What Are The Requirements for Purchasing Life Insurance?
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By having a purpose, you can buy the best life insurance plan that meets your requirements at an effective cost. It is also necessary to know for whom you want to buy an insurance plan. Who do you want to buy an insurance plan for?
- Yourself
- Spouse
- Child
- Dependents
- Money can't fill the void your death will leave in the life of your loved ones. But it can work as financial assistance to them in your absence.
Documents for Buying Life Insurance Plan
Your application for a life insurance plan contains information largely under the following four heads. Thus, you will need to provide as many documents as well, to support your information:
- Proof of address: Aadhaar, Driving License, Passport
- Identity Proof: PAN card, Passport, Driving License
- Income Proof: Salary slips, bank statement, ITR
- Medical History: Any relevant medical report
Buying the Life Insurance Plan you Need
Understanding your financial and safety needs and finding the best suitable life insurance plan accordingly is what you need to do. Given below are a few steps and tips to break down your search and find the life insurance plan for your family:
Know Your Options
There are two types of life insurance plans:
- Pure protection plans
- Savings plans
Pure protection plans usually only work in case of an emergency. For example, a term insurance plan or health insurance plan. These plans have lower premiums but have a very important role to play in your family’s survival if anything happens to you.
Savings plans, like unit-linked insurance plans (ULIPs), endowment plans, child plans, retirement and pension plans are designed to help you achieve specific life goals. With these plans, you can hope to achieve your goal within the safety umbrella of a life cover.
Assess Your Insurance Need
Your insurance needs consists of two factors:
- Your family’s lifestyle and living costs (Covered by pure protection life insurance plans like term life insurance)
- Your family’s future goals (cover individually with savings plans)
The assessment of these two will let you know the premium amount you can pay regularly. Remember life insurance comes before investments. So, even if your income and expenses do not allow huge savings, at least the pure protection life insurance plan is a must. The amount of cover in these plans should, however, depend on the financial need of your family. For example, a term life cover should be large enough to help your family maintain their lifestyle until the children grow up and start earning.
Buy Life Insurance Online
With the availability of online insurance policies, you can find a suitable life insurance plan sitting on your couch or office table. You can check the premium cost of the life insurance plan you want to buy using the online premium calculators.
The calculators also help you compare:
- The cost of adding different features and benefits to your plan
- Premium amount for different premium payment tenures
- The premium cost of paying your policy premium in different modes
- The online mode lets you compare different plans, discover the company’s performance and also interact with the customer service.
Insurance Application & Premium Revision
One of the steps while buying an insurance plan is the application form. You may find that the life insurance application form is a quite detailed document. You need to provide information about your life, occupation, and medical history.
For a healthy individual with a normal medical history, the insurer may allow life cover without a medical examination. However, for most other cases it will be another necessity. If you have a medical condition or a family medical history of certain diseases the insurer may revise your final premium. Although this amount could be higher than the originally estimated premium cost, due to your medical history the life cover is even more important for your family. In case of wrong information or hiding a piece of relevant information from the application forms, your family may lose the claim settlement.
Other factors which may cause an upward premium revision after submitting a proposal are:
- Occupation
- Hobbies
- Adverse medical report
- The medical examination that the insurer schedules for you is also an important step towards the financial safety of your family. It’ll help you find any medical condition you have been unaware of.
Select Your Nominee
At the time of applying for insurance, you need to share the name(s) of the nominee/beneficiary who would receive the sum assured after your death. In the case of a married person, the spouse automatically becomes the nominee. However, you have the option to add your children as a beneficiary.
Conclusion
There is not one life insurance company that stands out as the best for everyone. Look at the customer reviews, financial strength and policy options that each company offers. You might also benefit from getting multiple quotes to determine which company can offer you the best deal.
Also read: How Can I Avoid Having My Life Insurance Claim Denied?
