by bhushan pandey
Published Wed, Sep 13th 2017, 09:13 | Finance
Life insurance is one of the most important products we buy to offer financial cover to our loved ones. There are varied types of policies available in the market for customers. Everyone want to know how life insurance policy works? A Life insurance policy gives necessary financial support to your family members in case you meet an untimely death. It’s an agreement between you and the insurer. You agree to pay your monthly premium, and the insurance company in return will pay your beneficiaries the amount of coverage you applied for in the event of death. If you stop paying the premium amount at any point of time the company will no longer pay the death benefit.
Insurance companies offer many products such as term life, whole life insurance, endowment policies, money back policies, etc. Of the various policies available term policies are quite affordable and offer good financial cover. However, experts suggest insurance policies are not an off-the-shell commodity, you should choose a product based on price, no matter what television advertisers might imply.
When people are young and yet to start their family, they have relatively fewer responsibilities. There are no dependents which make it easier to invest their surplus income in earning better returns. Life insurance sectors cater individual with market-linked investment plans as well. These are dual protection plan wherein a part of your premium goes for life cover and the rest gets invested in the market linked funds. Thus, when you invest in a younger age in these plans it comes a perfect time to start saving towards goals like your marriage, investing in a home or take a suitable health cover to protect you against financial emergencies.
It's important you share true and right information with the insurance firms at the time of policy purchase. Bad lifestyle habits such as smoking or drinking alcohol impact your health negatively and increase your mortality risk. If you hide such information at the time of insurance purchase chances are you might receive shorter claim or claim rejections as well. The insurer might offer you cover at slightly higher costs but the amount will be assured and help you or your family in meeting withdaily survivals and other financial goals.
As the market trends change or your financial needs alter, certain conditions and clauses will differ in the policy. So, it’s better to know the impact of the changing times and market should be cleared in advance.
Not all policies need a one-time premium. While buying a life insurance policy, you have the flexibility to choose from monthly, quarterly, half-yearly or annual premium payment mode. Choosing annual mode proves to be a cost-effective option rather than opting for other options as you make payments at one go and save on applicable taxes and other processing fees.
Online policy purchase helps you avail various discounts. A life insurance is the best gift for your loved ones when you’re not around. It’s an essential part of a prudent financial planning; as it gives the necessary financial help to your family in the event of your untimely demise.So compare life insurance policies and plans from top companies and buy online. Save money on premium costs, now!