurance companies typically offer add-ons on basic life insurance policies to cover the different needs of people who come from different walks of life and have different sets of requirements. So, choosing the correct policy and add-on (if needed) is essential. 

 The following tips will help you to zero in on the correct life insurance policy:

Identify your needs

1. Your income 
2. Your debts and other liabilities, especially if your assets are encumbered 
3. Ensure that your dependents can carry on with a lifestyle that they are accustomed to
4. Cater to some additional needs over and above what the above mentioned pointers cover

A careful analysis will be required to arrive at a magic figure that will cover all the above. Bear in mind that the lower your age, the lower will be the premium you will need to pay. Availing the help of an insurance agent who can advise you on the ideal insurance amount can be useful too.

Type of Insurance

Zeroing in on the right kind of insurance plan is important to meet your needs right. So, for example, term insurance will provide protection for a predefined period and the sum insured will be offered only in the event of untimely death of the insured during the policy period. However, if the insured survives, no benefit will be offered to the people who are covered.

On the other hand, an endowment plan will offer you a benefit post maturity of the policy, equivalent to the sum covered, even if the insured survives the policy period. 

A whole life insurance plan covers the insured all throughout his life. Typically, under this policy, the sum assured is offered in the event of death or after the applicant reaches a certain age.

Under money back plan, the nominees will receive the sum assured in the event of untimely death or will receive the amount of premiums along with some bonus in case the insured survives the insured period.

A Unit Linked Insurance Plan (ULIP) offers a combination of benefits in terms of insurance coverage and savings. The amount created by the ULIP investment in equity or debt is the maturity value paid if the insured survives the policy period.

Needless to say, a term insurance plan is the most affordable plan that provides basic coverage. However, if you are looking at life insurance as a vehicle for long-term savings and are willing to go for a higher premium, it is beneficial to opt for the whole life plan.

Compare the insurance policies

Once you have decided what type of insurance policy is suitable for your needs, choose a platform to compare different insurance policies. The following factors should be considered while picking up a plan:

1. Affordability of the annual premium
2. Your current age and upper cap on age limit 
3. Claim settlement ratio of the insurance company
4. Credibility and popularity of the insurance company, i.e., whether it adopts fair policies to assess your health while determining the premium amount

Apart from the pointers discussed above, it can also help you to know that InstantPay’s inclusive banking feature makes it easy to apply for life insurance online. Moreover, you can pay your premium from the comfort of your home and on time. To conclude, assess your needs and budget well and compare various life insurance types before you make a decision. 

InstantPay InstantPay is India’s largest Neo Banking platform delivering full-stack banking services to individuals and businesses of all sizes.