Life Insurance has paved in such a way that, everyone is aware of its benefits by now. Ordinary people are still reluctant to find a suitable life insurance policy for themselves! It is not that difficult to find a suitable and reputed life insurance plan, as it may seem. However there are few things to consider before buying a Life Insurance plan.
Let us find what are they?
There are ample of life insurance companies in India, few are government owned and some are private owned. Private or government owned does not matter. What matters is the services and plans they offer? Most of the Life insurance companies offer more or less the same stuff, however there are few things where you need to carry out a mandatory check.
- Buying from an IRDA recognised company
The first and the foremost thing one should see is if, the Life Insurance Company is IRDA (Insurance Regulatory and Development Authority) registered. The IRDA approved registered number will prove its authenticity.
It is vital to compare the life insurance plans of different insurance companies, as there are good chances that some or the other company may offer more benefits than other.
- Buying online
Buying becomes easy when you get to compare everything online. You can compare plans of different insurance companies under one roof. Buying online also comes with an added benefit where you get to see the reviews given for that product by other customers, popularity of that product, services offered by the insurance company, the claim settlement ratio and much more! .
- Checking for inclusions and exclusions
Before buying a life insurance policy, it is important to check the inclusion and exclusion list. These inclusions and exclusions will include your pre-existing diseases, or things based on your family medical history. It makes sense to read the policy wordings carefully before giving a final nod to buy a life insurance plan.
- Claim settlement ratio
This is the most important aspect above all, as it will give you a clear picture about the insurance company’s prospect. A good claim settlement ratio for any Life Insurance company should always be beyond 92%.
With the above facts, it is also crucial for us to know some of the unknown facts of the Life Insurance Plans in India.
Here are the 12 Unknown facts of the Life Insurance Plans.
- Age as an important factor to buy insurance
Not many people are aware that with growing age, the premium of a Life Insurance plan also increases. Reason being, with increasing age, the level of risk of life also increases, so the insurer will charge higher premium accordingly.
- Smoking affects premium
Most of the insurance companies calculate premiums based on the risk factor like smoking, snuffing, drinking alcohol, chewing tobacco and other intoxicating stuff.
- Gender does effect the premium you pay
Research says the risk allocated for men are more than a women and the later stays longer. Which means the Life Insurance companies find men more risky when it comes to life insurance claim? So the premium for men is slightly higher than for women.
- Singles don’t need life insurance
However the fact is completely different, it is more important when you are single and the only bread winner of the family. It is crucial to have a life insurance policy even when you are single or married; your relationship status has nothing to do with you buying a life insurance policy.
- Providing incorrect information at the time of buying policy
Your claim may be rejected or disregarded by the Life Insurance Company if the details mentioned by you were incorrect or fake. Which means in case a claim occurs, the insurer will not honour the claim. Consequently, the premiums that you paid till date will go in vain.
- Life Insurance have plans when someone is gone
Life insurance is only associated when someone is gone, however there are other options where one can invest and get returns on it when alive. Like the Money back Life insurance plan, where one can receive benefits only when the insured is alive.
- Life insurance is not needed, if one has a health insurance policy
Health insurance policy is needed when you are alive and you need to pay for hospitalization expenses and medical treatments. Whereas Life Insurance is needed not only when you are gone, but also when you are alive.
- Life Insurance only has term life
It is a fact that most of the insurance advisers prefer term insurance amongst other life insurance plans. However the endowment policy plans, Unit linked plans, Money back life plans, Whole life plans, child and pension plans are also very important and covered under a life insurance policy.
- Life insurance riders
Riders enhance your basic coverage and are optional paid features. However its vital to compare these plans as some insures may add it as an in -built feature and some may add it as a rider where you need to pay extra for the same feature.
- Everyone is entitled for a larger coverage
However the fact remains different, not everyone is entitled for a larger coverage as coverage depends on you earnings, qualification and other profile.
- Exclusions to your life insurance policies
Consumption of drugs, alcohol or any intoxicated stuff
Participation in any dangerous activity
Pregnancy or child birth
Self-inflicted injuries or suicide
- Buying policy online
Buying policy online not only saves your time but also relives you from comparison, saves money and provides timely updates and renewal notices on your policy
Key Features of Life Insurance Plans
- Tax Benefits
The most basic feature of a Life Insurance policy is to save yourself from tax. All premiums paid are exempted under section 80C of the Income Tax Act.
- Financial security
Life Insurance policies provide financial security in case of death of the policy holder. The insurance company will pay out the sum assured to the nominee / beneficiary of the policy once the insured passes away.
- Life Cover
There is no doubt that life is always at risk and hence insurance companies offer plans which provides life cover. The policy holder is covered against the risk of death either for specific period or entire life.
- Provides peace of mind
Knowing the fact that your family will be secured financially even when you’re gone, gives a sigh of relief and eases your tension.
Hence finding a reputable life insurance is not important, but finding one which will serve your needs is more important.