6 Important Questions to Ask When Investing in Life Insurance

  • December 28, 2017

Customers tend to face several qualms and apprehensions while purchasing a life insurance plan. Most of them are also not sure about the actual functioning of claim settlement in case they have more than one life insurance policy.

There are a number of queries they would like to ask before the actual purchase. Listed below are some of the most important queries you need to ask when investing in one:

1. Will the premium of my plan change in the future?

Unless such a clause is precisely mentioned in the policy offer document, the company won’t change premium of life insurance. This remains same is to remain the same through the whole term of the policy. Also no changes should be brought up by the policyholder himself/herself such as a disability, smoking habit, life threatening disability, drinking habit etc. Such developments might apply rise in premium.

2. Is Life Insurance claim successful in the event of Accidental Death?

The insurance certainly pays in the event of an accidental death. This is regardless of whatever the reason is. The cover amount or sum assured will be paid by insurance company on the death of insured (either natural or accidental, or even death due to some illness). A variety of additional advantages (riders) including the following may offer significant boost to your term policy:

– Accidental death benefit
– Permanent disability rider
– Critical illness rider

These insurance riders will give nominee get an amount over and above the standard sum assured.

3. How will my beneficiaries get claim?

Most individuals want to know about this. This is important because the ultimate aim of investing in a life insurance is to save one’s family from any kind of harassment, hassles of finance and unnecessary paperwork. Here, one needs to know that the claims are:

– Crystal Clear

– Highly Systematic

– Super Quick

– Online

All of these features are important one wouldn’t want their loved ones to run from pillar to post for claiming money. Many reputed companies visit doorstep of the bereaved for necessary paperwork. Later on, the payment is either done through cheques or online banking.

In case of more than one beneficiary, the distribution amount must be notified properly. All of the details given about beneficiary should be correct. These need to stay updated from time to time. Do not forget to ask relevant questions related to requisite documents and verifications for processing claim. You also require educating the family accordingly.

4. What happens if I die outside India? Will the Life Insurance be valid?

Yes. Life insurance plans are valid, even if death occurs outside India. Here, policy holder should have communicated this fact to the insurer. The insurance company should be informed about the fact that the policy holder now lives outside India. The process is very similar to change of coordinates such as address, phone number, or nominee; one can state the company that he/she is going abroad. On the other hand, if he is migrating to a country that is considered as unsafe such as Burma, Pakistan, Somalia etc. the company will defer this facility.

5. What If I don’t die?

Most people are bound to get upset on finding out that no maturity benefit gets offered in life insurance policy if the policy holder outlives. If this is one of your major concerns, you need to get detailed info on the changes your policy might go through once it nears the end of the term. Most life insurance policies do not experience any raise in the premiums for several years. So once you approach the end of that term, it is good to retain your policy. This might increase the premium. You can choose to buy a policy only till the time you have liabilities to pay such as a loan, mortgage, or college education of kids etc.

6. What is the ideal amount to invest in term insurance?

Buyers tend to first think about the premium and later about the sum assured. However, it is more important to consider certain crucial factors prior to the investment such as your present salary, growth in salary over the period of time, financial burden of family, growing needs of the family, and rising inflation and expenses. Based on these considerations, you must calculate a sum assured that your family might require. The amount you get is what you must invest in.

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