It happens many a times in our life when we wonder if we have taken the right decision or not concerned to our financial life. Our mind is filled with many uncertainties on whether we made the right investment decision, especially, if it is something long term like insurance. Since insurance is a long term contract of 10 or even more years, it is difficult to make amendments in these contracts during the policy term. So, it would be more comfortable for us to consider some factors before taking an insurance plan.
These factors are as follows-
1. Need based investment : The standard rule is that the life cover should be 10 times of our annual income such that our family is not impacted in case something was to happen to us. Besides, we need to define our need like our child’s education or our retirement plans and accordingly buy a policy which will help us in future.
2. Background check and due diligence : Once we have decided on the policy plan, a background check of the company is also necessary. Do go through things like policy structure, customer service capacities, scope of network, on-line platform, etc.
3. Fund Performance : A company with a good fund performance will have a consistent track record with Fund performance of neither being too unpredictable nor extremely risky.
4. Claim Settlement ratio : Always provide true information to the insurance company so as to get a good claim settlement. An average claim settlement ratio of insurance sector is 80%.
5. Understanding the policy : Last but not the least, one should understand the features of the policy buying, specifically those related to the policy terms and conditions, premium paying term, advancement date and charges.