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Dont Just Compare Life Insurance Policy Premiums

20 June 2022, 2:38 PM

When looking to buy a life insurance plan, you should focus on your requirements and needs and then choose a plan that is appropriate. Everyone has different life requirements. This is why you need to assess your own needs, do some research and then buy a suitable life cover. Many people make the mistake of buying the first and cheapest plan that they find. This is a very big mistake that you should avoid making at all costs. If you just look at the policy premium, you may miss out on the other important factors such as the coverage and riders. Take a look at this article to know why you need to wholesomely compare the life insurance plans and what aspects to look out for before you buy your life insurance cover.

Points to Consider When Buying Life Insurance

As mentioned above, you need to take a 360-degree look at the plan before making a purchase. Here are some pointers:

  1. The Volume of Cover 
    The value of the sum assured in a life insurance plan plays a very crucial role. It is thus necessary for you to do the calculations properly and arrive at the correct number. For this, you need to see how many dependent family members you have. If you have a large family, you will need a larger cover and vice versa. The policy premium will depend on this, but you should not compromise and choose a smaller cover with a smaller premium if your requirements are larger. Make sure you have enough life cover so that your loved ones do not face any financial challenges if you die unexpectedly. 
  2.  Investment Opportunity 
    The next factor to consider is an investment component. As we all know, life insurance is a combination of insurance and investment. Most life insurance variants, except a few such as term insurance, offer an investment opportunity. When you pay the life insurance premium, a part of it gets fixed in a life fund. The remaining is used for investing in the money markets. You should therefore very carefully choose the policy and the premium so that your investments happen properly as and per your plans and requirements. 
  3. Payout Structure 
    Next, you need to focus on the payout structure that your policy offers. Choose a good life insurance plan that has a flexible payout structure including options such as the staggered payout, lump-sum payout, etc. Unless your policy is flexible and offers your family the proper death benefit payout option, they may not benefit greatly from the plan after your demise. Keeping this very important factor in mind, ensure you have the best plan with all the proper payout options available.
  4. Affordability 
    While we do want the best plan with the highest sum assured, we all need to be realistic and take a good look at our own financial health before choosing a life insurance policy. You need to determine a budget and then look for plans within that range. While the premium is definitely the only factor to consider, it does play an important role, so always remember to choose a good life insurance plan that you can afford and easily pay the premium on time.
  5. Insurer’s Reputation 
    And finally, you need to take the life insurance company reputation into account before you choose any plan. If a plan offers some great features, but the insurance provider has a low claim settlement ratio, stay far away from that policy. Also, take the customer support system, digital presence and other factors into consideration when choosing your insurer. Unless you have a good insurance provider, you will not be able to get the best value out of your life insurance coverage.

After you understand what each plan offers, choose your ideal cover by running a correct comparison. This will help you in finding the best life plan at the best rate.

Comparing the Correct Type of Insurance Plans

As stated, life insurance is available in various forms. You need to analyze your needs, decide which form of life insurance would be ideal for yourself. Let us assume you find the term insurance plans to be best suited, then you need to compare between the term insurance plans only. It is very easy to compare and you can do it online in just a few minutes. However, to get the best and the most effective results you need to compare in the correct manner. Start off by knowing exactly what you want and the remaining steps will become a lot easier.

In a nutshell

Life insurance is a very important investment. It protects your life and assures the financial wellness of your loved ones after your demise. This is a very important assurance and so you need to find the life plan that offers the best coverage. Keep all the points mentioned above in mind and then get your ideal cover and you won't face any problems whatsoever.

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