Insurance is a risk management technique and we can consider it as a technique to lead a hassle-free life. Everyone can face financial difficulties in their life.
But many of us overlook this fact by saying, “Let it go and leave it to God!” Are you one of them? if yes! Then don’t forget “God helps those who help themselves.”
Always have faith in God and hope for the best. But on the contrary, always be prepared for the worst. Today we will discuss what things should be kept in mind while taking life insurance.
Having an insurance policy gives peace of mind that we are ready to face any unforeseen event of a medical emergency or in case of demise the family can survive without us. In fact, it is very important to have insurance.
But there is something more important than having a life insurance policy. That is, we choose a policy that really helps us and fulfills our insurance buying objective. A right life insurance policy can save you money.
Having more life cover than required puts a burden on your pocket and having less insurance cover may not give you the benefits you want to get from it. We have also seen a common dilemma among policyholders that they are not aware of what their life insurance policy covers and what does not.
Such dilemmas indicate that the insured has bought the policy without knowing the benefits.
On this block of ours, we often say that it is better not to buy insurance than to buy insurance without knowing the insurance policy. In today’s post, we will see what things we should keep in mind while taking life insurance.
On this blog, we try to help you choose the right insurance policy that really meets your needs. In our previous post, we told you what questions you should ask your life insurance agent before buying life insurance.
And today here we have listed several things which most of the policyholders ignore at the time of buying the policy.
These mistakes can lead to the rejection of life insurance claims if need be.
Keep these things in mind and never ignore them.
Delay In Buying
You must know the many reasons for taking life insurance and you may have decided to buy one. Though you know that you should have a life insurance policy knowing all this you are still delaying in buying insurance.
I did the same thing, I myself used to say “tomorrow I will definitely buy life insurance cover,” but that never came yesterday and I spent a lot of time buying the insurance cover and I had to pay more premium.
Delay in buying insurance has two disadvantages first is that you have to pay higher premiums and second that you are not financially secure till the time you don’t have the policy (who knows if injury or Whose door will death knock on?).
The life insurance premium is decided by your age. The sooner a person buys a policy, the less premium he has to pay.
Choosing the wrong insurance policy
As I discussed earlier choosing the right policy is more important than buying an insurance policy, so first, you should know your insurance needs and try to know how much insurance coverage you should buy.
Ask yourself and your insurance agent questions related to insurance like why do I need insurance cover? How can I buy the right life insurance cover? How much cover should I have? What should be the term of insurance? Do I need to add riders for additional coverage?
How many types of life insurance are there? Consider both your current and future needs when answering these questions.
Generally, the insurance cover should be 10 to 20 times your annual income. For example, let’s say John wants to buy an insurance cover and he earns 2 lakhs annually. In this way, he should have an insurance cover of 20 lakhs (2 * 10 lakhs) to 40 lakhs (20 * 2 lakhs).
However, the real-life insurance cover depends on your present and future financial needs. But insurance experts say to buy insurance in this range.
Buying insurance without expert advice
Choosing the right life insurance policy for yourself is not rocket science. You need to analyze your insurance needs considering your present and future conditions and you will be able to choose the right insurance policy for you.
However, in my opinion, we must consult an insurance agent while choosing a life insurance policy as they are professionals and they know the best way to invest in a better policy. By telling your insurance needs to your insurance agent, you can get advice from him about which life insurance policy would be best for you.
Some agents charge a consultation fee, so in my opinion, there is no harm as they are helping you with a big investment. But if you buy a life insurance policy from him, then it is not necessary to pay the consultation fee because he will get the commission only from selling the policy.
Not comparing the chosen policy
To save a few bucks on every e-shopping website, before we buy an item, we check the price of that product on other websites as well. We buy from where we get it cheap. But we forget this important thing when we buy insurance products; In which we invest a major part of our income.
The insurance market is growing very rapidly across the world. Many new public and private players offer attractive discounts on buying insurance from them to attract new customers.
So, before buying life insurance, visit some insurance comparison websites and compare insurance products to save your money. There are great chances that you will be able to buy life insurance at a reasonable price.
Tip: While comparing life insurance products, don’t just focus on the price, look at what the policy offers. Some insurance companies sell very cheap insurance covers but those insurance covers offer very few benefits than other policies. A low-cost life insurance policy may offer you fewer benefits.
Ignoring Buying Insurance Online
In this age of the internet and technology, everything is available at our fingertips. Many insurers sell life insurance products online.
