Buying insurance has never been tougher!
Don't jump at the first scheme offered to you or get carried away by the glossy brochures and sentimental talk about protection for your family.
Ask your insurance salesman or advisor a few important questions
- Is there any other policy with the same cover but lower premium?
A term policy requires you to pay a premium every year for the number of years you took out the policy. If you die during this period, your beneficiary gets the money. If you survive, nobody gets anything.
- What portion of the maturity benefits are guaranteed?
Maturity benefits are generally divided into three parts:
A) Sum assured (assured)
B) Guaranteed bonuses (assured but generally never given for more than five years)
C) Reversionary bonuses (not assured)
- Are the advertised returns of the policy for real?
Insurance companies advertise their bonuses or returns in bold letters.
- Is there a free look period?
Once you buy the plan, companies offer a free look period for about 15 days.
You can study the policy document thoroughly. And if you are not comfortable or if you have been deluded, return the policy promptly.
- What are the exclusions to the policy?
The exclusions sheet is very important and informative. Read this piece of paper well.
Generally, pre-existing illnesses in a medical plan, suicides within a year of policy and death while partaking in a criminal activity are excluded.
Take a look at the rider exclusion sheet. A rider is an optional add-on which can be attached to the policy. For example, a critical illness rider can be added to your main policy. But you will have to pay additional premium for this.
- Can I backdate my policy?
By backdating your policy, you save by paying lower premium every year.
- Is there a discount on the yearly premium?
Companies offer up to 3% off if the premium is paid yearly as opposed to monthly or half-yearly.
