If you have the security of your family and loved ones on your mind, you may be thinking about finding the best ways to keep them safe and happy. This includes keeping them prepared to face any possibilities in the future, whether you are around or not. Keeping your loved ones happy and safe, for most people, primarily means securing their financial future. How can you do that?
One of the most straightforward ways of ensuring that your family is financially secure even after you are gone is getting a life cover for yourself. Buying a life insurance plan is a way to lay the foundation of economic stability for your loved ones, so they could be free to pursue their dreams.
Steps to buying life insurance
Given the importance of life insurance plans and considering what they offer, it is important that you choose the right plan for yourself. Another reason why you should take the time and follow the right steps to buy life insurance is that the plan is meant to serve your loved ones. They should not have to face any issues when you are not around, or it could affect their financial wellbeing.
Here are eight steps to buying life insurance that you can follow to chart your journey from deciding to buy one, to buying it.
1. Decide your sum assured
Before you go any closer to buying a life insurance policy, you ought to look into the details of what you seek from it. How much coverage would you want? Some suggest that it is ideal to take at least 10x of your annual income as your sum assured. This way, you are securing your family for a long time and ensuring all their needs and wants are met. Another way to reach a sum assured amount is by calculating the needs of your family as well as the liabilities you may leave behind. The coverage amount should be high enough that it suffices for all the liabilities as well as the routine expenses of the family.
2. Pick your term duration
Another important aspect to decide before you buy a term plan is the duration of the coverage. How long do you want your policy to cover you? If you are buying the policy only to cover for any short-term liabilities, you can opt for simpler plans that offer a shorter term duration of five to ten years. On the other hand, if you are keen on the policy being a way to protect your loved ones’ future, you can opt for a longer term duration.
3. Browse and pick a policy type
The next important decision you need to make is what type of policy you are going to select. You can choose from term life insurance, whole life insurance, ULIPs, and other such options. You can look online for details on each of these policies, their features, and their pros and cons. You ought to decide based on what you seek from your policy.
4. Look for the right insurance provider
There are several life insurance providers in the market today. But know that what one has to offer may differ from another. It is important to research the available insurance providers and the type of policies they have to offer. To know whether the insurer is the right match for you, you can look at the policy types, features, inclusions & exclusions, as well as benefits. Along with this, you can also look at the claim settlement ratio as well as the solvency ratio of the company, which tells you about the history of claim settlements by the company.
5. Use a calculator
A life insurance calculator is one of the most important tools you can use to get estimates for the plan you choose. Once you have a shortlist of which plans suit you and from which insurance provider, you can use their corresponding online calculators to understand how much premium you may be required to pay. You may have to input some details into the life insurance calculator to get these premium estimates.
6. Choose the right policy
Based on the online calculator quotes, which type of policy you want to buy and from which insurance provider, you can now pinpoint the right policy for yourself. This means at that this stage you are fairly ready to buy a policy and you know which one you are going to buy.
7. Select riders
Selecting life insurance plan riders is a step that many seem to miss. Once you know which policy to buy, look for the riders available with the same. You can then choose life insurance plan riders based on what is available, and what you seek. Riders are add-on features available for your plan at extra cost.
8. Get your documents in order
Plans can now be purchased online as well as offline. You can look at the plan page to get an idea of what documents you will need to buy this plan. You can gather the required documents. In case of any doubts or queries, you may consult a customer service representative of the insurance provider.
After these steps, you should be ready to buy life insurance. Remember, life insurance is a way to offer a safety net to your loved one. Let this be a well-thought-out decision.