If you were to describe your life in one word, how would you do it? Would you call it unique, a struggle, or simply,satisfactory?
No matter what your life means to you and the ones around you, it will always be a mystery because it is uncertain. Sometimes you will feel equipped to handle its curve-balls;other times, it may catch you off-guard. You can have tons of savings, a good corpus of funds, a secure life in general, but what if something happens to you? The life that seemed so great just a few minutes ago would suddenly come to a grinding halt.
This is why it is essential to have long term investment plans that take such uncertainties into account and provide adequate cushion to soften to blow.
Did you know that timely and wise investments can be beneficial in protecting your finances?
If you want to navigate life with the confidence of a skilled driver, then what you need is reliable life insurance that will take care of you, while you are there, and then your loved ones when you are gone.
Long term investment plans are crucial in safeguarding you and your family against the unforeseen circumstances. The good thing is that the process is relatively simple.
To help you make the right decision in buying the most suitable life insurance online, we have put together a cheat sheet for your benefit.
- Compare life insurance policies
Life insurance policies are long term investment plans that are basically of two types – term plan with return on premium insurance and pure term insurance. So, when you want to buy life insurance online, you need to understand the difference between these two and the benefits offered by each.
If you are looking for cheap life insurance, then term insurance policy is the perfect instrument that will give you a large cover for a smaller premium. This type of insurance provides comprehensive financial security against certain events such as accidents, critical illness, or untimely demise, allowing your family members to move on and live a comfortable life, even in your absence. The term plan with return on premium policy, on the other hand, comes with an added advantage of maturity benefit where you can avail the sum assured if you outlive the policy tenure.
Understand the different long term investment plans, compare them as per benefits, features, and other such aspects to narrow down your selection.
- Check for the Claim Settlement Ratio
If you are looking to buy life insurance online, the most critical check you can perform to assess the quality and integrity of an insurance provider is to verify their Claim Settlement Ration. This figure reflects the number of claims settled by the insurer out of the number of claims filed in a given year. This figure is revealed by the Insurance Regulatory and Development Authority of India. The bigger the number, the better it is for the insurance provider. For example, reputed insurers such as Max Life have claim settlement ration of 98.74% that indicates a high possibility of receiving the sum assured when your nominee files for a claim.
The primary purpose of buying an insurance policy is to be compensated by the insurance company in the event of a misfortune. An insurance company with a claim settlement ratio in the high 90’s will help ensure that your family receives the necessary support in times of crisis if you have held your end of the bargain, i.e. made timely premium payments.
- Use a Life Insurance Calculator
Once you have thoroughly assessed the available long term investment plans, your next step should be to use the online calculator to determine the premium amount that maintains balances between sum assured and the amount you can afford. If you need a large insurance cover, then it is better to invest in a term insurance policy.
The premium of pure term insurance is usually lesser than the term plan with a return on premium. However, if you can afford higher premiums at a later stage, it is always possible to upgrade your policy or add additional coverage with the help of riders.
- Review the Claim Payout Options
In case of an untimely demise, the insurance company will disburse the coverage amount to the nominee you nominated at the time of buying the policy. This is the reason you must choose the policy duration carefully and buy life insurance online as soon as possible.
The premium amount of your policy depends on the payout option. Some term plans offer regular monthly payments or a lump sum amount,depending upon the payout option you chose at the time of buying the insurance. Therefore, you must evaluate the needs and lifestyle of your family before investing. This will help you select the correct payout option.
- Check for Rider Options Available
If you want to enhance the scope of your life insurance, then you must look at rider options that can be added to your policy for a small amount of premium. These riders are of considerable value when added to a basic term plan.
Riders are a perfect tool to customize a policy to your needs. Choose the add-ons wisely to meet different purposes such as accident, critical illness, and income benefit, among others.