You can visit the website of the insurer from whom you wish to buy the policy, to check the various products offered by them along with the prices.
Buying life insurance online is more reliable. Because you buy directly from the insurance company. Do not buy it through an intermediary.
But if you are not sure which insurance policy is right for you, then an educated insurance agent can give you better guidance to choose a good life insurance policy.
Online insurance comparison websites can help you choose a good insurance policy. You can seek assistance by visiting such websites or calling their toll-free number to help you choose a good life insurance policy.
One advantage of buying life insurance from such a website is that if your claim is rejected by the insurance company but your claim is true, then such a website also helps you in taking the claim.
Not checking the registration of insurance company and agent
The Insurance Regulatory and Development Authority of India (IRDAI) monitors all insurance companies in India. Every company selling insurance products in India must have this authority’s recognition. If a company is not recognized by IRDAI, it means that the company is fake.
You can take certain precautions on your side to ensure that you are buying a policy from a real-life insurance company and agent.
While purchasing a life insurance policy, visit the websites of the relevant authorities (which regulate insurance products in your area) such as IRDAI. (which regulates insurance products in India) to check the registration of the insurer.
Such authority constantly updates on its website which new company it has recognized and which one has been derecognized.
Also, don’t forget to check the agent’s license. Do not buy life insurance from him if he does not have a valid license.
If an insurance agent does not have a license from the company, it means that he or she is not qualified to choose the right insurance policy for you.
Such people sell life insurance in which they get more profit.
Do not asking questions to the insurance agent
While buying land or a house, we ask sellers countless questions like why are you selling it? Who is the real owner? e.t.c. We ask all these questions to make sure that we are going to enter into a legal contract.
Life insurance is also a legal contract. So choose it legally. Ask as many questions as you can (oh! Insurance-related only).
If you are buying life insurance with an investment component then also ask about various risks, the number of switchings in a year, charges for managing the investment portfolio, and the policy surrender value, etc.
It is very common in India that people often buy life insurance through a relative or friend (who is an insurance agent) without knowing, “What does the policy cover and what does not?” There is nothing wrong with buying life insurance through a relative.
But the problem is that without knowing anything about the policy, you end up paying the premium.
No one can understand your needs better than you. That’s why you should ask your insurance agent all the questions that are necessary.
Here we have listed some important questions that you should ask your insurance agent while buying life insurance. If he is unable to answer these questions then it means that he is not qualified to sell you a good life insurance policy.
Not reading the terms and conditions
Be an analytical buyer who reads carefully and completes all the terms and conditions of the policy document without considering anything while buying insurance. Insurance is a legal contract between two parties (insurer and insured).
Therefore all the terms, conditions, duties, and liabilities in such a contract should be clear and transparent.
Before filling out the proposal form, ask for an insurance policy brochure. Read it thoroughly without any hurry. Take all your time to read this.
If your agent does not have an insurance policy brochure, you can ask your insurance agent or company to send the policy brochure by email or post. But don’t buy life insurance without reading it yourself.
Some insurers provide such documents on their website so you can visit your insurer’s website.
Not filling out insurance proposal form in person
Fill the Life Insurance Proposal Form yourself and disclose all the facts clearly and truthfully. Insurance works on the principle of trust so all the asked facts should be clearly presented so that no rejection will be faced in the future.
If a person does not keep the facts correctly while buying insurance, then the insurance company can refuse to give the policy or even reject the claim.
Similarly, if the insurance company has not clearly disclosed the terms and conditions, the policyholder can cancel his contract within the free-look period (usually 15 days) after receiving the policy documents and get his money back. can take.
Do not forget to keep a photocopy of the proposal form. This can help you if you refuse to take life insurance cover from the insurer.
Insurance is not an investment
Life insurance is a complete risk management technique. In which you invest to deal with any unforeseen event. The sole purpose of the insurance product is to provide financial assistance in case of loss; Not to increase earnings or assets.
Yes! Some insurance products like the Unit Link Plan give you some part of your investment as a return at the time of maturity.
But if you are looking for an investment option then you are in the wrong place. Buy life insurance cover to deal with future accidents.
If you want to invest your money to meet your future financial goals then choose other options like SIP (Systematic Investment Plan), Equity Funds, Mutual Funds, etc.
Final Tip: In today’s era, insurance is very important to protect yourself and your family from risk. Basically, it is a responsibility which you carry out for your family. Do not ignore the above-mentioned points while buying an insurance cover.