As children, our parents always cushioned us from most of the adversities of life - but no one spoke about preparing for the certainties. As a result, we grew up not giving it much of a thought and hence didn't prepare ourselves ahead of time. However, as we entered adulthood and began shouldering more and more responsibilities, we realized that life demanded that we prepared ourselves – be it marriage, a child’s education or even retirement. Predominantly, if you have people who depend on you, you must look out for ways that will safeguard their future and provide them with financial security even when you're not around.
But what is this back-up plan, you might ask? In this context, it is as simple as buying a life insurance policy. However, with a myriad of companies offering insurance policies online and offline, it might seem like a confusing ordeal. And unlike many other financial products, a life insurance policy affects our entire life. Therefore, there are a few things we need to be mindful about before buying a suitable plan.
What to look for when you’re purchasing a Life Insurance Policy?
1. Consider the number of loved ones you will be covering for
Financial responsibilities of a single person may differ from the one who is married and with kids. Hence, make sure you consider each and every person who is dependent on you and calculate the cover amount accordingly.
2. Don’t let your family compromise on their lifestyle
Evaluate the funds your family would require maintaining your current lifestyle while taking inflation into consideration and plan your life cover. Also, the cover amount should be determined based on family’s needs & not just your income
3. Count your liabilities
If you have any existing liabilities such as short-term loans, personal loans, home loan, and car loan, include the repayable amount in the life cover that you have availed.
4. Add an additional umbrella of protection
While purchasing a life insurance policy, take riders like accidental death benefit, critical illness care, return of premium etc. These riders can cost a little, but the benefits provided by them are definitely worth the extra cost.
5. Get the right advice
Choose an advisor who possesses the right knowledge and is capable of answering all your questions. A good advisor will help you not only with the perfect policy but also with the points mentioned above. You'll typically get what is called a free look period. If for some reason you don't feel the policy is right for you, this is the time when you can change your mind with no financial obligation.
The best life insurance policies should cushion your risks proficiently. So, make sure you don’t harbor any doubts and make the right choice while purchasing a Life Insurance Policy.
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