You may have repeatedly heard this line – ‘Read the offer document carefully before investing’. Be it any form of investment; it’s always good to clear your queries before-hand. Make sure you buy a life insurance policy only after you have asked the insurer all necessary questions about it.
Let’s find out what are some of those critical questions that you need to ask your insurance company.
- How much coverage do I need?
Before randomly buying any policy, you need to understand what the short-term and long-term financial goals you possess that would be resolved with life insurance solutions. Asking this question also helps figure out which plan would be more suitable for you. The plan coverage that you receive can be used towards providing your family with financial security, and also wealth creation for a long term.
- From different plans, which plan will suit my needs? How would it benefit me?
Assessing the gap between your assets, liabilities, and standard of living; spending habits are some of the ways to understand the right plan for you. Based on your goals and objectives, you would be able to choose a suitable plan for you such as a term, whole life, endowment, pension, ULIP, traditional or cancer protect plan.
The benefits of the plan would vary depending on your specific needs. You need to ask the insurer how much premium you would have to pay, the mode of paying the premium (regular or single), how would you/your beneficiary receive the sum assured amount at the time of maturity or in case of your demise.
- Would the premium change in the future?
There would be no change in premium of a term plan unless a clause is mentioned in the policy related to change in premium. Unfortunately, if you get a life-threatening disability (smoking/drinking habit), the insurance company may apply a rise in premiums (premium rise).
- What are the exclusions in the plan?
The factors that are not covered under your policy are called as exclusions. The list of exclusions is mentioned in your policy wordings. If it is found that your claim falls under the exclusion list, then your claim stands to get rejected. The exclusions of a life insurance policy vary from one plan to another. It is always suggested to learn about the inclusions and exclusions of the policy from your insurer before you decide to buy the plan.
- What is the lock-in period?
Your policy has a specific tenure. In the case of ULIP and endowment plans, you have a lock-in period, during which you are not allowed to withdraw your invested amount. Once the lock-in period is complete, you can withdraw the amount.