Important Tips on Buying a Life Insurance Policy

Introduction

Life Insurance comes with many benefits. Nowadays, life insurance isn’t just a contract between the insurer and insured, which provides protection against risk of life by paying a premium. For sustainability in the market, every company and product need to adopt the current demand and circumstances and same goes with the life insurance products too. In these years of change in the market, regulator and life insurance companies have taken major steps to meet the changing demands which have provided customers with following options and benefits:-

  • Wide range of product portfolio
  • Options of saving and investment
  • Added benefits with life insurance
  • Different ways of getting low premium and high coverage
  • Additions in list of key features of life insurance polices
  • Transparency and hassle free procedure

With a pool of different companies, products and benefits to choose from, you need to pick out the best one for you. There are many things which you need to keep in mind before buying insurance and there is no specific guideline for choosing the best one, it all depends on your need and situation. But there are some important points related to every policy which can help you to filter the best insurance policies. Based on those important points, we have outlined following important tips for buying a life insurance policy.

Tips

  • Start early

Buying a Life insurance when you are young, gives you a lot of benefit. You will be able to get high coverage at a very low rate of premium because age has a direct effect the premium rate (younger the buyer, lower the premium is). In addition, with low premium, you will get better financial planning, long duration of coverage and your premium will be locked at a very low rate for your entire policy term.

  • Choose the right coverage amount

Don’t decide your policy coverage on your feelings or on calculations based on single factors (like 10 times of your salary). While deciding upon the coverage amount, always consider your current lifestyle, debts, assets, future obligation (college education of children, settlement of your family to different locations, etc.), and rate of inflation. Choosing low coverage will give you zero benefit while choosing a high coverage will be a costly deal for you.

  • Comparison is the key

Comparison is very much necessary before buying an insurance policy. It helps you to choose the best policy at the best rate. There will be many polices which will not offer benefits which you are looking and may be available at different rates. There are many IRDAI certified comparison portals which provide a comparison of different policies on their websites which is unbiased and easy.

  • Choose the right policy

Different policies have different benefits, eligibility criteria, terms and conditions, exclusions and inclusions. You can choose the right policy for yourself only if you know about it well. So the key in choosing the right product is better understanding about it. Know about the riders available, add on benefits, what is not covered under your policy, premium rates and all other aspects related to your policy. Know your needs well and then find policies accordingly.

  • Choose the right company

There are more than 20 companies in India and it very much necessary to choose a trustworthy company. There are some companies which provide best insurance policies and are trustworthy also. You need to check the claim settlement ratio, review (by customer and experts), claim settlement process, product portfolio, price, etc. of different companies to choose the right one.

  • Understand the brochure

There is a brochure available with every Life Insurance product which is available on the company’s website. It contains all the key benefits, features, eligibility, inclusions, exclusion, term and condition related to the policy. Go through every fine line of the brochure to understand your policy well. It will help you to use the available benefits and avoid any bad surprises in future.

  • Disclose your information correctly in the proposal form

Some people hide facts about themselves while filling the proposal form and giving personal details to the company. For example, some people tick themselves as a non-smoker while giving details to get low rate of premiums. But later, at the claims stage, it could result in zero benefit as the claim will be rejected due to misleading information provided by the insured. You can’t fool the company by giving wrong information. So to avoid any hassle during the policy or at the time of making claims, it is always necessary to provide the right information about yourself to the company.

Never buy a Life Insurance policy in a hurry because it’s a decision which will have an effect on your whole life. Give some time for research and understanding your needs well because a policy bought with precision gives you exactly what you want.

Where to Seek Financial Advice

Many times people find themselves looking for financial advice. The problem is the sources they are using when it comes to all of the personal finance topics available. People will ask their friends, family, co-workers, etc. only to be left with disappointment when they are given poor information. Well today I am going to discuss the places that you should seek your personal finance advice from including paying a professional, to finding free information.

