10 Tips to Help You Find the Best Life Insurance Plan for Yourself

1. 10 Tips to Help You Find the Best Life Insurance Plan for Yourself Created by John White

2. 1. Assess your life insurance goals Goals may vary from person to person. You must plan for your life insurance goals with the help of a suitable life insurance policy. If safeguarding your family’s financial security is your primary goal, you can buy a term insurance plan that offers a high coverage at affordable rates.

3. 2. Calculate the optimal insurance cover that you need Many financial advisers suggest that your life insurance cover should be at least ten to fifteen times of your annual income. However, there are several elements that you should consider while estimating the ideal life insurance amount. If you have debts, then meeting the Equated Monthly Instalments (EMIs) might be challenging for your family in your absence. In addition to this, you need to arrange funds for your children’s higher education or marriage. As a result of inflation, your family might also face difficulties in maintaining their current lifestyle in the absence of the principal breadwinner. 

4. 3. Determine the amount you have to pay as the premium and find the policy offering the best deal You can use online premium calculators to ascertain how much premium you have to pay for the required amount of life insurance. Compare different plans to find a policy that offers the highest coverage at rates that fit your budget. You should also assess your premium paying term based on your earnings for the upcoming years.

5. 4. Select the correct policy term The term of the policy should ideally be the number of years your family will be financially dependent on you. The general thumb rule for deducing the ideal policy term is to subtract your current age from the age at which you expect your income to stop or wish to accomplish a particular life goal.

6. 5. Opt for a reputable life insurance provider Life insurance companies with a Claim Settlement Ratio (CSR) of over 95% for consecutive years are generally considered reliable. The CSR is the percentage of claims that the company has settled in a financial year compared to the number of claims placed. It is also advisable to read customer reviews and understand whether your life insurer's claim service is fast and hassle-free.

7. 6. Do not conceal facts from your life insurance provider If you consume tobacco or alcohol, or work in a hazardous industry, inform your life insurer about these details. You must also declare any existing illnesses or family history of critical ailments. These factors influence your risk profile. Providing accurate information is vital to prevent claim rejection in the future.

8. 7. Read the final policy document carefully Understand all the terms and conditions clearly, before you make the final commitment. Find out relevant details such as the lock-in period and the circumstances in which the claim will not be valid.

9. 8. Buy life insurance at an early age Life insurance premiums are lower when you are younger. Thus, you can save on the cost of your premium if you buy your life insurance policy as soon as you start earning. You can begin with lower coverage and add more riders as your income increases.

10. 9. Choose a comprehensive plan Medical contingencies might affect your income adversely. Hence, it’s necessary to choose a comprehensive plan, with appropriate riders for yourself.

11. 10. Evaluate your life insurance needs regularly It is essential to assess your life insurance needs from time to time as your financial goals might change with age and life events like marriage or childbirth. You can review your life insurance needs periodically and adjust your cover accordingly. This will also take care of inflation.

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