Confused about buying a Life Insurance policy? We have answered five frequently asked questions to help you get started. Read on.
Life Insurance is one of the most important decisions you make. Nobody knows what the future holds, and if something were to happen to you in the future, it could have an adverse impact on the financial well-being of your loved ones.
If you’re in the dark about whether to invest in a Life Insurance policy or not, we have answered a few commonly asked questions to help you get started.
Do I really need Life Insurance?
A Life Insurance policy provides a safety net for your family if something were to happen to you in the future. So, if you are single with no dependent, you don’t need a Life Insurance policy. But if you are contributing towards your family’s finances, you must take into account any unfortunate event that can hamper your family’s financial well-being when you are not around. Life Insurance fills the gap and ensures that your family continues to maintain the same lifestyle even when you are not around.
Additional Reading: Common Exclusions Of Life Insurance That You Should Know About
When is the right time to buy Life Insurance?
Ideally, the best time to get Life Insurance is when you are young, healthy and financially independent. It’s easy to put off buying Life Insurance when you are young but, procrastination is likely to cost you dearly, later. Life Insurance premiums are directly proportional to your age, so as each year passes, a policy becomes more expensive. Therefore, it’s smart to buy a Life Insurance policy today.
How much cover do I need?
Determining how much Life Insurance cover you need can be a little tricky. Before you take a call, it’s important to keep in mind that Life Insurance is a tool that will help your family set up an alternative income stream and meet their financial goals even when you are not around.
Going by the rule of thumb, one should have a life cover which is at least 10 times of your annual income. But Life Insurance needs are also governed by other factors like age, income, assets etc., and consequently the one-size-fits-all approach doesn’t work. Also, make sure to review your insurance coverage every few years as needs tend to differ at different stages of life.
Can I customise my Life Insurance plan?
Life Insurance plans mainly act as an income replacement tool and provides protection in case of an unexpected and early death of the earning member of the family. However, there are instances when you might face other unforeseen risks like disability for which your term plan doesn’t provide you with any protection.
That’s when riders of Life Insurance plan comes in handy. These riders provide a financial cover over and above the basic sum assured and helps you customise your policy according to your needs.
Read more about Term Life Insurance riders here.
Tips for buying Life Insurance
Here are a few important tips to keep in mind before getting Life Insurance:
- Understand your needs
Before taking a plunge to buy a Life Insurance policy, sit down and make a list of your few basic requirements and needs. For example, for how long do you plan to work, how much cover will be sufficient, how is it going to help your family etc.
- Don’t forget to compare
This might sound time-consuming but trust us, comparing various plans offered by different insurers will ensure that you don’t get trapped in a policy you don’t need. So, take your time and do a thorough research before taking your pick.
- Don’t ignore the terms & conditions
Once you are confident about the product, make sure you go through all the terms and conditions. Get every little detail and facts about the product and the company. Invest your time now to avoid any nasty surprises later.
If you’re still not convinced, here are 8 reasons why you should buy Life Insurance today.
Now go ahead and explore your options right away!