It is natural that people do not wish to think about grim subjects like death or illness. However, when you have responsibilities towards your family and people who are financially dependent on you, it is advisable to make a one -time decision on how to support them in case of your untimely demise. Life Insurance Policy is the answer to such problems.
A Life Insurance Policy is an agreement made between the insurer and policyholder. In this agreement, the issuer agrees to pay a certain amount of money as premium and I return, the insurer pays a certain amount of money after the death of the insurer.
It often covers critical medical conditions as well. Hence, this way, you can ensure you’re your family or the people dependent on you do not bear the burden of devastating loans and expenses if anything were to happen to you.
However, choosing the right insurance policy can be vividly daunting. With so many policies and schemes, it is a meticulous task to find the right one for you, which shall build on your needs and financial status. Discussed below is how you can decide which life insurance is the best for you:
● The purpose of your life insurance
Life insurance needs vary based on your personal situation and the people dependent on you. It is largely determined by the percentage of the family income that you generate. If you are the primary earner in the family, then it is imperative that you get extensive life insurance that ensures sufficient post-mortal sum of money. If you do not have anybody depending on you, then you might go for a more basic life insurance policy that covers only your medical bills.
● The coverage that you require
Coverage is the prospective casualties or accidents that are taken accountable, in order to decide your insurance amount. This depends on your job profile or day-to-day activities range. If you work in a factory, you will require a certain coverage, and if you are an IT professional, you will require different coverage. The coverage is also determined by your financial and familial condition, your debts and lifestyle. Whether you want to cover your medical expenses or give your family insurance money, or use the insurance money to pay the mortgage, or use it for your children’s education, opting for the right coverage is an important step. It is advised that you discuss this with a licensed insurance advisor, who can direct you through the process. The general guideline is to obtain a policy that yields five to ten times your annual salary.
● Costs of Life Insurance
Most life insurances often have hidden costs, like fees or huge commissions that do not surface until you have purchased the policy. Hence, before deciding on the policy, find out about all the costs involved. In most cases, the price of the insurance is directly proportional to the coverage and death benefit offered, therefore, it is important to make a wise choice, depending on whether you can afford to invest so much money on insurance. Because there is no point in generating cash value post your death if your everyday life goes in the struggle to sustain your family just because you invest more than affordable amounts on insurance.
In conclusion, finding the right Life insurance policy is all about analyzing your financial situation and reading thoroughly through the terms and conditions of the various policies and schemes offered, to choose the policy that is most ideal and coherent to your needs and conditions.