Having a life insurance cannot bring back your loved ones, but can definitely provide one with a financial security. It is no longer restricted to traditional term plans or whole life policies.
Today, there is a vast pool of companies offering a variety of choices with a range of plan features. The variety may range from plain life cover, or a pension plan with regular streams of income, or money back policy for family commitments.
Having a financial security after your loved ones have departed is a safe feeling. Whether it’s just you or your spouse or kids, one gets a peace of mind when their loved ones are financially secured. Apart from this there are factors which makes a life insurance cover important:
- Financial support for your family.
- Life insurance is like an investment tool which comes in handy at the time of your children’s education.
- With all the big taxes we are loaded upon, a term insurance comes as a tax saving mechanism.
The question here arises is that what do you need exactly?
It is important to understand one’s financial position to help choosing the right plan. Here is how you can go about it:
- Assess your need for insurance: List your requirements on priority basis. A life cover should be on top. One may aim to save tax or may take it up as a savings option for future.
- Understand your assets and liabilities: To understand how much insurance you need your assets and liabilities may help. Certain questions can help you in the process:
- What is my family’s current lifestyle expense?
- What do they inherit when I am no more?
- Definite expenses in future such as marriage or education of children
When there are so many options available, it is important to properly understand the choices available. The following suggestions can help you make the right decision:
- Get multiple insurance quotes that include all options or restrictions so you know exactly what is available.
- Stay away from any agent or organization that cannot or will not fully explain exactly what you are buying and why.
- Always remember that you are the client. At no point should you feel bullied or intimidated into buying something that you aren’t sure of.
- Though you certainly want to purchase adequate coverage, don’t over buy. If your premiums are too high to manage because of the extras that have somehow found their way into your policy, you will be much more apt to allow it to lapse.
- Once you find a company or agent that you are comfortable with, ask questions. The clearer you are on what type of life insurance rates and options are right for you, the easier it will be to agree on a package that suits your requirements.
- Consider life insurance for the whole family, not just the adults. Expenses that follow a death or serious illness or accident will add more stress to an already devastated family.
- Remember to regularly check your policy for changes that may affect you or your family. Almost all companies will send out notices to explain changes that they have made so make sure you review them.
- Review your policies relevance regularly and update as your family and their needs change.
- Consider your life insurance a fixed and non-negotiable expense in the same way you would your mortgage or car payment. It’s easy to consider life insurance as a luxury rather than a need, when in reality that is definitely not the case.
Individual insurance needs change with every stage in life. However, the known fact is that the earlier one buys a life cover, the cheaper it works out for him. So buying life insurance even if you are currently a young professional is a wise option.