Things You Need to Know Before Buying an Insurance Policy

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Life Insurance
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Things You Need to Know Before Buying an
Insurance Policy
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• The choice to purchase a life insurance policy to
  protect ones financial dreams and aspirations is
  a wise decision. It is also important to purchase
  insurance according to financial needs. Buying an
  insurance policy is not easy as one cannot
  understand all insurance products available in
  the market. As a buyer of life insurance, you
  have the right to understand the financial
  aspects for which a solution is proposed to you.

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• IRDA has made it compulsory for insurance
  companies to provide an illustration at the time
  of the sale. Please ask your agent to explain the
  illustration and understand the various benefits
  available under the plan you are purchasing. You
  are entitled to see and understand the sales
  literature approved by IRDA containing UIN
  (Unique Identification Number). You are requested
  to insist on sales literature and read the same
  while purchasing a life insurance policy.
• Life Insurance contract is a contract of utmost
  good faith, wherein it is your duty to inform the
  insurer of any medical or financial facts. Please
  read the proposal form after it has been
  completed and confirm that all answers are
  correct and that there is no false information in
  the proposal form. This is important as the
  claims will be payable only when utmost good
  faith is exercised while purchasing life
  insurance and there is no fraudulent intent in
  answering questions in the proposal form.
• Once you receive the policy document, you need to
  read the same and ensure that the policy document
  matches the cover sold to you. The following
  terms in the policy will help your understand
  your policy document better.

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Free Look in Period

• In case you find that the general terms and
  conditions of the policy document does not match
  with the cover sold to you, you have the option
  of returning the policy document to your life
  insurance company stating the reason within 15
  days from the date of receipt of the policy
  document. On receipt of your letter stating the
  reason for cancellation along with your policy
  document, the company shall arrange for return of
  the premium paid by you after deducting charges
  as provided in IRDA regulations for protection of
  policyholders interest.

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Personal Details

• It is critical that you check all the information
  provided by you is correct in your policy
  document. This includes your name, age, address,
  date of birth, etc. If you find any error, you
  need to inform your agent or customer service
  department of the insurance company immediately.

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Nominee

• A nominee is the person designated by the
  policyholder to receive the proceeds of an
  insurance policy, upon the death of the insured
  i.e. policyholder during the term of the policy.
  You can change the nominee during the policy
  term, and if you decide to do so, please inform
  the insurance companys customer service
  department. There is a process for change of
  nomination and you will be guided by the company
  to make a valid change of nomination.

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Change in address/ contact details

• During the policy term, if theres change in your
  address, telephone number or email address, you
  should inform your life insurer so that its
  updated to make sure you do not face any hurdles
  during the claim. Documentary evidence of the new
  address may be required for compliance with AML
  guidelines.

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Fund Performance/ Bonus

• If you have invested in unit-linked life
  insurance policy (ULIP), you can track the
  performance of your funds. Every insurance
  company publishes unit prices on daily basis on
  their websites and periodically in business
  dailies. If you have invested in a traditional/
  conventional life insurance policy, you can check
  if the policy comes with profit. If yes, you
  can ask your agent to educate you on the yearly
  bonus declaration.

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Grace period

• Grace period refers to the time period provided
  by life insurance companies to pay your premiums
  if you fail to pay your premium on a specified
  premium due date. Grace period may range from 15
  to 30 days from the due date. Please refer to the
  policy document for the days of grace allowed
  under the plan purchased by you.

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Maturity and Claims

• Your policy would mature at the end of the policy
  term you have chosen and on your chosen
  retirement (vesting) date. You can redeem your
  fund value along with sum assured, and other
  benefits as defined in your policy document. In
  case of unfortunate demise of the policyholder,
  the family members of the policyholder should
  contact the life insurer with the original policy
  document, claimant's photo identity and address
  proof, copy of death certificate by local
  authority. The sum assured and other benefits are
  paid to the nominee mentioned in the policy
  document. It is important to keep the policy
  document safe.

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• The life insurance cover that you bought is very
  valuable for you and your family. If the cover is
  lost by non fulfilment of the policy conditions,
  then you may not be able to purchase a new cover
  at the same rates or you may not be eligible for
  insurance because of your health conditions. It
  is important to understand the terms and
  conditions of the cover and maintain the life
  cover to safeguard yourself and your family.
• Source http//blog.hdfclife.com/things-you-need-
  to-know-before-buying-life-insurance-policy-532300
  

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