28-09-2020
Financial expert Mr Vighnesh Shahane on choosing the right life insurance
Insurance AlertssFinancial expert Mr.Vighnesh Shahane on choosing the right life insurance
Whether you are in your early twenties or late forties, having a life insurance policy is a must for every individual. It not only provides financial stability in case of any emergency but also provides a sense of security to your family after you are gone–taking care of the future liabilities. The term insurance plan for a layman is considered as one of the most uncomplicated forms of life insurance product, which offers insurance coverage in form of death benefit to the beneficiary of the policy in the event of the unfortunate demise of the insured person during the policy tenure. Nowadays, while we are living in a fast-paced lifestyle amidst equally fast-paced technologies, it might be reckless to avoid investing the right life insurance. Moreover, with the growing age, the responsibilities also increase. Purchasing a life insurance policy while you are young, not only provides you with the benefit of paying a lower premium for higher sum assured but also gives you the advantage to save for the long-term, sounds smart right? With the market floating with multiple schemes and policies, it is almost difficult to navigate our way through the perfect plan that benefits your needs. In order to simplify the process, we bring on board, our financial expert, Mr Vighnesh Shahane, CEO, IDBI Federal Life Insurance and Advisory Board Member at GALF (Get A Life Fitness) who take us through easy steps that help you recognise and compare different insurance policies to help make the best decision of your lifetime.
Assessing your life insurance needs with Mr Vighnesh Shahane, CEO, IDBI Federal Life Insurance and Advisory Board Member at GALF (Get A Life Fitness) ; Image: Freepik
'The great English bard, William Shakespeare famously said, “All that glitters is not gold.” A phrase made common by Shakespeare can be commonly applied while scouting for the perfect life insurance as well. Certain life insurance products, notably online term plans, have lower premiums than those sold through offline channels since companies pass on the savings in the cost of selling to the customer, says Mr Shahane. While these products tend to be a draw for certain customers due to their low premiums, when buying a life insurance policy, one needs to look beyond low premiums. It’s useful to keep the below tips in mind when evaluating different life insurance policies as well as the various life insurance companies:
Assessing your life insurance needs
What is your contribution to the family income and how many are dependent on you financially? Are there any savings that your family can depend on to meet expenses and repay debts in case of your unfortunate demise? What are the various milestones that you have envisioned for your family and how much have you saved for them? Answers to these questions would help you decide how much coverage you need. Consult a financial advisor or an insurance agent who can give you information on the various life insurance products available and would also help you to evaluate your life insurance needs. The assessment exercise would ensure the amount of life insurance cover you purchase would provide adequate financial protection to your family in the event of your premature death.
Compare different insurance policies
The next step involves the critical part of deciding which life insurance product provides the best solution for your requirements. Your choice should depend on your needs, both immediate and future. Evaluate the different benefits offered by different life insurance policies to find the one that best applies to your financial plan.
Availability of riders
To meet disparate customer needs, insurance companies also offer add-ons to basic life insurance covers. The add-ons are called riders and are usually offered for critical illnesses like a heart attack or cancer, death by accident, and for income benefits on disability. Find out whether the life insurance company you are evaluating offers the riders you seek.
The flexibility of benefit payment
You need to ensure that the life insurance company settles claims quickly and the life insurance money comes to your family in the form it needs. This means if the family needs the money to come in the form of a lump sum, regular payments or a mix of regular payments and lump sum, the life insurance company should be able to provide it.
Check the company’s presence
When purchasing your life insurance policy, check the company’s online and physical presence. Does the company offer a variety of premium payment options to suit your convenience? Is there a branch office of the company in your city, preferably near your home? Does the company have a responsive online presence in case of any queries or complaints?
Inquire about the company’s track record
A life insurance plan usually involves a long-term relationship of 20-30 years with the life insurance company. Therefore, your life insurance company needs to be trustworthy. Find out how long the company has been in business and the promoters involved.
A life insurance plan usually involves a long-term relationship of 20-30 years with the life insurance company. Therefore, your life insurance company needs to be trustworthy, Image Freepik
Check the claim settlement history of the insurance company
You buy an insurance policy so that in the event of a future need, your insurance company pays the promised benefits. Just as the insurance company verifies your insurability, it is important to check the claims payment ratio of the insurance company.
You can do this by doing a quick search online. The IRDAI also provides claims-related information on its website. The insurance company may have rejected some claims but you need to check the reasons behind the decisions. Insurance companies cannot and will not pay if a claim is a fraudulent one or is not payable for some other reason.
Look at the insurance company’s investment record
If you planning to purchase an investment product such as a Unit-Linked Plan (ULIP), check out the performance of the funds online. Look at companies that have a steady investment record and are not erratic.
Source: Good Homes
