Insurance is critical for everyone. It is important to purchase an insurance plan at an early age since the premium is low when you are younger. Have you get older, the premium will increase as well as health conditions and dependents on the insurer.
Let us take a look at the features of life insurance policy.
One of the main features of life insurance is that it ensures the life of a person known as the insurer in financial terms. Now when we say that the life is insured, it actually means that earning potential of that person – the insurer is insured.
In case of the death of the insured, the maturity benefit that is the sum insured, goes to the beneficiary of the insurance policy. This goes a long way in assisting the dependents of the insured in their financial well being.
Another features of life insurance plans is that if the insured survives the maturity term of the insurance policy, the total amount, the gross proceeds are credited to him and helps in achieving important life goals such as higher education, marriage, vacation, down payment for a home or home improvement.
A guaranteed additional benefit of a life insurance policy is the benefit given in addition to the maturity payout.
Maturity payout is the amount that you get when the policy term is over. This and the guaranteed benefits are payable either in the death or if the policy has matured before the death of the insured. The guaranteed benefits differ according to the various insurance policy.
Non guaranteed benefits are sometimes provided if the life insurance is linked to a market value. There is some additional amount that is given to the insured. This could be annually or at the maturity of the insurance policy.
5 Things to keep in mind while buying life insurance
One of the most important criteria that one needs to consider while buying life insurance is the claim procedure. In case of the death of the insured, how quick and how seamlessly one can claim the death benefit. Does the company have a toll free number, and email address, a physical office easily accessible. Do they have any online claim process that would make the disbursement much faster?
The second criterion in choosing a life policy is the claim percentage of a company. A higher claim disbursement percentage is the better policy to choose. A percentage of 90% and above is good because that is the benchmark that shows that the company rejection claim percentage is less.
The third criteria is the surrender value. In case the insured is unable to pay the premium of a policy throughout the term, the surrender value would at least give a part of the premium amount paid for the term of the policy instead of keeping the entire premium.
The fourth criteria are the reputation of the company. Life insurance should be purchased only from reputable companies that are regulated by the IRDA who is the regulatory body of the insurance companies.
The fifth criteria are the disbursement process of the company. How quick maturity proceeds are given into the account, the death benefit claim and settlement because this is the main reason why life insurance is taken.