Nobody wants their family to suffer and people always pray for their families’ safety. However, prayer itself will not safeguard them from all of life's challenges. As the sole earner, we would always be responsible for providing financial security and protection to our family. As the breadwinner, it is critical to protect ourselves from the inevitable and uncontrollable event of death. Although no one expects death, but it is necessary to have life protection plans in place if the unexpected occurs. We must look for measures to ensure that our loved ones' futures are safe. One such way to financially protect our loved ones is through term insurance. The best part is that protection plans are a low-cost and useful tool and easily available.
Here are some factors to look for when buying the best suitable protection plan
Your purchase should be based on preferred protection plan rather than peer pressure
Compatriots should not drive your decision on protection plans; rather, it should be based on self-analysis of your requirements.
For instance, Mr Rajiv is a 32-year-old Marketing professional; he draws a salary of Rs. 50,000 per month. His policy beneficiaries include his 2-year-old kid. He invests most of his money, driven by the desire to earn more and influenced by his peers'. Rent, loans, and child bills eat up the rest of his earnings. However, he must keep in mind that investments alone will not support his family in the case of his premature and unexpected passing.
His family would have serious financial problems if he died suddenly with no life protection plans and no income. As a result, he should not be swayed by his peers' opinions and should invest in the best suitable protection plan.
Purchase protection plan online instead of offline
Whether you acquire a protection plan online or offline, it will have a significant impact on your buy. Purchasing insurance plans online via several comparison portals is convenient and cost-effective.
You may evaluate different products based on price and other aspects; there are no middlemen, and the policies are reasonably priced due to no commission being passed to any middlemen. Furthermore, the decision is made unbiased; the products are not hard-sold as they are when insurance agents are engaged.
Be explicit about the coverage duration
The duration of life protection plans is just as important as the quantity of coverage. A protection plan must cover a person at the least until he reaches the age till which he wishes to work. This was 60 years until a few years ago. However, in today's world, people may wish to work past the age of 60. As a result, it is certain that a person will require coverage until he or she reaches the age of 65 or more depending on his requirements and dependants.
Take inflation into consideration
A policy of Rs. 60 lakhs purchased now may not be sufficient to ensure your loved ones’ survival in ten years as inflation raises the cost of goods, lowering the rupee's worth. After ten years, a Rs 60 lakh will only be worth around Rs 38 lakh, assuming a 5% inflation rate. To address this issue, several insurers offer plans in which the coverage amount increases by 5-10% each year. The periodic rise in the sum promised would assist in dealing with both income and inflation increases.
Compare plan's benefits and costs
A buying decision based on the cost and benefits of related products is a well-informed one. Such a comparison brings the benefits and drawbacks to light, allowing you to choose whether the product is worth your money or not.
Claim Settlement Ratio
One of the most important factors to consider when picking a preferred protection plan is the claim settlement ratio. The claim settlement ratio of a corporation tells you how many policies are settled by paying back claims in the event of death. The best companies will settle 95-99 claims out of 100% each year.
Life protection plans offer adequate coverage at a reasonable cost. However, you must first assess your requirements in terms of age, finances, insurance, and your family's future needs. You must be very certain and analytical before purchasing the best suitable protection plan for yourself.
*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.