Basic purpose of the Insurance is that if a family member accidentally dies, then dependent members will not face financial crisis. Life Insurance is essential to protect family members from financial hardships if the earning member dies. There are important things associated with life insurance that are very important to know. Life insurance is a contract between you and your insurance company in which the insurer promises to pay your beneficiary a sum of money upon your death. This agreement is dependent upon your payment of a premium, either as a monthly or lump sum. It is a protection policy for your loved ones and is designed to benefit them if something tragic or unexpected were to occur.
- Life Insurance is Not Investment
- Wait for Maturity
- Medical Test
- Guaranteed Return
- Wait for Long Period of Time
- Policy in the name of a Minor
- Double check for Cheap Policy
1. Life Insurance is Not Investment:
There are different types of life insurance plans, one ULIP and the Second Traditional. ULIP is a mixed product of investment and insurance, it may be Money Back or Market Linked Plan (ULIP).
If you have only one purpose to get a maximum return then do not treat Life Insurance Products as an Investment Product.
2. Wait for Maturity
The policy holder can exit the policy whenever he wants whether it is a traditional insurance plan or a ULIP, But if the policy has only a small duration left to mature, then the policy should be completed. To avoid losses due to pre mature closure of policy.
3. Medical Test:
If the insurance company asks for medical test and then after calculate premium on buying a policy, then you should have to consider and check procedures for issuing new policy at other insurance companies. Otherwise you may have to pay more in the name of an additional premium.
4. Guaranteed Return
If you are thinking for ULIP Policy than first ask for guarantee of minimum return to the insurance company or insurance provider, as ULIP does not have fix pattern of return. If you are thinking for full guaranteed return, than you have to go for traditional insurance plan.
5. Wait for Long Period of Time:
If you are looking at the traditional plan, the maturity value according to your expectations and your stable return you have to wait for long periods of time. If you are promised returns which are unbelievable then be aware and read carefully all the provisions and wordings of the policy document.
6. Policy in the name of a Minor:
Many people buy policies in the name of small children. Children do not have to go earn money. Every day accidental risks are more on earning person so if possible avoid taking life insurance in the name of minor, and prefer to take life insurance policy in the name of earning person. All Persons should have life insurance according to their Income and for how much life insurance required you may visit How Much Life Insurance / Risk Cover Should Individuals Have?
7. Double check for Cheap Policy:
If some Company is offering to cheap policy than others, its red alert to be aware and check all policy related documents carefully. Do not be confused by the cost of the policy. If the policy is inexpensive, it does not usually have the benefit of survival. Buying an online policy can be a good option, but it may be the case of loss, if you do not understand the terms and condition completely.