Life Insurance India – Questions to Ask Agent, Who should buy, When
Who Should Buy Life Insurance
There are two scenarios when you should buy life insurance:
1) You have dependents
2) You have liability
A person has dependents when he gets married, has children and parents to take care of during their ageing days. This is the time during which person should buy life insurance and understand it’s importance since when he is not around, life insurance would come to the rescue to the family and provides security as well as savings. Person becomes liable when he purchases a housing loan, starts new business etc. Few of the important benefits are:
- Provides steady income source for the family of the policy holder
- Tax benefits while buying and exiting the policy
- Covers your mortgage which comes to rescue in case of unfortunate event so that the burden of repaying the loan does not come on the shoulders of your family
- Many life insurers also offer rider benefits or medical insurance which protects life threatening diseases and also covers hospital expenses
When to buy life insurance policy
This question is most commonly asked by a first timer. And answer is very simple – in the early stage of life. Because as your grow older the premium also increases, it’s easy to get and most importantly possibilities of getting health problems increases. Ideal age to buy a life insurance policy is before you reach the age of 35 years.
What to ask life insurance agent before buying the policy
One of the most important thing to do before choosing a life insurance policy is researching the product in detail and that’s what policy holders don’t do and instead blindly believe in the life insurance agent and the only thing they do is sign the cheque. You should be ready with each and every query you and have in your mind and confidently ask those to your agent in order to avoid any problems that might arise in the future. Although you cannot get insurance policy that suits all your requirements but here are the most important questions to ask your life insurance agent in a confident manner in order to choose the best:
- Which is the best policy that covers my requirement: Normally an agent will try to convince you to buy a policy which is very new in the market or high in demand. But what works best for other will never work for you always. And since these days agents make use of calculators to suggest best policy by entering your personal details, the result will never be a solution to your query. Therefore always ask your agent to first listen your queries and then suggest best policy according to the coverage, premiums to be paid, optional riders. Also ask for differential factors in each policy.
- What are the different policies available: Sometimes you can choose best policy by understanding all the policies such as ULIPs, term plan, endowment policy. If securing your financial future is your ultimate goal then endowment policy is the right choice whereas for a person with a limited budget, term plan is the best suited policy.
- If I choose a policy what benefits will I get: Even though you manage to buy a best policy based on the sum assured and minimal premiums, your should also confirm about factors such as premature withdrawal, penalty in case of late payment, other exclusions. Sometimes these factors are not revealed by the agents and in case they do disclose, you might have to opt for other plan due to disinterest in certain terms and conditions of the policy you have finalized.
- Do a personal verification check of your agent: Get to know the agent’s educational qualification, experience, policies sold, client’s name and most importantly whether he is an authorized person to sell policy. If possible, get in touch with 2-3 clients to understand the relationship the agent had with them and quality of the service offered and any issues faced. An agent who is a certified financial planner/advisor/consultant, underwriter is more knowledgeable and would provide best service by considering your present financial condition and future needs. Use all your sources to verify whether the agent is employed with two or more firms. In case of even a small doubt about an agent, contact the insurer directly.
- Ask details of the insurer: Always get background check of the company, read online reviews, employee qualifications, financial strength etc. Having all these details can give a good sense of the company you would be dealing with.
- Whether all the details would be provided in written and with authorized person signature or not: What agent guarantees is not what you always get. So always get everything in written irrespective of whether the agent is your trusted friend/relative. Because in case of agent’s job change, you’ll have to deal with the company on your own.
M S Bhatia
pl tel me while buying term insurance why rider like accident insur. permanent disabailty critical illness insr. required