How to Choose The Best Life Insurance Policy?

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How to Choose The Best Life Insurance Policy?

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Introduction

• Life Insurance is one of the fastest growing
  insurance products in India.
• Having a life insurance policy provides you
  with the much needed financial security in times
  of unfortunate death of the policy holder.

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Benefits of Life Insurance Policy

• Protects your familys financial future
• Provides financial help during medical
  emergency
• Is an investment tool that helps you save
  money for your childs marriage, education and
  your retirement.
• Helps in paying off loans and liabilities
• Helps build retirement corpus
• Helps you leave an inheritance

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Types of Life Insurance Plans
Plan Type What You Get
Term Insurance This type of insurance plan provides death benefit to the beneficiary only if the insured dies during the term of the policy. It offers high coverage at low premium rates. A pure protection plan does not provide any maturity benefit.
Endowment Plan It is a mix of savings and insurance that helps you build financial corpus while providing protection. In case of death of the policyholder, the benefit is paid to the nominee. In case of survival, maturity benefits along with bonus (if any) is given.
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Plan Type What You Get
Money-back policy This is a savings cum protection plan that provides a certain percentage of sum assured to the policyholder at regular intervals. Pay-outs are generally at regular interval of say every 4 or 5 years.
Whole Life Insurance Policy Provides life insurance coverage to an individual till the age of 100 or as long as he survives. Policyholder is required to pay premiums until death or till a specific period of time. The nominee is paid the sum assured along with bonus on death of the insured.
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Child Plan Helps you build wealth for your childs education or marriage. Protects your childs future in case of your unfortunate death.
Pension Plan This type of plan provides you with a steady income flow post retirement. Helps you build a healthy financially secure future
Unit Linked Plan This is an investment cum insurance plan. A part of the premium is invested while another part is used towards life insurance. These plans provide market linked returns along with flexibilities on managing investments and withdrawals.
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How to Calculate How Much Life Insurance You Need?

• Decide whether or not you need life insurance
• Firstly, determine whether or not you need life
  insurance
• If youre single and dont have any
  dependents, then you may not find the need to buy
  life insurance
• If youre married and have kids, then its
  advisable to buy life insurance
• How much coverage do you need?
• Depending on your income, your liabilities,
  assets, your income, your life goals like childs
  marriage and education, lifestyle, you can
  calculate the coverage you need.
• Its a thumb rule to opt for a life insurance
  cover 15-20 times more than your income.

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How is Life Insurance Premium Determined?

• Your life insurance premium is determined by the
  following factors
• Age
• Gender
• Health
• Smoking Drinking Habits
• Lifestyle
• Family medical history
• You can choose the best life insurance policy by
  keeping the above things in mind and also by
  choosing the type of policy that suits your
  budget and requirement.