If you are an adult who has a spouse, children, house or any kind of financial liabilities, then you should definitely consider buying an insurance policy. With an insurance policy in place, you will not have to deal with sleepless nights worrying about any kind of financial burden that your loved ones will need to deal with if you were to meet with an unexpected death.
Now the question is – what all should you be looking for in an insurance policy? How do you make sure that the insurance policy you are considering actually fits your needs? There are a ton of insurance policies in the market and they all have different terms and conditions. So, it is smart to conduct due diligence before you make your choice. Here are some tips on what you should look for in an insurance policy.
Immediate Payout
When you start looking for an insurance policy, you may get tempted by commercials that offer easy and quick coverage with no requirement of a medical examination. Since the application process does not contain too many questions and there is no need for an examination, you are very likely to qualify easily for these kinds of insurance policies.
However, you may want to note that such insurance policies typically come with 2- or 3-year waiting periods after the purchase before they will pay 100% of entitlements on death. If you prefer an insurance policy that starts the cover right away, then this is obviously not going to work for you.
So, make sure that your insurance policy pays out 100% of face value right from day one of purchase.
Affordability
Buying an affordable insurance policy is not merely important for now, it is also important for the future. That is because life may take you through tough times and it has been seen that the first thing people stop paying for in such times is life insurance.
If you buy an insurance policy that you can afford, you will have a better chance of being able to hold on to it even if you must make any serious cutbacks in your budget. This is important because if you allow your insurance policy to lapse, you may have to face incredibly high fees to reinstate. Not only that, you may not even be able to reinstate the insurance policy if your health condition has changed. So the bottom line is – Plan on an insurance premium that you can afford to keep paying in the longer run.
Conversion feature
If you are looking to get term life insurance, make note of policies that do not allow you to convert from term policy to a permanent one. This feature typically enables you to convert your term policy into a permanent plan without having to prove your health status.
Living benefits
With new kinds of insurance policies in the market, you can now use your life insurance in more ways even during your lifetime. Newer kinds of policies offer you the option of receiving payments if you are diagnosed with a chronic illness. Some companies even give you 20- or 25-year timelines at which you can receive some or full amount of your premium paid if you do not wish to carry the coverage any longer.
Now that you have some points to consider before buying an insurance policy, you can go out and make an informed choice.
