The arrival of pandemic in the year 2020 has changed the outlook of people towards insurance. It used to be called an 'underdog' for a long time in the financial world but people have now reviewed their financial needs and priorities afresh. Younger people are now buying life insurance and the growing presence of digital media is forcing companies to rethink their distribution and customer experience strategies.
Companies that understand the needs of this category of youth and provide advisory services as per their needs have emerged as the preferred option for their protection needs. The number of people buying life insurance for first time has increased. In such a situation, we are providing you with information that will help you in buying the insurance for the first time.
Here is the list of things that you should keep in if you are buying life insurance policy for the first time :
1. Selecting a life insurance plan
There are many life insurance solutions that can help you meet major goal-based objectives like child's education, retirement, income replacement, wealth accumulation, etc.
Before purchasing any product, you should evaluate your future needs and aspirations. This ensures that you buy financial products only as per your needs.
2. No one size fits all approach
For years, purchasing life insurance has been viewed as an expense rather than an investment. It has been observed that people try to meet multiple financial goals with a single product. This exposes you and your dependents to financial risks because through this you are only able to partially meet your protection needs.
For example, if you want a fund for your child or want to create an emergency fund and secure the future of your loved ones, a term insurance plan alone will not suffice. This will definitely leave two of your financial goals unfulfilled.
3. How much life cover is too much life cover?
Estimating life cover is quite confusing at times and especially when you are buying life insurance for the first time. One rule suggested by most financial experts is that your life cover should be equal to 10 times your income.
However, this helps a lot in deciding the life cover. Despite this, it can be said that every person should assess life cover according to his financial needs. For this you should keep in mind things like income, debt, savings, lifestyle, etc.
4. Decide your needs as per our age
As you age, your financial needs change. For example, the financial needs of a 25-year-old single woman will be different from that of a 40-year-old mother of two children.
Ideally, you should review your financial portfolio on an annual basis. Decide the protection depending on the stage of life you are in.
5. Share important information, do not hide!
While buying a life insurance policy, you should share every necessary and important information with the insurance company. The purpose of purchasing this policy is to provide a future support to your dependents in case of your demise.
With every information given honestly, the process of claim settlement is completed very easily. With this, the goal with which you make this purchase is fulfilled.
6. Research
You can consult your personal finance advisor for the selection of products. However, it is important that you buy only such products that meet your financial needs.
It is not right to buy any plan just for the sake of buying a policy. By doing your own research, there is a chance that there may be a significant difference between requirement and purchase.
7. Deciding company
Rather than knowing whether a company is very popular or not, it is more important to know what things the company has been in the headlines for. Ask people in your community about the company. Apart from this, attention should be paid to aspects like claim settlement ratio. Keeping these things in mind, you can buy insurance products from the right company.
The risk associated with human life has clearly come to light. In such a situation, more and more people are considering buying life insurance. Keep these things in mind while buying a life insurance plan for the first time. It is important not only for buying insurance but also for general financial planning.
