The life insurance sector has been booming since long ago. Not only the demand is increased, but the insurance companies have kept introducing new policies that offer several benefits to the policyholders in different ways. Usually, life insurance is availed to provide the financial protection to our loved ones in our absence. However, the insurance market is cluttered with different life insurance plans and people often confuse about which plan they should buy. In the prima facie case, all the insurance plans seem to be similar until and unless we compare them by their key parameters. Therefore, to help you compare the life insurance plans, here is the list of parameters.
Type of the Policy The primary constraint of any life insurance policy is its type. You can get the best suitable life insurance policy in the market if and only if you identify your needs. There are several life insurance types such as whole life insurance, term policies, traditional investment plans such as endowment plans, aggressive investment plans such as ULIPs, pension plans, child plans, money back plans, and so on. Each type has unique characteristics; thus, choose the plan carefully. Policy Benefits You can avail several benefits from different life insurance policies. The significant benefits can be enlisted as follows- Maturity Benefits: If the life insured survives the tenure of the policy, the insurance company pays out survival or maturity benefits to the policyholder. These benefits are guaranteed in some policies, defined at the inception of the policy. Death Benefits: If by misfortune, the life insured meets an uncertain event of the demise during the policy tenure, the company pays out the sum assured as the death benefits to the beneficiaries. Other Benefits: The life insurance plans offer several other benefits too such as different bonuses over a period of time, provision for choosing the riders, tax benefits etc. The premium of the Policy While comparing the life insurance plans, the amount of the premiums is equally essential. Plans like term insurance come at significantly low premiums whereas the cash-value plans can be availed at higher premiums. But premiums cannot be the only constraint, as term insurance has lower premiums but doesn’t offer maturity benefits. Thus, considering other requirements, decide what premium amount will be suitable. Tenure of the Policy Lastly, the policy tenure is also important as to provide the financial security to your family. Term life and money back plans usually have lower tenure than whole life and other cash value policies. In short, using these four constraints for comparison, you can select the apt life insurance policy for you. Make a wise decision by determining all the aspects of each of the policy and selecting the appropriate one.
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February 2022
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