Life insurance is the most common and safest way to protect your family against life’s uncertainties, earn returns on your investment, and achieve long-term as well as short-term financial goals. There are different types of life insurance plans that cater to different needs and objectives. Such as term policy that provides pure life cover to the insured or a Unit Linked Insurance Plan that gives you a combination of investment and insurance if you are looking for wealth creation opportunities.
With the right life insurance plans in your financial portfolio, you will be able to meet your financial goals and also overcome unwanted emergencies to keep your loved ones secure. A robust policy will not only provide the needful security cover but also allow you to make good returns in the long run.
Therefore, Life insurance plans are an integral part of your investment portfolio because it helps in providing your family with financial security in case you are not around anymore.
However, to make the policy achieve its objective of providing adequate financial support, you must choose the right duration and coverage amount. Many such factors together contribute to the decision to choose the best life insurance policy plan.
Don’t make the rookie mistake of getting attracted to low-premium life insurance plans without taking the other aspects into account. Necessarily, the calculation of your life insurance must begin with the analysis of your future goals and then buy the plan that helps you in getting the protection you are looking for. Ideally, the policy that you choose should safeguard your family’s financial health in case of emergencies.
Here are some factors that govern your choice of a life insurance policy plan –
One of the leading factors that can significantly influence your life insurance premiums is your age. This is the reason; financial advisors recommend you to buy life insurance plans as early as possible. When you are young, you can not only benefit from lower premiums but also get the most extended policy term that can give you a solid return on your investment by compounding interest.
Besides, as a young investor, you are a low risk to your insurance provider who is more than willing to offer you attractive premiums just to earn your business. So don’t think that 20s is to start planning for your mortality early. It is an inevitable reality, and the sooner you plan for it, the better it will be for you.
Another important factor when choosing a life insurance policy plan is the premium. Since life insurance is a long-term product, it is essential to buy a policy that you can sustain throughout the policy term. Failing to pay the premium will render the life insurance inoperative and will be a waste of money that you have invested so far.
So be sure to use the online premium calculator to check the premium and choose the one that you can regularly pay without affecting your lifestyle.
Ideally, the coverage amount for your insurance policy should not only cover all the future lifestyle expenses and liabilities but also cover long term debts such as home loans or education loans. So when you are coming up with the cover amount, take note of all your existing debts and future liabilities to select the right cover amount that provides adequate coverage. Make sure that the death benefit from your insurance will be able to cover all loans at any point of time.
Number of Family Members
Don’t forget to account for the number of dependents you have and the financial support they are going to need once you are not with them. In case something unfortunate happens, then how much money are you going to need to pay for your child’s education, your spouse’s lifestyle, and your parents’ comfort.
When you are looking at life insurance plans, you need to understand your requirements and your family’s financial needs to make the right investment decision. Discuss with your family members about your decision to invest in life insurance policy plan, take their inputs for defining your life goals, and then decide if you need a term plan or a whole life insurance plan. A term plan is cheaper but only covers you for a specified period. A whole life plan will provide you with cover for your entire lifetime.
Now that you have made up your mind about purchasing the right life insurance plan, you should compare different insurance plans online. Online insurance plans from reputable insurers such as Max Life Insurance enable you to make an informed buying decision by reviewing, comparing and selecting policies that provide maximum benefits at cost-effective premium amounts. These plans also allow you to make the purchase quick and hassle-free.