5 Things You Should Know Before Investing In Life Insurance

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5 Things You Should Know Before Investing In Life Insurance

Today nearly everybody knows the importance of life insurance. When a person dies, it proves to be lifesaver for the loved ones left behind. There are various ways adopted by individuals for buying life insurance policies. A number of people call agents for help while others do it themselves online. These are 5 things you should know before investing in life insurance.

The amount of cover you need

Don’t invest in life insurance merely because somebody has recommended to you that you do so. When you’re aware of its importance, the first thing is to calculate the amount of insurance the family would require to maintain the same lifestyle after your death. There’re online tools that will help you with this. You can calculate the needed insurance cover relying on expenses.

Life Insurance
Life Insurance

Claim settlement record of the insurer

Once you’ve made a decision to invest in an insurance policy, you should shortlist the best providers to purchase from. There are several insurance companies. A number of them are renowned for service, while others derive their popularity because of advertisements. But your concern should be their claim settlement records. It’s the ratio of the amount of claims settled to number of claims received. You might also consider comparing and contrasting other features like service and premiums among others.

The type of policy you require

You should decide on the reason why you are investing on life insurance in the first place. Buying a term plan is advised when the reason is for protection. But there are several other plans that are available for those individuals looking to invest and insure themselves. You might select one of the following according to your requirements: endowment, money back, whole life, ULIP, annuity among others. When you require some equity exposure, then you can select unit-linked insurance plan, or ULIP and you are going to stay invested for a long period of time. On the other hand, you can choose whole life option when you need protection for entire life.

If you already have insurance

You might have bought life insurance already some time back. Prior to investing in another policy, you should find out how much that you’re insured for already. There are instances where employers offer life insurance to their workers. You should also consider this. Then you would deduct this from the entire insurance amount required. Then you might aim for a cover based on the extra cover needed.

Whether to buy offline or online

Online insurance industry today has considerably improved in the last couple of years. The reason may be because of increased internet penetration, or investor awareness. Basically, this has done a lot of good to the client or consumer. Well, online policies are cheaper as compared to the offline ones since it involves no agents. But when you are that person who does not like to go with the do-it-yourself approach, you can choose the offline route. Agents also may be helpful when it comes to settlement of claims. The online option is advised since it’s cheaper compared to its offline counterpart.

Investing in life insurance is crucial for an individual because of the various benefits it provides. But before buying your life insurance, ensure that you have your NI number for it acts as your personal account number as far as insurance matters is concerned.

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