Life is unpredictable and you never know what situation you may find yourself in. While you cannot plan for everything, having financial security does help you tide over unexpected times. It also gives you stability and peace of mind as it enables you to plan for large expenses like a house, a vehicle, or education.
Insurance is a kind of investment that helps you secure your future. It helps not only you but also your family by setting aside some amount for their future well-being. Before you start looking for the best life insurance policy in India, there are some things that you should know about a life insurance policy. Let’s look at the five main things that you should keep in mind.
1. Inform your family
You have the best life insurance policy in India and are sure that your family’s future is secured but do they know about it? Always ensure that your family members know about the policy. A good idea would be to keep the policy document in a place where everyone can access it.
Since the policy is aimed at securing your family’s future, ensure that you walk them through the policy. Tell them about the policy number, insurance amount, and what kind of policy you have taken. A great tip would be to note all the important details somewhere where your family can easily look up the details. You could make a note in a digital diary or create a document on your home computer. This helps your family in claiming the money that is due to them without any hassles.
2. Look for high sum assured
While there is no number that can give you the actual value of human life, you do need an estimation of the amount of money you want to leave for your family. Always make sure that you opt for higher life insurance as that ensures that your family is well taken care of when you are gone. Even if you have the best life insurance policy in India, you have to see if it is accurately calculating your human life value.
There is a simple way to judge the amount of insurance. Typically, we would look at how much the person is earning and when they plan to retire. For instance, if Mr. X, aged 30, earns Rs 10 lakh per annum and plans to retire at 60, then the sum that he should aim at is Rs. 3 crores (10 lakh multiplied by 30). This is a simplified way of looking at this, you would also need to account for inflation and any hike in your salary to arrive at the value.
Taking insurance that assures you a sum at the higher end helps your family maintain their current standard of living. This is why it is very important to take a hard look at the assured sum of the life insurance policy.
3. Do your research before buying
This is very important as all policy sellers will tell you that they are the best life insurance policy in India. However, before you buy the life insurance policy, you need to do your research and ensure that it aligns with your financial goals.
Since your family’s future is at stake here, make sure you know the policy thoroughly. There are a few things that you need to look out for in particular. These include the human life value, why you want to insure, the type of life insurance policy, affordability, and the ease of policy servicing. In addition to these, also look at the claim ratio and how the linked funds are performing.
4. Know your needs before you invest
While all agents will claim they have the best insurance policy, does it align with what you want? This is the first thing you need to know. People take out insurance for a variety of reasons- safeguard their family’s future, education expenses, retirement planning.
After you identify why you need a life insurance policy, you can look for the best one for your needs. There is a range of life insurance policies that cater to different needs, and it can be easy to get lost in the information if you don’t know what you are looking for. Look at different online resources like life insurance explained to get a better idea of its finer points.
5. Make regular payments
Once you decide on the policy, ensure that you make regular payments. Simply having the best life insurance policy is not enough to secure your family’s future, you will need to actively invest in it.
Ensure that you keep on track with the payments and avoid a lapse of your policy at all costs. Remember that you are investing in your future and ensuring that your family is taken care of when you are gone.