Cover drive: take out life insurance
Indians are known to bargain hard before spending money on a purchase. We evaluate the features offered by various retailers and service providers in the same price range before making the final decision. For example, when we buy a house, a car or a phone, we do a thorough analysis of the market before reaching a conclusion.
Likewise, when it comes to taking out a life insurance policy that requires a long-term financial commitment, it is imperative to compare the benefits and features offered by the different products and to ask the right questions to them. advisers before taking the final step.
An effective insurance plan will help us protect our loved ones and achieve their dreams and goals in all circumstances. It will act as an effective seat belt, ensuring our peace of mind and allowing us to focus on our day to day life.
But what are the factors we need to focus on before purchasing a life insurance plan so that they meet our needs.
While term insurance is universally suited as a savings product, depending on the current stage of life, the ability to take risks and long-term future financial goals, knowing the category is of the utmost importance. of the product we wish to purchase.
To this end, let us note the various parameters that we must consider before taking out a life insurance plan.
Appetite for risk
As in most other industries, the consumer is spoiled for choice when it comes to choosing a life insurance policy.
A young person’s ability to take risks is far greater than that of someone nearing retirement. As there is no one size fits all, the specific needs of individuals require specific insurance solutions. It is essential to diversify our assets into a mix of traditional and Ulip products to meet these individual needs.
Life insurance companies offer products in which customers only need to make one payment, that is, a single premium. Other options include regular premiums for the life of the policy or for a limited period of time. Knowing about cash outflows can help clients better plan their finances.
Unfortunately, everything in our lives can change in seconds. Changing lifestyles and genetic factors are increasing cases of serious illness.
Accidental deaths are also on the rise and it is essential to protect yourself and our families from the repercussions of unfortunate events. Therefore, it is essential to focus on additional endorsements such as critical illness and accidental death benefits when purchasing life insurance products. These endorsements provide for immediate payment of claims, which provides much needed relief.
Fund performance / premiums
Information about where your money will be invested over a long period of time is important to the buyer.
Traditional life insurance products invest largely in fixed income assets that are less subject to market volatility and offer stable returns over the long term.
Unit-linked insurance plans give clients the flexibility to choose the investment strategy that best suits their long-term financial goals and risk appetite. It should be noted here that a unit-linked contract has an immobilization period of five years.
The performance of funds and bonuses can be periodically verified by clients through the available online portals.
Trust is a non-negotiable part of life insurance. Anyone who is considering purchasing a policy must first determine the insurer’s confidence quotient.
In addition, they should assess customer service metrics such as the claims settlement rate, which is the number of claims paid by the insurer compared to those received by it in a given fiscal year, as well as consistency of the claims settlement rate of recent years.
Don’t limit yourself to that, you should dig deeper and compare the experience of settling claims – what is the turnaround time when it comes to settling claims in the event of death or maturity and whether the process is smooth and hassle free.
Buying a life insurance policy is an important financial decision that requires careful consideration before making the final decision. The above mentioned questions in the article are essential and getting these questions answered will ensure that you have made an informed choice when purchasing life insurance for the safety of your loved ones.
The author is Director of Distribution, ICICI Prudential Life Insurance Company