Factors to Consider When Buying Life Insurance

Today buying life insurance is not a choice, but a necessity. While it is important to buy a life insurance policy, it is equally necessary to consider several factors that can have an impact on your life insurance claim in the long run. Hence, there are a number of factors that you should consider when buying a life insurance policy.

Your insurance requirement:

This is the first and the most important factor to consider when choosing a life insurance policy. Assess the life coverage you would require and accordingly determine the plan you need. Take into consideration the number of dependents you have, your income and other sources of income, if any. Evaluate the cost of the regular household expenses as well as the future financial liabilities that you are bound to take care of such as child marriage, education, loan repayment, etc. Know where you stand today financially and accordingly choose the coverage amount. Remember, the sum assured that you choose should be 25-30 times more than you annual income and should be able to meet your family's financial expenses in the future after your demise.

Duration of the plan:

Ideally, people opt to buy a life insurance plan only until the years they would be earning. But ideally, this isn't right as when you retire, you should have a plan in hand that would help you take care of your future expenses such as child's marriage, your travelling plans, etc. Simply, ensure that you are covered for a longer duration to meet your financial goals, get enough coverage and secure your family's future at all times.

Type of life insurance:

There are different types of life insurance plans available in the market. You can choose an endowment plan, money back plan, term plan, ulip or even a child plan. When you invest in a life insurance plan, ensure that you are aware of how each of these life plans work and opt for a plan that best suits your budget and requirement. Remember, different types of life insurance plans offer different benefits, so identify the plan that seems more beneficial and affordable to you.

Insurance provider:

It is important you opt for a good life insurance provider as the performance of the plan largely affects the returns you are eligible to get. Take a look at the claim settlement ratio of the company to understand the working of the company when it comes to settling customer's claim. This will give you a fair idea of how much support you can expect from the company. Also, don't forget to read customer reviews on social media websites.

Cost of the plan:

Various life insurance plans are priced differently. You will have to pay premiums on a monthly or yearly basis to keep the plan active.  It is therefore important for you to have a plan that is affordable. If the premium is too high and you can't afford to pay it, your plan will lapse and you will lose your life cover. .

Bottom line

Though it is very easy to buy a life insurance plan today, taking some time out and caution can go a long way to ensure you get the best deal out of the plan. Keep the points mentioned above and evaluate the factors carefully. You will surely end up with the best possible life cover at the best possible rate.