Buying life insurance is vital. However, you will only be able to meet your life insurance requirements if you buy the correct policy. To ensure you pick the right policy, you need to first understand the various factors that make a life insurance plan suitable for you. Take a look at this article to decode the factors that make a life insurance plan ideal for you.

Factors to consider before buying life insurance

Here are the factors you must take into account when you go shopping for life insurance:

  1. Life insurance need: Analyse your need to buy a life insurance policy. Do you really need it? Do you have liabilities and unpaid debts? Are you the only sole earning member of the family? Ask these questions and then take a decision of opting for the same.
  2. Type of life insurance: Did you know that life insurance is available in various forms? You can buy an inexpensive term insurance or you can buy a more costly whole life insurance plan. You can get a money back plan for your child’s educational needs or you can buy an annuity plan for your retirement days. You can also buy a ULIP and invest a part of your money in the financial markets. So understand the various types of life insurance plans and then buy the policy that is best suited to you.
  3. The volume of the cover: Life insurance needs vary from person to person. So you cannot blindly buy the same cover that your friend did. You will have to make a budget for yourself and see exactly how much insurance cover you need. It is vital to select the right volume of your life insurance cover. There is no point in buying excessive life insurance cover. However, buying insurance that is too less will be a loss and not serve any purpose. Your annual income, liabilities and number of dependents would help you gauge the volume of the cover you should ideally be looking for! Experts recommend you to buy a life cover 10 times your annual income, so that your family is financially secured post your demise. So do your math before you buy the plan and get an adequate cover.
  4. Affordability: Buy a plan that is affordable. A life insurance plan becomes deactivated if you do not pay the premiums on time. So if the premiums are too high and unaffordable for you, you will end up defaulting. The cover will be switched off thereafter and if a claim is made, it will be rejected. Thus it is important for you to buy an affordable life insurance plan and keep it active at all times.
  5. Reputation of the insurance provider: The insurance provider plays a very significant role in life insurance. It is therefore extremely important for you to choose a reputed insurer who processes claims efficiently and hassle-free. If your insurance provider refuses to pay your family the death benefit, the whole purpose of buying life insurance will be defeated. You can find out about the insurance provider from their existing customers. You can also read online reviews to get a better idea.
  6. Compare: Today, there are so many life insurers in the market. But, choosing the best one would be a difficult tasks. Comparing sites like helps you to find the right insurer by comparing quotes of different insurers under one roof. Besides, their expert advice and excellent post-sales services make them one of the best online insurance brokers.
  7. Claim and payouts: Different life insurance plans have different claim and payout processes. For example, in a term plan, you can opt for a lump sum benefit or a staggered benefit. The same goes for an annuity plan too. In a money back plan, you need to space the payouts wisely. Understand these processes properly and opt for the correct methods to maximise your life insurance gains. This must be done when buying the policy and not later on.

In a nutshell

To put it in a nutshell, you need to grasp the concepts of life insurance very closely before you make a purchase. Buy a kind of life insurance that would give the maximum returns to you and your family members. Remember, at the time of a claim, you won’t be around to oversee the proceedings. So to ensure your nominees get the benefits, you have to put in the hard work beforehand, while buying the policy. Keep the tips mentioned above and your task will become less complicated.

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