When you buy new life insurance plans, you must know that while the insurance market is filled with very enticing policies offered by many renowned providers, not every policy will suit your needs. Make sure the policy meets your specific requirements if you want to maximize your investment. But what fundamental factors should be taken into account when buying a life insurance policy?

Criteria For Selecting Life Insurance Plans:

1) Premium That Fits Your Budget And Ensures Adequate Coverage

The premium, a set amount you must pay to maintain the policy, is one of the most crucial components of life insurance. You must pay the life insurance company in order to guarantee that you and your nominee receive payments when they are due, including a death benefit if you pass away while the policy is still in force. Your policy will expire and you will stop receiving the benefits if you don’t pay your premiums on time.

The premium is directly influenced by how much coverage you get. Higher-priced plans typically come with more coverage and vice versa. Therefore, when choosing a policy, you should think about whether the coverage is sufficient and whether the premium fits your budget.

The numerous life insurance tax benefits that come with a policy must also be taken into account.( Tax benefits may change as tax laws change.)

There are two different income taxation systems, as you may know. Taxpayers can choose between the new and old tax regimes based on their benefits. This will determine the life insurance tax benefits they will be eligible to avail.

The finance minister left it up to taxpayers to choose between the new and current regimes, adding to the confusion.

2) An Effective Claim Settlement Ratio( CSR)

The insurance company’s claim settlement ratio is determined by dividing the total number of claims it has received in a given fiscal year by the number of that claims have been settled. The total number of claims that have been resolved is 100 times greater than the claim settlement ratio. The insurer is better the higher the CSR.

There is a good chance that your claim will be rejected in the future if you pick an insurer with sluggish claim settlement ratios but low premium costs. Therefore, it’s crucial to make sure the insurer you pick has a favorable claim settlement ratio.

After reviewing the list and comparing the insurers’ CSRs, you can decide which one is best for you.

3) Responsive And Effective Customer Service

Today, the majority of life insurance policies are bought online without a live agent or physical broker present.

Therefore, one of the necessary benefits of life insurance is excellent customer service. You should always be able to contact the insurer to resolve any problems that may arise during the policy tenure.

Checking online reviews of previous customers to get a general idea of the service the insurer offers will help you make sure the after-sales service is top-notch.

4) Riders Available With The Plan

Your base policy’s coverage can be improved by including these add-ons. The rider will give you an additional payout, for example, if you are diagnosed with a serious illness that is listed in the policy document.

  • Some of the common life insurance riders include-
  • Hospital or Surgical care rider
  • Waiver of premium rider due to critical illness or disability
  • Critical illness rider
  • Accidental death benefit rider
  • Accidental disability rider

Check the rider options that the insurer offers and whether or not the person you want is available with them if you’re thinking about purchasing a policy from that insurer. Additional life insurance tax benefits could be obtained by including more riders on your policy.

5. The Plan’s Terms and Conditions

Life insurance policies have a variety of terms and conditions offered by insurance companies. If you haven’t smoked in three years, one insurance company might classify you as a non-smoker, while the other might require you to give up smoking for five years. To ensure a smooth insurance journey, it is essential to locate an insurer who provides you with the most reasonable terms and conditions and fewer exclusions. Make sure you carefully read the policy’s terms and conditions to avoid any unfavorable surprises in the future.

There are numerous advantages to using life insurance as an investment tool that should be taken into account because it is a long-term commitment. While the right investment can ensure your loved ones’ financial future, the wrong one can cost you.

We’re confident you’ll select the best policy that effectively protects the future of your family now that you are aware of the important factors.

The topic of solicitation is insurance. Please carefully read the sales brochure or policy wording before making a purchase for more information on benefits, exclusions, limitations, terms, and conditions.


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