Smart tips for choosing life insurance in India
What's the story
Choosing the right life insurance policy is a crucial decision for securing your family's financial future. In India, with a plethora of options available, it can be overwhelming to pick the one that best suits your needs. This article aims to simplify this process by providing smart tips that will guide you in making an informed choice.
Coverage assessment
Understand your coverage needs
Before diving into policy options, take a moment to assess your coverage needs carefully. Consider your age, income, the number of dependents, and your financial goals. A widely accepted guideline is to secure a life cover that is 10 times your annual income. This amount ensures that in any unforeseen event, your family's lifestyle and financial obligations are adequately taken care of.
Policy comparison
Compare policies online
No longer must you rely solely on insurance agents or company brochures. Today, many online platforms enable side-by-side comparisons of different life insurance policies. You can examine premium amounts, coverage benefits, policy terms, and rider options. This online comparison not only saves time but also offers a clearer understanding of what each insurer provides for the quoted price.
Settlement ratio
Check insurer's claim settlement ratio
The claim settlement ratio is an important metric indicating how many claims an insurer has settled against those received in a year. A higher ratio suggests that the insurer is more reliable when it comes to settling claims. Opting for an insurer with a claim settlement ratio above 90% increases the chances of your claim being settled without hassle.
Terms clarity
Understand policy terms and conditions
It's imperative to carefully read and fully understand the fine print before signing up for any policy. Pay close attention to terms related to policy lapses, surrender charges, exclusions, and rider benefits, among other details. Knowing these critical aspects upfront can help avoid surprises later and ensures that you choose a policy that aligns with your expectations and needs.
Rider evaluation
Evaluate rider options
Riders are additional benefits that can be attached to your primary life insurance policy at an extra cost. Common riders include critical illness cover, accidental death benefit, and waiver of premium rider, among others. While they enhance your coverage, it's essential to evaluate whether you need these add-ons based on your specific risk profile and coverage needs. One should not opt for them indiscriminately.