How to Select the Best Life Insurance Policy?

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With a multitude of life insurance plans available in the market, it is critical to choose the right one. The selection of a life insurance plan must be based on a broad spectrum of financial needs.

Here are a few steps to consider while buying the best life insurance policy:

1. Gain Knowledge About Various Types of Life Insurance

Without proper knowledge of how life insurance works, people feel incapacitated to decide about buying the right policy. Hence, it is crucial to gain a thorough understanding of different types of life insurance products before zeroing in on any of them.

How to Select the Best Life Insurance Policy?

2. Assess Your Financial Needs

A life insurance plan that is suitable for your peers may not be ideal for you. Thus, you must consider your specific needs, be it affordability, choice of sum assured or riders before you start comparing different plans.

3. Compare Plans in Terms of Benefits

Owing to the wide variety of life insurance plans available, you need to be sure you select the right one which offers adequate benefits. For this, you should do the required homework of comparing the plans across several parameters like premium, the sum assured, and investment component, if any.

How to Choose the Best Life Insurance Company for Your Family?

The selection of the right life insurance provider is essential to ensure that you or your loved ones will get the benefits they seek from the purchase plan.

Consider the following aspects while choosing the best life insurance provider:

1. Claim Settlement Ratio (CSR)

This ratio defines the claims settled by an insurer over the ones received in a financial year. The higher the CSR, the higher are the chances of getting your life insurance claim paid.

2. Solvency Ratio

It refers to how well an insurance company can manage sufficient cash flow to deal with the debts. An insurer can provide hassle-free claim settlement if this ratio depicts its strength to meet the related liabilities.

3. Premium

All life insurance plans are priced differently. Thus, you need to choose the one that seems cost-effective for you. To avoid the risk of losing the life cover, make sure you do not select a plan whose premium is too high and unaffordable to you.

4. Persistency Ratio

It defines the percentage of policyholders that pay the premium over the total active policyholders. It is a good indicator of customer satisfaction delivered by the insurer.

5. Claim Settlement Process

A simplified claim settlement procedure implies your family will not have to face any hassle to receive life insurance benefits. It is advisable to choose an insurance company which follows a streamlined process to settle claims. 

Why Buy Life Insurance Policy Online?

Every policy buyer must understand different types of life insurance [2] before buying any of them.

There are several reasons that support the decision to buy life insurance online, including

1. Transparency

From the features of a life insurance plan to its premium and other details, everything is transparent in front of you while buying a policy online. You can count upon this transparency to make an informed decision.

2. Convenience to Compare Plans

You can get online access to various informative articles, case studies, and calculators that helps in selecting the most suitable life insurance plan. In other words, you can make a well-informed decision to buy life insurance online quickly.

3. Secure Payment Modes

While buying the life insurance policy online, you utilize secure online payment options. Quick and hassle-free payment processing is ideal for times when you need to furnish policy documents to claim tax deductions.

4. Easy Life Insurance Policy Renewal 

The process of life insurance policy renewal is quite easy and hassle-free. You can get the policy renewal done in just a few clicks made online. 

Documents Required to Get Life Insurance Plan

You need the following officially valid documents [3][5][6] while purchasing life insurance from a renowned insurer:

  • Passport
  • Voter ID
  • NREGA job card
  • Aadhar Card
  • PAN Card/Form 60
     

In case these documents do not contain the updated address, you need the following documents:

  • Utility bills of any service provider
  • Property tax receipt
  • Family Pension Payment Orders issued to the retired individuals
  • Letter of allotment of accommodation from the employers such as PSUs and other statutory bodies

How Do You Save Tax with Life Insurance Plan?

Life insurance policies are considered efficient tools for tax-planning. It is because the policyholder is eligible to get tax benefits under the Income Tax Act, 1961. The premiums paid for various life insurance schemes are tax-deductible Section 80C, while the payout or maturity benefit is tax-exempt under Section 10(10D) of the Act.

How Can You Pay for Life Insurance Policy?

You can choose to pay the premium of life insurance plans in one go or with regular payments over time. Life insurance policies usually provide the option to choose between a single (one time) payment, regular (throughout the policy tenure) payment and limited premium payment tenure (for a payment tenure less than the policy coverage period).

With regular premium payment mode, you can select any of the following payment options:

  • Annual
  • Semi-annual
  • Quarterly
  • Monthly
     

You must also know that the life insurance premiums paid online are processed through secure payment gateways, thus ensuring the safety of transactions.

How Will Your Family Receive the Life Insurance Claim Money?

After your (Life insured) untimely demise, your loved ones will get the policy benefits by claiming the same from your insurer.

Follow these steps to claim life insurance policy benefits:

1. Inform the insurer at the earliest

2. Ask for the claim intimation form

3. Ask for the documents to be submitted with the claim form

4. If the policy was bought online, apply for the claim online as well

The nominee of a policy should not wait too long after the insured’s demise to ensure quick and easy claim settlement.

Which Life Insurance Plan Suits Your Need?

Everyone has different financial needs and life goals, based on which he/she should choose a life insurance plan.

