10 important things to consider before buying any insurance in India
Life insurance is a crucial financial tool that provides security and peace of mind to you and your family. You need an advisor with at least 10 years of experience in the field. However, purchasing a life insurance policy requires careful consideration and planning. In India, where the insurance market is vast and diverse, it is essential to be well-informed before making a decision.
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Here are 10 important things to keep in mind before buying life insurance in India:
Never Buy Life Insurance Online
While online platforms offer convenience, buying life insurance online can be risky if you are not well-versed with the terms and conditions. Policies often come with complex clauses that may not be clearly explained online. Always take the time to research and understand the policy details before making a purchase. Avoid rushing into online purchases without proper due diligence.
Meet the Insurance Advisor Directly
It is highly recommended to meet a licensed insurance advisor in person before purchasing a policy. A face-to-face meeting allows you to ask questions, clarify doubts, and understand the policy better. Advisors can provide personalized recommendations based on your financial goals, income, and family needs. Avoid relying solely on telephonic or digital communication.
Do Not Share OTP, Aadhaar, or Sensitive Information Over the Phone
Fraudsters often pose as insurance agents or company representatives to steal personal information. Never share your OTP (one-time password), Aadhaar number, or other sensitive details over the phone. Legitimate insurance companies will never ask for such information through unsolicited calls. Always verify the authenticity of the caller before sharing any details.
Ensure All Family Members Are Present During the Purchase
When buying a life insurance policy, it is advisable to have all family members present, especially those who will be beneficiaries. This ensures that everyone understands the policy’s terms, benefits, and claims process. It also helps avoid future disputes or misunderstandings regarding the policy.
Assess Your Financial Needs and Goals
Before purchasing a policy, evaluate your financial situation, including your income, expenses, debts, and future goals. Determine the amount of coverage you need to secure your family’s financial future in your absence. A policy that is too small may not provide adequate coverage, while an excessively large policy may strain your finances.
Compare Multiple Policies
Do not settle for the first policy you come across. Compare multiple policies from different insurers to find the one that best suits your needs. Look at factors such as premium amounts, coverage, exclusions, claim settlement ratio, and additional benefits. Use online comparison tools, but finalize the purchase only after consulting an advisor.
Check the Claim Settlement Ratio of the Insurer
The claim settlement ratio (CSR) indicates the percentage of claims settled by an insurance company out of the total claims received. A higher CSR reflects the insurer’s reliability and efficiency in settling claims. Always choose an insurer with a high CSR to ensure a smooth claims process for your beneficiaries.
Understand the Policy Terms and Exclusions
Read the policy document carefully to understand the terms, conditions, and exclusions. Be aware of situations where the policy may not pay out, such as death due to pre-existing illnesses or risky activities. Clarify any doubts with your advisor before signing the policy.
Choose the Right Type of Policy
Life insurance policies come in various forms, such as term insurance, endowment plans, ULIPs (unit-linked insurance plans), and whole life insurance. Each type serves a different purpose. For example, term insurance provides pure life cover, while ULIPs combine insurance with investment. Choose a policy that aligns with your financial goals and risk appetite.
Review the Policy Periodically
Life insurance is not a one-time decision. As your life circumstances change—such as marriage, childbirth, or a career shift—your insurance needs may also evolve. Review your policy periodically and make necessary adjustments to ensure it continues to meet your family’s needs.
Buying life insurance is a significant decision that requires careful thought and planning. By following these 10 important tips, you can make an informed choice and secure your family’s financial future. Always prioritize transparency, avoid sharing sensitive information, and consult a trusted advisor to guide you through the process. Remember, the right life insurance policy can provide invaluable protection and peace of mind for you and your loved ones.
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