Analyze Before Buying a Life Insurance Policy

A life insurance policy should never be bought in a rush. It's a decision which will have an effect on the future of your loved ones and you will never wish to compromise with that. A right insurance policy is an outcome of well analyzed factors and needs. With the increasing demand and changing needs of people, life insurance policy has also evolved through many stages. There are innumerable life insurance policies available in the market with a variety of benefits to choose from.

So, through this article, we will try to understand the things which you need to analyze before buying a life insurance policy.

Your financial profile

The first thing which you need to analyze is your financial requirements. A well analyzed financial requirement will help you to choose the best life insurance policy for you. You should analyze your current asset, annual income, future obligation, loan and debts, expenditure and lifestyle before buying a policy. It will also help you to choose the right amount of cover for your life insurance policy and will make you plan your financial goals in a much planned and easy way.

Type of life insurance policy you need

You also need to analyze the type of life insurance policy you need because life insurance policy is no more limited to whole life and term insurance plan. You have following options of life insurance policy to choose from:-

• Term insurance Plan

• Whole Life Policy

• Endowment Plan

• Unit Linked Insurance Plan

• Money Back Policy

Every life insurance policy offers different benefits and you need to choose the right one for you. Your reason for buying a life insurance policy will help you decide the type of life insurance policy you need. If you are buying a life insurance policy as a risk management tool against loan and debts in addition to your life cover, then term plan will be best for you or if you are looking for an investment option with your life cover then a Unit Linked Insurance Plan will be perfect for you.

Insurance companies

There are almost more than 20 IRDAI certified life insurance companies in India and you need to choose the most trustworthy life insurance company for ease of buying and managing your insurance policy. You can analyze the different insurance companies on the basis of their service (during and after buying a life insurance policy), claim settlement process, claim settlement ratio, product portfolio, etc. Due to the availability of various IRDAI certified insurance web aggregators in India, comparing insurance has become very easy. All the insurance web aggregators provide you a very easy and unbiased comparison between various companies and policies. You can also check the review of different insurance companies on their website.

Option of life insurance policies available

Along with the insurance companies, analyzing the various life insurance policies available in the market is also very much necessary. Choosing the right life insurance policy will help to get maximum benefit from it. You need to analyze different life insurance policies on the basis of premium amount, exclusions, inclusions, sum assured, etc. Life insurance policies are as unique as a person. Everybody has a different requirement and condition and the purchase of life insurance policy should be a decision based on well analyzed factors. Never buy a life insurance policy because it beneficial for someone you know. Analyze your needs and situation, and then filter your search by comparing different life insurance policies through the company's website or insurance web aggregators.

Amount of cover

Choosing the amount of cover is a very crucial step while buying a life insurance policy. Even after buying the best life insurance policy, if you will not choose the right amount of cover, then it will become useless when you will need it the most. The basic objective of buying a life insurance policy is protection against unfortunate event like death or accident. Now imagines a situation where you find that you are underinsured at the time of claim or maturity. Not only being underinsured can lead to a difficult situation, but being overinsured will also become a financial burden for you. So analyze your asset, liabilities, future obligations and annual income before buying a life insurance policy, so that you can choose the right amount of cover for yourself.

Benefits offered with the policy

Life insurance policies come with numerous benefits and every policy offers different benefits. In addition to cover for life, a life insurance policy offers you riders, increase in sum assured at important stages of life, simple revisionary bonus, compound revisionary bonus, terminal bonus, etc. You should always analyze the benefits of life insurance policy which you are buying. Never buy a life insurance policy because it has a long list of benefits to offer, but always choose a policy which offers benefits which are useful to you.

Even if the process of buying a life insurance policy has become very easy and quick, still you need to give some time for choosing the right life insurance policy for yourself. A life insurance policy bought in a hurry can become your biggest mistake of life. So analyze the above mentioned factors in the article and choose the best life insurance policy which will give you the right cover with peace of mind.