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Questions To Ask Before Buying A Life Insurance Policy

By Author: Ekta Kariya
Total Articles: 3

A) What are the benefits of a given policy?
While purchasing a life insurance policy, few questions should be thrown the life insurance agent’s way regarding the benefits of the policy. For example, given your current lifestyle and income source, what would be the best tailor-made plan for you? How much cover amount will be needed by you? What will be the amount paid to your loved ones in your absence? What will be the amount paid to you if you survive the tenure of the policy? How are the returns from the policy calculated? Can you expect any benefit post a few years? Which plan is the most beneficial in the long term and short term? What are the benefits paid to you in case of any disability? So, these are some questions you must definitely keep on top of your list.

B) Guarantees of the policy
It is a must to receive guarantees in the form of a written official document by the insurance company as the company is liable for the same. Guarantees are instrumental in availing returns from the policy purchased by you, but should be provided by the company and not the agent, since he/she can quit the company anytime and verbal assurance will then mean nothing.

C) What is the premium amount?

Ask questions about the premium amount to be paid for a given plan as it is based on your current income and your capacity to pay it years down the line. Also, how long will you be paying it? Will it be the same for the entire duration or will it be subject to change with the passage of time? Moreover, you must keep in mind to ask questions about any additional charges that the plan may attract over a period of time.

D) Is there a need for a medical examination?

Enquire if there is a requirement of a medical examination for the type of life insurance policy you wish to opt for. If yes, how will the medical examination be conducted? Do you have to visit a specified doctor’s clinic or will the medical representative of the said company come at your place for conducting the medical examination? Is it absolutely necessary or the policy can be issued without any sort of examination? And lastly, who will be responsible to bear the costs of the medical examination are some questions you must have the answers to.

E) How reliable is the company?
We go for all things branded while we purchase stuff like electronics, apparel, bags etc. So, why not go by the same mantra when buying a cover that protects the financial future of your loved ones?
It is important to enquire about the current status of the insurance company you want to approach and its reputation. The financial background of the company, its market value, brand value, the agents appointed by it, the period it has been in the market etc. are some of the important aspects you should consider before opting for a life insurance plan.
Claim settlement ratio is one aspect you should not ignore in any case, because the higher the claim settlement ratio of the company, the better would be its reputation and reliability.
F) What happens in the event of non-payment of the premium?

What happens if one fine day, you find yourself unable to pay your premiums? What would be a backup plan or a last resort then? Will the policy be offering any grace period? Will it lapse till its revival again? What would be the procedure of continuing the policy in such a case? Will a fine/penalty be charged on missing the premium payment?

G) How will the family receive the life insurance claim amount?
A hassle-free claim settlement process for your loved ones is the main purpose of purchasing a life insurance policy. Queries like how and when will the family be receiving the promised policy and how will they avail the benefits if the deceased has multiple nominees in his policy should be resolved at the earliest.

The aforementioned is a checklist of a few questions you must pose to your life insurance agent before buying a policy. This is to ensure you buy life insurance the right way while you’re at it!

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