It
is important to secure your life, especially once you reach a particular age.
You must understand the fact that you may have to look after your family in the
near future. It is thus, crucial to choose a beneficial policy.
There
are several life insurance policies available in the market but choosing the
one that is the most beneficial to you can be a little tricky. Plus, you have
to take into account the amount it will take in order to create a balance
between investment and expense.
Discussed
below is a simple guide to purchase a life insurance policy that works for you:
#1-Consult
your family doctor before applying for policy
Irrespective
of you opting for a short term or long-term insurance policy there are basic
standard norms to be followed. One norm which any applicant ought to follow is
to carry out a medical test.
The main reason why doctors suggest a medical
check-up before applying for an insurance policy is to resolve pending issues
on health records and stay updated on it.
Some
life insurance companies review your past medical records. This will reflect
any lifestyle or health changes that you have made in the recent times. For
instance, you have been a smoker and overweight with minor health issues, but
you changed your lifestyle and currently are in a better form.
Your
health is directly proportionate to your rating, this means healthier you are
better would be your rating. As far as insurers are to be believed the cost
changes by 25% as per your health.
This
means that if you are in pink of a health you get to make 25% of additional
savings on your policy.
#2-
Ask for valid assurance
Always
ask your agent to send you screenshot of important quotes. There are some
companies which recommend few policies just because they get better business
from them and that particular policy company.
However,
this may not necessarily be the case for every policy there are some genuinely
beneficial policies with a strong valid reason. At times, the insurer may not
quote you best companies just because you have specific health issues or
certain kind of lifestyle. Perhaps, this may restrict you from investing in the
best or lowest quote.
This
can be quite possible because most people are unaware about policies and the
terms and conditions mentioned in them. Therefore, it is wise to always ask for
screenshot of different quotes on the agent’s screen.
In
case you note that your agent is not offering you the best quote then you can
always enquire the reason for the same. It is beneficial to look for a company
which understands your needs and considers your budget. This way, you will not
skip any of your payments which are to be paid to the company and can also
strike a balance of cash flow all through the month.
Nowadays,
you can also check company profiles online and get a better understanding of
their services through their website.
#3-Build
policy layers
You
can invest in one policy which charges an expensive amount or invest in
multiple policies and tone down your price.
Well,
every individual has a different lifestyle and therefore their needs too vary.
This means that some individuals might opt for a particular policy at 30 while
others may opt at 40.
Therefore,
look into multiple factors of a policy just to ensure that you are actually
paying for your needs and avoid unnecessary payments. ‘Layering policy’ is a
term often used when a person invests in multiple policies for different
purposes and time.
If
you note that you do not need a policy with respect to a particular purpose
cancel the policy. This technique helps you to save money and is more fruitful.
For
instance, instead of buying an expensive policy you can invest in 3 different
polices which covers income replacement (for 25 years), kid’s education (for 15
years) and your mortgage (for 20 years).
#4-
Choose annuity over lump sum
Due
to lack of relevant knowledge about insurance policies, people often opt for
lump sum instead of an annuity pay-out.
The
main difference between the two is that in lump sum option the family receives
a lump sum tax free amount after the death of the individual. On the other
hand, annuity pay-out is wherein the family receives benefit or the money over
a period of years.
Apart
from this, ensure that you do not sign-up for any other policies except from
the one you are opting for. This is to avoid a similar struggle which PPI
victims are suffering from. There are people making successful PPI
reclaim
even today and earning back compensation in guidance of trust-worthy companies.
Therefore,
always be careful while making any financial investment.
#5-
Do not share unnecessary information
It
is not necessary to discuss personal information if not asked for or is not
important. There are companies which believe in the blame game wherein they
cite that if the father of the policy owner dies of cancer the owner as well,
will go through it.
However,
this is not necessary and thus, you must not share unnecessary information with
agents.
It
is wise to invest in a life insurance policy right from a young age so that you
can secure yours and your family’s health. Besides, it becomes easier to manage
this expense if you have invested while you are young.
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