Simplifying Life Insurance in India
13 Questions You Must Ask Your Life Insurance Agent
source: thestatesman
You can see a life insurance policy as an investment towards your family's financial security. There are several insurance companies from which you can buy a policy to get life cover. Since you want to ensure optimum protection for your family, you should carefully choose a plan after undergoing thorough research.
Moreover, you should also know the right questions to ask an insurance agent to ensure that the policy they provide will suit your requirements.
Essential Questions to Ask Your Life Insurance Agents
1. How Many Types of Life Insurance Policies Does the Insurer Cater?
Rather than blindly purchasing what the insurance agent suggests, you should ask for all the plans the same insurer provides. Different types of life insurance policies are available in the market, all with unique features. For example, you can get unit-linked insurance plans (ULIPs), money-back plans, endowment plans, whole life insurance plans, child insurance plans etc., under the large umbrella of life insurance policies.2. What Are the Guaranteed and Non-Guaranteed Benefits?
Life insurance policies provide different benefits to policyholders. Among them, some benefits provide a guaranteed amount as a payout, while some other benefits do not. For example, the sum assured in a policy is a fixed amount, whereas the maturity amount and death benefit may not always be guaranteed amounts. Before the policy purchase, you should ask your insurer about what guaranteed and non-guaranteed benefits you will get against a particular plan.3. How Much Life Insurance Coverage Should I Opt for?
One of the essential questions to ask an insurance agent is the amount of sum insured you should ideally opt for to ensure your family's financial security. It may depend on various factors, including your debts, the number of dependable family members, regular lifestyle expenses, etc. You may also need to factor in your additional financial goals, like your child's education and marriage ceremony.4. Can I Add Riders to my Basic Life Insurance Plan?
Riders are additional benefits that you can include with your base life insurance plan to broaden its overall coverage. Although you will have to pay an extra premium, you may like to opt for them, looking at the additional security you get against the added price.
There are many other add-ons that you can purchase, such as permanent and partial disability cover, accidental death cover, critical illness cover, premium waiver add-ons, etc.
5. What Will Be the Premium Against Your Benefits?
Another important question to ask an insurance agent is the total premium amount you will have to pay. Two individuals may have to pay different premium amounts for the same sum assured and maturity benefit. This is mainly because the insurance companies assess several factors, including age, lifestyle habits (smoking/drinking), current health status, occupations, etc., to determine the premium.6. Does a Life Insurance Policy Offer Any Guaranteed Maturity Benefit?
In a life insurance plan, you get both the sum assured and maturity benefits. While the sum assured is a fixed amount, the maturity benefit may not be so. The maturity amount changes depending on the bonuses and the fund in which your insurance company invests a part of your premium.7. Which Alternative Premium Frequencies Does One Get to Choose From?
There are 'no-lapse insurance' policies in which you must pay your premium once to get lifetime coverage. However, since the premium amount may be significantly high, you may pay according to your chosen premium frequency. You can choose policy premium frequency as monthly, quarterly, annually, etc., at your convenience.8. How Can the Family Members Claim the Sum Assured?
You should ask your insurance agent about the claiming procedures for the death benefit. You can also enquire about the average turnaround time of your policy claim. If the turnaround time is lower, you can ensure that your loved ones will get the death benefit payout quicker.9. How Many Beneficiaries Can You Add to Your Life Insurance Plan?
Beneficiaries are the only eligible person who can receive the death benefit of an insurance policy if the insured individual dies. Nevertheless, there is also a chance that the beneficiary passes away before the policyholders. This is why insurance companies generally let their customers add primary and contingent beneficiaries. The contingent or the secondary beneficiary will receive the death benefit if the primary beneficiary dies before the policyholder.10. What Is the Lock-in Period?
The lock-in period is until you cannot withdraw the investment portion of your total paid premium. This is especially applicable for policies like ULIP, in which the insurer keeps aside a part of your premium in a particular fund.11. What Is the Free Look Period?
The free look period is a time frame within which you are entitled to terminate your life insurance plan without paying any penalty. In case the terms and conditions of the insurance plan do not meet your expectations, you can opt out of it within this period. However, since the free look period varies across insurers, you need to know about it before purchasing a plan.12. What Are the Available Bonuses in the Life Insurance Plan?
Bonus refers to the rewards you can get against your life insurance plan. In case your plan provides bonuses, you can secure additional amounts as maturity and death benefits. There are also different types of bonuses that your life insurance agents may provide different types of bonuses, including simple or compound reversionary bonuses, terminal bonus, interim bonus, etc. You need to know about all these in detail before buying the plan.
A life insurance policy is a long-term agreement between you and your insurer. It is integrally associated with the financial interest of your family. In case of your unfortunate demise, the insurance company must pay the beneficiary a guaranteed sum. So, you should stay prepared with some necessary questions to ask an insurance agent before purchasing an insurance plan. It will help you assess how beneficial the policy will be for your near and dear ones.
13. Which documents do I need to produce to purchase a life insurance plan?
Following are some of the necessary documents that you will have to submit to your insurance company while applying for a life insurance plan:
- Age proof
- Photo identity proof
- Residential proof
- Medical diagnostics
- Income proof
- PAN card
- Passport-sized photograph
Frequently Asked Questions
Which documents do I need to produce to purchase a life insurance plan?
Following are some of the necessary documents that you will have to submit to your insurance company while applying for a life insurance plan:
- Age proof
- Photo identity proof
- Residential proof
- Medical diagnostics
- Income proof
- PAN card
- Passport-sized photograph
Can I get tax benefits on the premium of a life insurance plan?
What is the basic difference between term insurance and life insurance policy?
What will be the consequence if I miss the premium payment of my life insurance policy?
What is the difference between participating and non-participating life insurance policies?
What is the reinstatement clause in a life insurance policy?
What is the concept of life insurance underwriting?
How do life insurance and general insurance differ from each other?
Is it good to buy a rider with life insurance?
Is there a limit on the number of beneficiaries?
What is the difference between ‘Irrevocable Beneficiary’ and ‘Revocable Beneficiary’?
What do you mean by the contestable period in an insurance policy?
The contestable period is a specific time frame, typically one to two years from the policy start, during which the insurance company can investigate and potentially deny claims if they find errors or misrepresentations in the application.
The contestable period in a life insurance policy refers to the initial one to two years after the policy starts. During this time, the insurance company can thoroughly review the policyholder's application for any errors or misrepresentations. After this period, the insurer's ability to investigate claims for potential inaccuracies is significantly limited.
What is the meaning of cash surrender value?
Cash surrender value in life insurance is what you receive if you choose to end your permanent life insurance policy early, before it reaches maturity or pays out upon death. This value consists of the premiums you've paid plus any interest earned, minus fees charged by the insurance company.
Not all life insurance policies include cash surrender value. Permanent policies like universal and whole life allow you to accumulate cash value over time, which can be accessed through withdrawals or loans. Term life insurance policies do not build cash value and do not provide this option.
Can a beneficiary claim the policy if the policyholder has been missing for multiple years?
Important Guides related to Life Insurance
Disclaimer
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.
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