The need to buy a life insurance plan depends upon a number of factors. It majorly depends upon your goals and what stage of life you are in. The main objective of any life insurance policy is to secure the family’s future financial needs. It includes secondary benefits too like tax benefits and investment. Mentioned below, is a list of people who may need to buy a life insurance plan –

Young and single people – It’s advisable to buy life insurance plan at an early stage because premiums offered by the insurance companies are relatively lower when you are young. You also have lesser responsibilities when you are unmarried. Besides, the chances of getting diseases increase as the person ages and so is the amount of premium asked by the insurance companies.
Newly married people – Marriage comes with additional responsibilities, thus people who have just got married and started families need to get a life insurance plan to cover different risks in life. This is because when you get married and start a family, you have dependents to look after. Therefore, it’s advisable to buy a life insurance policy before you get married or when you are newly married as this will cost you less premium.
Working couple with kids – A working couple having children should necessarily buy a life insurance policy. In case of the sudden death of one of the partners, a life insurance policy will leave the other partner in a much better position to manage family’s finances.
Senior citizens or retired individual – Buying a life insurance policy is extremely important for senior citizens as this will help them live a relaxed and comfortable life post retirement. Some policies can also serve as a replacement for income to support them and their family, minimizing their future financial worries. Thus, getting a life insurance plan is one of the best ways to take care of them and make them and their loved ones feel financially secure.

Hence, keep these above-mentioned pointers in mind as this will help you decide whether buying a life insurance policy at your current stage is required or not.

Typically, any individual between the ages of 18 to 65 years can purchase a life insurance policy in India. However, in some cases, it may depend on the kind of insurance policy.
How to Buy the Best Life Insurance Policy?

Different life insurance plans have been designed to serve different financial needs. Using the right plan to serve your goal will ensure you can get the most out of it. Also, apart from buying the best life insurance plan, you should look for the right life insurer.

Here’s a step-by-step process you can follow to select the best life insurance plan from the best life insurance providers:

Step 1: Understand Your Needs

The kind of life insurance plan you should buy depends on the financial goal you want it to fulfil. For example, if you are looking for long-term protection you will need a term insurance plan. However, if you want to save for your retirement you can use a ULIP or savings plan.

You should also define your need specifically in numbers and type of life insurance plan. For example:

Protection goal: You need 10 to 15 times your annual income as life cover (requires Term insurance plan)

Child’s higher education goal: Build a corpus of Rs. 40 lakhs in 20 years with pay out option in last four years (requires Child insurance plan or ULIP plan with Goal Protection Option)

Retirement goal: Save 20% of your income for retirement (requires ULIP plan, Guaranteed Savings Plan or Deferred Annuity plans)

Step 2: Select the Life Insurance Provider

You can look at multiple parameters to judge the performance of a life insurance provider. The most important ones are as follows:

Claim Settlement Ratio (CSR): This ratio shows the number of cases resolved by the insurer in a financial year out of the total received claims. A claim settlement ratio of 95% or above is considered good. Canara HSBC Life Insurance has reported a claim settlement ratio of 99.01% for the financial year 2022-23.

Online & Offline Presence: Presence is an important factor which defines how easily you or your family can approach the insurer in an emergency. To judge this factor, you can connect with the insurer online via chat, e-mail or call, while the number of branches across the country would define the offline presence.

Quick Claim Settlement Conditions: With growing technological advantages, life insurers can settle claims faster nowadays. However, only the best offer to settle within one working day. For example, Canara HSBC Life Insurance has a fast claim settlement program, InstaPromise, to settle death claims within one working day for eligible policies.

Claim Settlement Process: One of the primary purposes of life insurance is to ensure a smooth life for your loved ones. So, you would want them to have it easy when it comes to benefitting from the life cover you provided. Much of it depends on the experience they have at the time of claim settlement. The best life insurers make sure to simplify and handhold the family at the time of death claims.

Solvency Ratio: Solvency ratio defines the insurer’s ability to pay the claim demand without hiccups. A solvency ratio of 2 or above is considered good for a life insurer. Otherwise, you can also check the credit rating for the insurer, which is a more comprehensive parameter to follow.

Persistency Ratio: Persistency ratio indicates how long investors stick with the insurer. 13th month and 61st-month persistency ratios are especially useful in assessing the investor engagement of life insurers.

Cost of Life Insurance: The premium you invest in a life insurance plan also consists of many expenses of the scheme. While you try to logically aim at the least cost, you should not forget the other end of the bargain – policy benefits. You should compare different policy features and benefits along with the cost and all other factors to secure the best deal.
Why should you Buy a Life Insurance Policy Online?

Greater Transparency

When you buy a life insurance plan online, you have the opportunity to assess and go through each benefits and features at your own pace. You can also check the exclusions and conditions of the policy with the available policy document.

You can clarify and verify your findings with the 24×7 customer service and regulators before purchase.

Ease of Purchase

The online purchase process of life insurance policies is a simple step by step process. You can pause and save your application midway to complete it later. If you are eligible, you can even avoid a visit to a clinic for a medical check-up, which will be completed either online or on the telephone.

Paperless Process

The entire application process for life insurance policies is paperless, and you do not need to submit or send a paper document anywhere. You need only scanned copies of your documents.

Safer

With a completely online application process, you can be sure to deny unauthorized access to your documents to anyone. As you upload all the documents directly to the secured servers of the insurer.

Easy Management

Online life insurance policies are easy to manage. If you have more than one life insurance plans, you can use electronic insurance account (EIA) to manage all of them from a single portal. EIA also helps you to appoint an administrator for the life insurance policies in your absence. The administrator can only file the claims for the policies and cannot change nomination or other details.
Documents Required to Buy a Life Insurance Policy

Life insurance companies require certain documents when you apply for a life insurance policy. These documents can be directly uploaded onto the website in case of online policy application, or can be submitted to a policy manager in case of offline purchases. Apart from these, you will be needed to fill in information such as personal details, lifestyle related details, health details, etc.
Document Required To Buy a Life Insurance Policy
Income Proof
ID Proof
Address Proof
Age Proof

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