Do's And Don't While Buying Money Back Plans
Table of Contents
From providing security to peace of mind, there are many reasons to buy money back life insurance. Knowing why you wish to purchase insurance is the first step towards an informed decision. In addition, there are several factors you should consider and many you should avoid while purchasing the plan.
Do's and Don'ts Of Money Back Plans
Here are some dos and don’ts you should look at:
Dos:
1. Be Clear on Why You Need the Insurance
A popular reason to buy life insurance policies is tax saving. While it is a good reason, it is essential to know that it should not be the main objective. The real purpose of a life insurance plan is ensuring financial help to your family in future. Keep this in mind when you look at different policies. Choose one that offers comprehensive coverage as per your needs.
2. Know About Riders Available with the Policy
A rider is an additional feature you can avail with the basic plan to give you more coverage. You may have to pay an extra sum, but it is worth the expense. The main types of riders available are:
Accidental Death Benefit
Waiver of Premiums
Permanent Disability Benefit
Critical Illness Cover
Hospital Cash
Check with the insurer what riders are available with them and choose one that you think will be of help.
3. Consider What Policy Period Suits You
Most insurance companies offer you coverage until you are 80. But you can choose the policy period as you wish. For example, if you are 30 and intend to retire at 65, and considering by then all your dependents are financially independent, you can choose the policy term to be 35 years or more as you wish. At the same time, it is important to note that you can buy life insurance even at 60! So, evaluate well and go for the policy period that suits your goals.
Don’ts:
1. Don’t Buy the First Policy that Comes to You
Life insurance buyers should never purchase the first insurance that comes before them. Also, do not think that what your colleague or friend purchased is right for you. There are different types of life insurance plans.
Do a thorough research and find more about what the policies offer. Compare different policies and shortlist ones which tick the right boxes. Then as per the premium and the coverage, pick one that is the best for you.
2. Don’t Keep Your Family in the Dark about the Buying Process
Life insurance is an important financial investment for your family and hence, involves them in the process. Let them know about the policy details, passwords if any, the policy number, the policy document, maturity period, payments, etc.
3. Don’t Select the Insurance Company Blindly
Choosing the right insurance company is vital in the buying process. Check the Claim Settlement Ratio of the company. It will help you know how many settled claims the company has in a year. Go with the insurer that has a high claim settlement ratio.
Conclusion
Money Back Life insurance policies are long-term investments, and hence, you should invest your time and effort to choose the most suitable one for you. Knowing what to consider and what to avoid will help you make an informed decision.
