Tips To Choose The Right Life Insurance Policy

how to choose right life insurance policy cover

A life cover is basically a term that is used to describe an agreement that covers the risk of your life. It is a policy that will provide lump-sum cash at the time of your death or if you are diagnosed with a critical illness. In order to ensure that your loved ones are financially secure in your absence, you need to buy a life insurance cover. When you buy a life cover, you have to pay a monthly premium or a lump sum to the insurer for the same. The cover will help meet the monthly expenses of your loved ones and will ensure that they do not end up in a pile of debt after your demise. This money can be used for the cost of a funeral, for the living expenses of your family and to make the mortgage payment. 

Types Of Life Cover 

There are many types of policies available in the market. These policies can give you a lump- sum payment or a regular monthly income. In order to decide the type of cover you need, you will have to consider your age, financial requirements and the extent of coverage you are looking for. 

1. Term Insurance

This is an insurance cover which protects you for a specific period of time. In case of your untimely demise during this particular period, the entire sum assured will be given to your family. This will ensure that the lifestyle of your loved ones is not compromised due to your death. 

2. Group Life Cover 

A group life cover is generally provided by the employer for all their employees. It is a basic cover which will protect the employees in case of illness. However, this cover is not adequate for the financial security of your loved ones. 

3. Critical Illness

A critical illness cover will provide you a lump sum amount for certain medical conditions or illnesses which are specifically mentioned. The article “Friends Life Life Insurance Reviews 2019” from Insurance Hero explains that a critical illness policy provides coverage for the diagnosis of a critical or terminal illness. You can purchase a basic insurance cover and enhance its coverage with a critical illness cover. This will ensure that you are always protected in case of any medical emergency. 

4. Above-50 Plans

This is an insurance cover which is designed for those who are above 50. The cover will help you meet the cost of funerals and will help pay debts if you want to leave some money for your loved ones after your death. It is an ideal cover for those who are looking to meet the expenses at a later stage in life. 

5. Whole Life Plan 

As the name suggests, a whole life plan will cover you for your entire life and will help meet your debts or leave behind money for loved ones. 

Choose The Right Type Of Insurance Cover 

1. Your Requirements

Before you decide on the type of cover you want to purchase, you need to consider your requirement. Why are you buying a cover? Do you want to meet the funeral cost? Do you want to provide financial security for your family? Do you want to ensure your savings are not wiped off in case of a critical illness? When you answer these questions, you will be in a better position to choose a cover that is ideal for your needs. 

2. Coverage

Consider your age when you decide on the coverage. A term plan will only cover you for a specific period of time while a whole life plan will cover you for your entire life. Additionally, a critical illness plan will ensure the expenses in case of critical illness are covered. Estimate your health condition and your financial requirement when you choose the coverage. 

3. Amount Of Financial Support

You are buying an insurance cover to ensure that your loved ones are secure in your absence. You need to consider the amount of money that your family will need when you are gone. If you are the only breadwinner in your family, you will have to consider the annual expenses of your family and then decide on the sum assured. 

Choose The Best Life Insurance Policy

Buying a life cover has a number of benefits but it is important to remain patient and carefully choose the type of cover that is ideal for your needs. Do not rush this decision because it is a one-time investment you are making for yourself and your family.

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