Planning to buy life insurance policy? Must consider these POINTS - Your checklist

Checklist For Buying Life Insurance Policy: It is a fact that a life insurance policy provides great financial security for an individual and the family. It is always advisable to go with a good and affordable plan that promises greater benefits. But buying a life insurance policy for yourself or your family is not an easy task. It is necessary to equip yourself with some basic understanding of life insurance policies since life insurance companies offer several plans based on the requirements of the customers and also promise different benefits. 

The list of plans and their offerings are so exhaustive that a common customer gets confused. In such a situation, identifying a perfect policy that fulfills your need and fits within your budget could be a daunting task in the absence of basic knowledge.

To make your task easier, we are providing a checklist that you must consider before buying a life insurance policy:

OBJECTIVE: First of all, the main objective of buying a policy should be clear. So, once the goal- short-term or long-term- is defined, a policy seeker or buyer will be in a better position to choose the right and the best-suited policy. If the goal is long-term like a financial distress-free retirement life, one should opt for a policy that gives good returns in the long term.

LIFE INSURANCE COVERAGE: For a long-term goal, it is advisable to go for a life cover that should be at least 10 times the yearly income.

TAX SAVING: Kavinder Khurana, MD, Bharat Claims, said that planning, liability mapping, tax saving and innovative products are other key parameters to selecting a policy. "One should always look for innovative products at the best price," he said.

CLAIM SETTLEMENT: Ease of buying and claim settlement is driving the growth of the life insurance sector. India is now the second-largest insurance technology market in Asia-Pacific. A buyer should always check the claim settlement ratio of the insurance company from which he/she is buying a life insurance policy.

"Claim settlement ratio is very important. The percentage determines how many claims the company settled in a year out of all the claim raised. It is better to look for companies that have a consistently high claim settlement ratio," Khurana said.

He added that 'insurtech offers ease of not only buying policies but also provides a seamless process of claims settlement - a major pain point for the policyholders'. "Such companies decode customers' insurance policy and also help in filing claims directly with the insurer."

PROVIDE CORRECT INFORMATION: A policy buyer should pay serious attention while providing information to insurers. Always provide true and exact information or facts to them with valid documentary proof or rejections. Providing incorrect or false information may result in serious problems at the time of claim.