Here are 5 important things to know before purchasing life insurance in India:
1. Life insurance is not an investment: It is crucial to understand that life insurance should not be seen as an investment option. Life insurance provides protection against unforeseen events, while investment helps your money grow. Mixing the two could lead to unsatisfactory investment returns.
2. Determine the coverage amount: The amount of life insurance coverage should be sufficient to financially protect your family, but should also be affordable in terms of premium payments. It is generally recommended to purchase a policy with a death benefit that is 10-15 times your annual income.
3. Consider the policy coverage tenure: It is important to choose a policy duration that adequately protects your family but is also affordable in terms of premium payments. Ideally, the tenure should last until you retire.
4. Understand premium payment frequency: You can choose to pay your premiums in a lump sum or at regular intervals such as monthly, quarterly, or yearly. Consider what payment frequency works best for you and select accordingly.
5. Research claim settlement ratio: The claim settlement ratio is an important factor to consider when choosing a life insurance company. It represents the number of claims the company has resolved compared to the total number of claims received. A higher claim settlement ratio indicates a company that efficiently processes and settles claims.
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