Factors to be Considered While Acquiring Life Insurance

By: John F William


Life insurance is one of the most important investment decisions in a person's life. Life is full of uncertainties; one never knows with turbulent events in life. Though one has no control over unfolding events of the life, ensure some level of security and safety to your loved ones with term life insurance. Whether you are a single parent, aspiring professional, established entrepreneur or retiring candidate, having a well-outlined financial plan can secure your future and that of your close ones. Novices with no prior experience in acquiring insurance should first educate themselves about insurance before making any overtures. Listed below are some prime factors that need to be considered while procuring life insurance.

Before acquiring any financial plan, a person needs to remember that insurance is protection-cum-long term investment and saving tool. First and foremost, an applicant needs to define their needs, what exactly they are looking for, whether planning for their child's education, planning future retirement, securing loss of property or life. Once an applicant has outlined their needs, they can then proceed to find an ideal insurance coverage that best conforms to their needs.

Once the applicant has determined the kind of policy they are looking for, they should then proceed to find the same. Before short-listing any particular insurance carrier, it is highly recommended to take time out to conduct a background check on the company. Most insurance companies will have given comprehensive and pertinent information about their services on their website. Policy structure, quality of customer care support given, scope of network and affiliates, price range are some prime attributes to look for.

Contrary to popular belief, term life insurance is very different from standard life insurance. Term life insurance is generally drawn for a definite period, whereas life insurance lasts for the lifetime of the policyholder. Time duration of term policy can vary anywhere between 10 to 20 years. After the completion of stipulated period, policyholder has either the option to renew the policy for the same period or a new term. One prime merits that adds to the popularity of term policy is the fact that the premium rate remains stagnant throughout the policy term, irrespective of current market condition.

Premium rate is another prime factor that needs to be considered. Several aspects influences the final premium amount of the policies like period of insurance, age, marital status, annual income, medical condition, type of policy, amount of coverage and more.

Premium charged by different insurance carrier varies to a great extent. The best way to ensure applicants get value for their money invested is by getting price quotes from multiple carriers and comparing prices. There are several websites offering instant quotes from top carriers in the industry in simple, prompt and hassle free manner.

Other than that, solvency ratio, fund performance and claim settlement ratio are some other factor to be considered. Many experts advise applicants to consider claim settlement ratio while buying an insurance product. It is important that a company offers a healthy settlement ratio. For further details and information on the same, client can seek assistance of accredited service personnel.

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Life insurance is a great way of securing your family's financial future. Click here to know more about different benefits offered by life insurance.

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