With Max Life Insurance, you get the flexibility to buy life insurance plans that can be personalized to meet your specific needs. Here is a small guide to help you select the right plan:

Which Life Insurance Plan Suits Your Need?

Life Stage/Need: 20 – 25 years (Young and unmarried)
 

Plans to Consider
 

1. Max Life Online Savings Plan (A Unit Linked Non Participating Individual Life Insurance Plan UIN: 104L098V03

2. Max Life Cancer Insurance Plan (A Non-Linked Non-Participating Individual Pure Risk Premium Health Insurance Plan UIN: 104N093V03)

3. Max Life Online Term Plan Plus (A Non-Linked Non-Participating Individual Pure Risk Premium Life Insurance Plan UIN: 104N092V04

Benefits
 

1. Adequate coverage at a low premium

2. Convenience to buy life insurance plans anytime and from anywhere

3. Flexibility to choose policy tenure and sum assured

Life Stage/Need: 25 – 30 years (Married with no children)
 

Plans to Consider
 

1. Max Life Smart Term Plan

2. Max Life Online Term Plan Plus (A Non-Linked Non-Participating Individual Pure Risk Premium Life Insurance Plan UIN: 104N092V04)

3. Max Life Online Savings Plan (A Unit Linked Non Participating Individual Life Insurance Plan UIN: 104L098V03)

4. Max Life Cancer Insurance Plan (A Non-Linked Non-Participating Individual Pure Risk Premium Health Insurance Plan UIN: 104N093V03)

Benefits
 

1. Dual benefit of insurance and investment

2. Protection against various critical illnesses

3. Return of total premium at maturity (with Smart term plan premium back variant)

4. Flexible investment options

Life Stage/Need: 30 – 35 years (Married with young children)
 

Plans to Consider
 

1. Max Life Smart Term Plan (A Non Linked Non Participating Individual Pure Risk Premium Life Insurance Plan UIN: 104N113V04)

(RM :Preferably pitch smart term here, and online term plus only in younger segments)

2. Max Life Online Savings Plan (A Unit Linked Non Participating Individual Life Insurance Plan UIN: 104L098V03)

3. Max Life Cancer Insurance Plan (A Non-Linked Non-Participating Individual Pure Risk Premium Health Insurance Plan UIN: 104N093V03)

4. Max Life Future Genius Education Plan (A Non-Linked Participating Individual Life Insurance Savings Plan UIN: 104N094V03)

5. Max Life Shiksha Plus Super (A Unit-Linked Non-Participating Individual Life Insurance Plan UIN: 104L084V04)

Benefits
 

1. Increasing life cover as defined in the policy terms to beat inflation

2. Tax benefits under various sections of the Income Tax Act

3. Additional riders for enhanced protection

Life Stage/Need: 35 – 45 years (Parents with teenage children)
 

Plans to Consider

1. Max Life Smart Term Plan (A Non Linked Non Participating Individual Pure Risk Premium Life Insurance Plan UIN: 104N113V04)

2. Max Life Online Savings Plan (A Unit Linked Non Participating Individual Life Insurance Plan UIN: 104L098V03)

3. Max Life Cancer Insurance Plan (A Non-Linked Non-Participating Individual Pure Risk Premium Health Insurance Plan UIN: 104N093V03)

4. Max Life Future Genius Education Plan (A Non-Linked Participating Individual Life Insurance Savings Plan UIN: 104N094V03)

5. Max Life Shiksha Plus Super (A Unit-Linked Non-Participating Individual Life Insurance Plan UIN: 104L084V04)

Benefits
 

1. Flexible payout options

2. Comprehensive cover at affordable prices

3. Survival benefit as per the chosen plan

Life Stage/Need: Nearing retirement
 

Plans to Consider

1. Max Life Smart Term Plan

2. Max Life Online Savings Plan (A Unit Linked Non Participating Individual Life Insurance Plan UIN: 104L098V03)

3. Max Life Cancer Insurance Plan (A Non-Linked Non-Participating Individual Pure Risk Premium Health Insurance Plan UIN: 104N093V03)

Benefits
 

1. Financial security for retirement goals

2. Wealth creation opportunities for your child’s future goals

What is the Right Life Insurance Cover for You?

Once you have decided to buy life insurance, the next big step is to choose a specific life cover, or sum assured. Here are some aspects to keep in mind while determining a ballpark figure for the life cover:

1. Consider Your Working Years

A life insurance plan serves as an income replacement tool. Hence, you need to consider the number of active working years it would replace while choosing the sum assured. For instance, if you are 25 right now and have planned your retirement at the age of 50, you have 25 future earning years to consider.

2. Chart Out Your Regular Expenses

The sum assured should cover recurring financial outgoes, including household expenses, bills, and existing loan EMIs on a year-on-year basis. By charting out these expenses for a specific period, you will get a better idea of the sum assured to be chosen.

3. Consider Landmark Stages in Your Family’s Life

Certain stages or events in life require large lump sum amounts. These include wedding, retirement, or child’s higher education. The sum assured should cover them all majorly to ensure your family will not face a financial burden after you.

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