4 Things to Know Before Buying Life Insurance Plans

One of the most fundamental necessities for a person today is to build their finances in a way that sustains them not only in the present but also in the future. Life insurance plans are one of the ways to achieve that security, where a person is able to ensure the protection of those dependent on them; by choosing to insure themselves in the event of their death or illness. 

Life insurance plans can be defined as insurance instruments that enable the coverage of the needs of the insured and their dependents through an assured benefit sum in the event of the policyholder’s demise. A standard life insurance policy in India is considered to be one of the most affordable means of securing one’s future where premiums are low and one can customize their coverage and payout methods as per their convenience.

There are several combinations and types of life insurance policies available for a policyholder to choose from; from what is a personal term plan to what is group term life insurance there are many online resources that are evolving with measurement metrics to help compare plans across insurance providers and their best customisable versions. An example of the same is a term life insurance calculator that a person can use these by adding their requirements to get an approximate idea of the plan that is the most suitable for a certain income and lifestyle. 

Life insurance plans, being a universal necessity have many added benefits and features available to be added for people across all income brackets. These features can be integral in helping the policyholder develop a coverage plan that aids them and their dependents in the best-rounded and secure way possible. Let us look at some of the standard features one can find in life insurance plans: 

  1. Premiums: Life insurance plans offer coverage and future benefits to policyholders of all kinds. This coverage is supported by a nominal premium payment by the policyholder at a predetermined frequency (monthly, bi-annually, single premium etc.) These premiums are essential and have to be maintained by the policyholder as per the requisites of their plan and cannot be lapsed on. However, the more complex a plan is, the higher the premiums for them are. One can use a life insurance calculator to get an approximate idea of premium rates for their deal life insurance plan, before purchasing. 
  2. Policy Tenure: The time-period for which the insured person is liable to benefit from the coverage of the insurance plan, is called the policy tenure. Under life insurance plans, one can be covered for the entirety of their lifespan but also have their beneficiaries avail the benefits even in the event of their natural death. This sum is exempted from taxation. 
  3. Coverage: It is the benefit, or assured monetary guarantee that a policyholder is given at the time of the purchase of the policy. Life insurance plans and the coverage they offer are determined on the basis of various fields such as age, income, assets, liabilities, and existing cover. A life insurance calculator calculates a coverage amount that is adequate to cover the debt expenses an investor may leave behind, and any additional financial liabilities their beneficiaries may have. 
  4. Riders: With a nominal amount paid over the existing premium plan, a policyholder can expect to secure the additional cover provided under various riders that are made to protect the policyholder from situations apart from death. 

There are riders available in term insurance for situations such as Accidental Death, Critical Illness, and Disability. 

  1. Payout Method: For the aforementioned sum benefits, there are options available for prospective life insurance plan policyholders to choose their payout method; as the beneficiary may not find it suitable to receive a large influx of money and manage it as per the needs of the family. They may benefit more from the lump sum being converted into a monthly, quarterly, bi-annual, or annual income as per their requirement. 

How to Know What’s Best for You? 

Before buying life insurance plans, a prospective policyholder ought to understand the features and provisions provided by most plans and weigh them against their personal requirements to find their ideal insurance match. Keep the following things to know which life insurance plans are the best for your needs:

  1. Compare Coverage Plans: Since there is an abundance of policy options available for people to choose from, one should thoroughly gauge all metrics that align with their needs and choose a plan accordingly. 
  2. Compare Premium Costs: Many life insurance plans and their variations offer the options for the policyholder to pay their premiums in a staggered frequency that fits their income patters or financial situation. It may vary from monthly, quarterly, bi-annual or annual basis. One can use a life insurance calculator to get a projection of the same. 
  3. Check for Riders/Customisations: One can add riders for Income, Waived Premiums, Disability, Accidental Death or even Critical Illness in life insurance plans. 
  4. Use Online Resources: A person can use online resources such as life insurance calculator, and plan comparisons that are available for free on most insurance provider websites to get an approximate idea of the plan that is the most suitable for a certain income and lifestyle. 

In order to explore options for life insurance plans in India one can head over to Max Life Insurance’s website and look through term plans fit for coverage and protection of their loved ones. For added assistance, one can also set up a consultation with a financial advisor from Max Life Insurance who can help you navigate the nuances of availing customisations and more. 

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