Life insurance policies work to provide financial security to your loved ones after your death. The money can be used for different things depending on the situation, such as clearing off debt, funding the retirement of the spouse, paying for the education of children, and more. There are several life insurance policies available in the market today, and several of them claim to be the cheapest out there.
However, buying the cheapest life policy might not be the best option, as it may make room for several vulnerabilities in the policy. Here, we will look at why a cheap policy might not suffice your coverage needs, and also explore the other factors that you might want to avoid while choosing life insurance policies.
Why a cheap policy is not the best
The whole point of a life insurance policy is to provide enough finances to go by. However, not all policies payout enough to serve that purpose. Policies that are labelled as cheap and come with the lowest premiums tend to offer a low payout at maturity, and a low payout would be the last thing would ask for in the time of financial distress.
Besides, a cheap policy might also be void of other benefits, such as disability and sudden death claims, that otherwise form an essential part of a good insurance policy. It is best to go with a plan that offers all-round, comprehensive benefits.
If you are opting to pay regular premiums for a policy, then you might as well opt for one which does not sweep away the benefits under the deception of a low premium. Besides, cheap policies also tend to have hidden charges, which means that even though you are paying low premiums, you might end up paying some extra money.
Do not underestimate your insurance needs
One of the other factors that you have to be wary of the amount of death benefit that you have chosen with the policy. Do not simply pick a number out of thin air. If you do not spend some time calculating your cover amount, then you may end up running into more trouble in the future. You may not need much coverage if you and your family already have access to a sizeable amount of money. However, if you have kids, debt, and other financial obligations to take care of, then you might want to opt for a policy with a higher payout.
Here, you must especially watch out for insurance policies with low premiums. Policies that are cheap and come with surprisingly low premiums might shy away with the death benefits, thus hampering the whole point of purchasing an insurance policy. While it might be highly tempting to opt for a cheap plan, it will suit your interest to go for a policy which as a solid financial backing and a higher claim settlement rate .
You should also opt for a higher payout if you have a spouse who does not earn money. However, it might be an added advantage for you if you decide to get a policy for your spouse as well — an added financial backup in case of their unfortunate death.
In case you are opting for multiple insurance plans, make it a point to provide correct and same information across your policies. This will minimize the risk of a claim being refused.
Future Generali Life Insurance has a free online calculator which can help you plan your insurance needs accordingly. It is present in 117 locations across the country and boasts of a high settlement of death claims — as high as 95.18 percent in FY 2018-19. Since its inception, it has sold over 13.8 lakh insurance policies and holds around Rs 3,775.6 cr worth of assets under management. With more than 7,600 registered advisors and a hassle-free application process, purchasing a Future Generali Life Insurance Policy is a walk in the park.
Future Generali Life Insurance provides a wide range of coverage — covering different risks, disability, and terminal illness. Because of the numerous features and benefits it offers, it is one of the best options to safeguard your loved ones against any dire circumstances.