What are the mandatory questions that you should ask before buying Life Insurance?
The primary purpose of buying life insurance is securing your family’s future financially when you are not with them. It makes you well prepared to tackle the uncertainties of tomorrow. Thus, you should have proper understandings of its features so that you can buy the right life insurance policy and in case of any mishap, your loved ones can live their life without financial strain.
If you are also planning to buy life insurance, then there are several questions that you should inquire about while choosing the right life insurance policy. So, let us discuss the essential pointers that you should remember before buying life insurance:
- How is the insurance coverage amount being decided?
You should be well aware of your expenses, such as how much your dependents will require to keep up the same lifestyle in your absence or the amount you need to pay off your liabilities. As insurance companies usually consider various factors to determine the coverage amount. Thus, it would help if you enquired about the evaluation process that your insurer is using to decide the sum assured.
- What are the exclusions in the policy?
Life insurance doesn’t pay out the coverage amount for all kinds of deaths. There are specific cases that are not secured by life coverage. Due to which, it is significant for you to comprehend the exclusions in the insurance policy in detail. Therefore, you should go through the policy guidelines, or you can ask an insurance expert about all such circumstances that could make the beneficiary ineligible to get the death benefit amount.
- What should be the term of the policy?
At the time of buying life insurance, it is crucial that you carefully select the right tenure for your policy, as it directly impacts the premium amount. The sole purpose of buying a life insurance plan is to safeguard your family financially in your absence. Therefore, it is always advised that you should purchase life insurance till you manage to fulfil all your responsibilities like children’s education and marriage, your outstanding liabilities etc.
- How to appeal if the sum assured gets denied?
There are numerous reasons why the insurance claim could be denied. In case the nominee of the policy isn’t happy with the reasons given for a case dismissal, at that point, he or she can raise a complaint. Before buying the life insurance, you should completely understand the procedure from the insurance company, such that in case a situation like a claim rejection emerges later in the future, the nominee of the policy knows how to make an appeal.
- What amount of my money will be invested?
Life insurance like ULIP puts some portion of the premium towards the insurance cover, while the remaining is put into an investment fund like debt, equity etc. You should be aware of how much amount will be out into investments. You should check the insurer’s website or brochure regarding the fund allocation and various other charges.
- What if I miss the premium payment?
There might emerge certain situations when paying premiums could become difficult for you. Hence it is essential to have the relevant information regarding the late payment or non-payment of the premiums. Keeping this aspect in mind, it is imperative to check the terms and conditions while buying life insurance policy. The clauses in the policy agreement will give you an idea regarding what will happen in such situations. Most insurance providers give customers a 30 days grace period, after which the policy gets terminated.
- How the policy benefit amount gets paid out?
In case of policyholder’s demise, the death benefit amount is usually paid out in lump-sum to the beneficiary of the policy. However, there are few plans which give the choice of paying out the death benefits in monthly or partial payment format. Therefore, you should enquire about the pay-out options from the insurance provider before buying life insurance and opt the right one.
- What riders can I add to the policy?
Riders are add-on benefits which enhance your policy coverage and can be added with a little extra cost over your base premium amount. There are several riders that insurers offer like Critical Illness Rider, Accidental Death Benefit Rider, Waiver of Premium Rider amongst others. Some riders are already included in the policy while others require extra premiums. It would be best if you enquired to your insurance provider whether riders are available or not with the base policy and which would be the most appropriate one as per your requirement. So, pay close attention while adding riders and do not add any rider unnecessarily as it can significantly increase your premium amount.
- Which lifestyle factors influence the premiums of the life insurance policy?
Life insurance companies consider certain lifestyle factors before issuing the insurance policy. Some of the factors include the nature of the applicant’s profession, whether it’s safe or risky, any unhealthy practices like smoking or drinking, among others. Do check with your insurer about various factors that they take into consideration before and after the policy starts.
Putting up the correct set inquiries is the way to finding the right life insurance policy. To make a wise decision, it is significant for you to be aware of the product. If you have any doubts or queries, then you can visit BimaKaro.in and connect with our insurance expert for better clarity.