You can protect your loved ones financially by purchasing life insurance. You should always buy a life insurance policy carefully and after thorough research. When you are looking for a life insurance policy, there might be a lot of questions in your mind, right? Of course, yes! So don't be afraid to ask questions and clarify all your doubts before submitting your insurance premiums.
In the same way, when purchasing an appliance, it is advisable to evaluate the product thoroughly and inquire about the manufacturer on all relevant aspects. Do not hesitate to ask questions about your life insurance policy. To begin, you can ask your life insurance company's agent the following questions for your own satisfaction.
Must Ask question before buying life insurance policy
1. How does life insurance work, and why should I get it?
A life insurance policy involves paying a premium to a company and naming your loved ones as beneficiaries, such as your spouse, children, or parents. Then, in the event of your untimely death, you will receive a lump-sum payment called the sum-assured.
2. Why is life insurance beneficial?
- It gives financial security to your family.
- In the event of your abrupt death, your family will not be responsible for the repayment of your existing loans.
- Secures your child's future - it takes care of education costs or marriage expenses.
- When purchasing a life insurance policy, you are eligible for tax benefits, and you or your nominees receive a tax-free payout at the time of maturity, subject to the provisions stated by the Income Tax Act, 1961.
- A life insurance policy can also protect your retirement.
3. I already have an insurance plan at work, isn't that good enough?
Many employers provide their employees with life insurance coverage as part of their overall benefits package. Since the employer typically pays for this coverage, it is a great perk. But it is still wise to have your life insurance policy through work. There are some reasons for this, they are:
- You may not have enough life insurance coverage through your employer to provide for your family after you die.
- Employers often offer life insurance for a low set amount, for example, $50,000.
- Also, you will lose coverage if you change your job.
4. Term insurance versus permanent insurance: what's the difference?
Term life insurance provides coverage over a fixed time. It protects your loved ones is an affordable option. The benefit of this type of policy is that you can choose a term that covers you when you need it most - such as when your children reach adulthood.
Permanent policies, known as whole life insurance, provide coverage over a lifetime. That means your family is covered for the duration of your life. Similarly, whole life insurance accumulates cash value, allowing you to borrow against it in the future.
5. When is the right time to buy life insurance?
When you are a teenager, it is best to buy life insurance, most probably in your 20s. As younger people tend to be healthier and possess less risk to insurers, lower rates.
6. What is the best way to determine the coverage amount?
The insured amount depends on factors such as your annual income, liabilities, and financial goals. To summarize, your insurance sum assured should be sufficient to pay off any penalties you may have to meet your family's major financial goals, as well as to cover their regular expenses into the future.
It all starts with the right advice
Life insurance is the most critical decision you will make in your lifetime. Here are some essential questions you should ask your life insurance companies. To avoid any claim rejection, you must follow and understand the entire process before buying the policy. To ensure the financial security of your loved ones, you need to answer these questions. When it comes to enquiring about your insurance policy, a certified insurance agent is the right person to call.
