* Things to keep in mind when buying a life insurance policy.
According to a report, only less than 60% of the people have life insurance. And the surprising thing is that even more than these people do not have comfortable life insurance. According to the total population of India, only 3 out of 100 people have an insurance policy. Now you can imagine how risky this is. The total population of India is about one hundred and thirty five crores. Insurance companies always ask to take insurance in their advertisement and bring very good affordable schemes. Still take. but still in logo There is a lack of awareness. The Indian government has given some health insurance schemes for financially poor families.
For two years, Covid 19 has shaken the whole world. Today every man whether he is a salaried person or self employed, whether businessman or industrialist has forced everyone to think. That if his life is not there, then what will happen next when he does not live in this world. Do they have the right insurance and if they do not stay, then their family work will go on after them with their sum assured. Now man also thinks in spending because till now the epidemic named corona virus has not ended. And it is also possible that the future I just got this kind of disease. We should take a good insurance policy to keep ourselves and our families safe. Let us try to know in details what things should be kept in mind when buying an insurance policy now.
Content of Index
1. What is life Insurance?
2 . Purchase for the proper reason. Get it the reason of buying protections
3 . Sum of life cover
4 . Policy tenure
5 . Additional coverage & benefits
6 . Verify all charges
7. Life insurance company and its claim settlement experience
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1. What is Life Insurance?
Life insurance is a contract between you and the insurance company. In this the agreement is between you and the insurance company. In this, the insurance company gives you life cover and in return you have to pay a small insurance premium for the number of years you take. It gives benefits in life and even after life. The insurance company gives you financial security. Increases savings for a longer period. And gives tax saving under section 80A and under Income Tax Rule Act 1961.
Here is available things to keep in mind when buying a life insurance policy.
2. Purchase for the Proper Reason. Get it the reason of buying protections
Taking an insurance policy should be your priority. Because not only you but your family is also safe because of this. It insures the troubles coming in your future. With this, you can live your life in a comfortable way. Now you take a right and good policy, which should also include your future planning, it should include all the needs of you and your family.
While taking the policy, you should take care of everything like future inflation, their predicted density extra. Apart from this, what is the claim ratio of how the insurance company is. How is its consumer service? They do what they say or don't, etcetera. Do not take an insurance policy with the intention that it will save tax. Because by this you are not making the right choice.
3. Sum of Life Cover
Your insurance cover should be around 10% depending on your annual income. Your insurance premium is decided according to whatever insurance sum assured you select. This sum assured insurance is available to the applicant on the maturity of the policy or in the second case to the nominee if the applicant dies before the policy is executed.
4. Policy Tenure
Generally the insurance company gives the policy term from 5 to 40 years. Provides a policy term of up to 99 years depending on the maximum applicant. It depends at which age the applicant applies. The ideal tenure of your life insurance policy should be your 'retirement age minus your present age'. This means that if you are currently 30 years old and want to retire by the age of 70, your policy term should be 40 years or more.
5. Additional Coverage & Benefits
It is very difficult to find money on your own to pay for out-of-pocket losses, you can easily deal with this uncertainty by having an insurance policy on your side. The right chosen insurance provider pays for the occurrence of any insured event, whenever they happen.
Whenever you buy an insurance policy, consider this thing too, otherwise there will be loss. Add-on base cover should be accompanied by additional benefits such as critical or critical illness rider, accidental death benefit rider, waiver of premium rider, etc. These are beneficial extras that can be opted for by paying a nominal premium.
The insurance premium paid for purchasing a life insurance policy is eligible for deduction from taxable income under section 80C of the Income Tax Act. The upper limit of these deductions is Rs. 1.5 lakh (please see new income tax rule). Life insurance benefits that you or the nominee of the insurance policy will receive from the insurer are tax-exempt under 10(10D) of this section.
6. Verify all charges
Premium Amount Allocation Charges are the upfront charges deducted from the life insurance premium of the policyholder. It is levied as a part of the insurance premium.
A surrender charge in a life insurance policy can be deducted partially or wholly for premature encashment of the insurance. This life insurance surrender charge is usually determined as a part of the annual premium fund.
In addition, IRDAI has issued guidelines on the maximum charges to be levied by life insurance companies. The surrender or closure charges shall not exceed 50 basis points per annum on the unit capital value and the insurance company shall not levy any other charges. These death charges are levied to equip you with insurance coverage.
Insurance companies usually levy these fees on the administration of your funds, and they are levied as a part of the value of the asset. This life insurance charge is deducted before arriving at the Net Asset Value or NAV. As per the limit prescribed by IRDAI, no life insurance company can charge a fund management fee of more than 1.35% per annum.
7. Life insurance company and its claim settlement experience
Before buying a life insurance policy, you should take a lot of information about the company such as claim settlement. While buying an insurance policy, the claim of the life insurance company should be checked. It would be a good decision to assure yourself about the goodwill of the insurance company. The Claim settlement Ratio should be higher than 80% is a good claim settlement ratio. If a company of more than 90% CSR is offering a great value product.
Conclusion
In this blog, we have learned that what things should be taken care of while taking a life insurance policy, if we do not pay attention to it, then we will have to face a lot of problems like in claim settlement, partial withdrawal and so on.
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