Life insurance is the core of every financial plan. But, still, people are unable to comprehend it easily because of its complexity. With proper information and a little bit of research, you can simplify the buying process and arrive at the right choice for you and your family. Zurich life insurance.
You can easily compare all the available policies in market from all top insurance companies in few seconds to choose the best policy as per your needs from here- Term
Here are few facts about life insurance that can help you to make a right decision:-
Types of Life Insurance Policies
Term insurance: It is the simplest, least expensive and most widely applicable type of life insurance. It is a pure plain vanilla protection cover without an element of investment. It offers financial protection for a specific tenure. In the case of death of the policyholder, his nominee will get the sum insured to lead a financially secured life. However, if you survive the policy tenure, you have to forgo the entire premium.
Endowment insurance plan: It offers dual benefit of life cover along with saving component. It usually gives returns much like debt instruments. A certain part of the premium is allocated towards sum insured and rest is invested. It gives a lump sum amount after the policy tenure or on the death of the policyholder, whichever is earlier.
Moneyback insurance plan: It offers periodic payouts to help you meet financial goals at regular intervals. In the case of the death of the policyholder, the insurance company pays the full sum assured along with survival benefits.
Life assurance what is it
ULIP: Unit Linked Insurance Plan (ULIP) offers life cover with an investment component. However, it offers investment options much like mutual funds. Since it is linked to the market, a return is not fixed. ULIPs also give flexibility of switching between equity and debt funds. It helps to create wealth in long term.
Whole-life insurance plan: These plans offer life cover for the whole life of the policyholder or up to 100 years, whichever is earlier. It also offers dual benefit of insurance and investment. It has investment component much like bonds or CDs but backed by the insurance company.
Decide how long you want the policy to cover you
After deciding type of life insurance plan that you want to purchase, next step should be to decide the term of the policy. The term of your policy should be until the age you are planning to retire.
Decide the amount you need to be covered for
You should decide the amount you need to be covered for. If your cover is insufficient to meet your present liabilities, your dependents will have a hard time to make their ends meet in case of your death. And if you take very high life cover, you will end up paying very high premiums which are a waste of money.
Generally, your life insurance cover should be ten times of your annual income plus outstanding loans such as a home loan or car loan plus major future financial expenses such as your children's education and marriage plus inflation.
You can further enhance your cover by attaching rider or add-on cover with your life insurance policy. It offers financial protection over and above the basic sum insured against an eventuality. These riders can be bought for a nominal premium. Some of the popular riders are critical illness rider, disability rider, and premium waiver rider.
Get life insurance quotes
Getting life insurance quotes is very important as different insurers have different premiums for a specific amount insured for a certain period with certain exclusions for a certain age. If you choose to avail of insurance riders than the life insurance quotes will increase and this increase will not be uniform amongst various insurers. Asking for life insurance quotes can save you a lot of money over the policy term.
Study various life insurance quotes
After getting various insurance quotes, go through them minutely. Understand what every policy covers as well as its exclusions. Then shortlist few policies that fulfill your requirements, then, find out about the customer service of the shortlisted insurance companies.
Famous quotes about life insurance
It is always advisable that you go for less complicated life insurance policy so that you can comprehend it easily. Before buying any life insurance policy go through its terms and conditions thoroughly.
Read more details here- PolicyMantra's Guide to Life Insurance