Now, if you are the type of person that is not very resourceful and find yourself trusting people that always let you down, your best option is to find a professional financial adviser. If you don’t even know where to start looking for an adviser then you are probably in desperate need of help. Almost any large financial institution will have financial advisers available to you. Walk into your bank, or call your brokerage account and ask what they offer and what the costs involved will be.

Those of you that are a bit more resourceful and have a good foundation for understanding your personal finance goals can probably fine the information from quality sources on the internet for free. Now I would caution you to take anything you find on the web at face value as there are a lot of dot com websites setup that post content and don’t care if it is quality to the point of helping you, but rather a means of drawing in traffic to sell you something through on of their advertisements.

Any website that is publicly traded or well known in the financial world is probably going to be a good start. Many people have heard of BankRate and others like it to find the information they are looking for. Finding a site that publishes content on financial advice is going to be the hard part, but once you have found it be sure to bookmark that site or subscribe to the RSS feed to have updates automatically sent to you.

Once you have found a site that is offering quality information, now is the time to speak to family and friends. asking them if they have ever been to RPP Financial, or Bankrate is going to get you a yes or no answer, rather than their personal opinions on the topic. It is really up to you where you seek financial advice.

Find Cheap Life Insurance Policies

Do you need to find a cheap life insurance policy to protect your family from a financial crisis? Most responsible adults understand the need for life insurance, but they think that policies cost a lot, or finding a policy will be too hard.

You should compare life insurance companies because premiums do vary. We found large price differences between the best insurers when we quotes the same 40 year old man for a 20 year term policy with $100,000 in face value. That means he could save $6,000 over 20 years if he bought the cheapest policy instead of the costliest policy!

There is no reason to pay too much and just because one policy is cheaper does not mean it would be an different than the most expensive one! It would be the exact same coverage, but just taken out for less money.

So how do you compare life insurers anyway? Well, the web can make this process very simple. because you can use an online quote form to enter your information one time, and then you can sit back and let top insurance companies compete for your business. Insurers need to stay competitive because nowadays, with the Internet, it is very easy for consumers to compare premiums before they buy a policy.

We have more good news. Because people are living longer and healthier rates,ry companies are actually dropping their rates. Even if you shopped for coverage a few years ago, you may be pleasantly surprised to find very affordable rates today. Your family is important, and if you need to protect them because they depend upon you, it is very simple for most people to find affordable life insurance.

Do You Know Where to Look For the Best Financial Advice?

If you spend any time trying to learn about the stock market, you know that there is a lot of advice out there. Turn on the financial news networks, read the books and articles, or talk to investing friends and you know that one thing is for sure: Even though financial advice is abundant, good financial advice is hard to find. Let’s look at how you can sift through this advice to find something that is useful.

First, don’t try to become an expert in all areas of investing. Unless you’re a full time investment professional, you probably have other responsibilities during your day. Pick areas that interest you and take some risk in those. For the rest, safe, dividend paying stocks held for the long term will be where big money is made.

Maybe you’re a technology junkie. You read all the magazines and once Apple puts out a new iPhone, it’s no surprise to you because you have read about it for 6 months. If that’s you, find a higher risk stock that could make you tons of money in the short term. If you know nothing about oil, let somebody that you trust and who has a consistent track record of success guide you in your diversification efforts.

Next, remember that while much of the media is committed to providing accurate information, they are first committed to gaining readers, watchers, and followers. Stories are geared towards holding your attention and for that reason, they are often over sensationalized. Listen and evaluate the financial media but be very careful about making investment choices solely based on these stories. Some media personalities will show a proven track record over time. If that is the case, stick with them. Read their blogs and focus on what they say. You don’t, and probably shouldn’t, read everything.

If you don’t believe you can sift through all of the financial advice coming your way, consider subscribing to a service like Action Alerts Plus where an expert like best selling author and CNBC commentator Jim Cramer is doing your research for you and all you have to do is buy and sell when he tells you to execute the trade. My secret is that I don’t have enough time to do all of my research so I let Action Alert Plus do it for me.

The world is on information overload and knowing which stocks are right for you is tough. Action Alerts Plus is one way to put confidence back in your investment choices.