It is ironical that we rely wholly on the agent for a financial product as critical as life insurance, right from choosing your plan to filling up the form. However, it is imperative that we make informed decisions while buying a life cover
Handy Attachments
You can attach riders to an insurance cover at a cost. These riders could be for accidental benefit, critical illness benefit, or even disability benefit. At the occurrence of any such mishap, the rider provides coverage over and above that provided by the plan.
Disclosures
Fill out the application form yourself and disclose all material information related to your health, income and family history-claims can be repudiated if the insurer proves that it was supplied with inaccurate information.
The free-look Period
You can return your policy, if you are dissatisfied with it, within 15 days of receiving the policy document. See if the agent gave you correct information about the policy’s tenure, years of payment and exit clause, among others.
* You should be the one laying down your priorities. Ensure that that the agent does not thrust an insurance plan on you. Your life goals and risk profile should be discussed in detail. Also ask for brochures and benefit illustrations, and ask the agent to explain everything, including the restrictions, conditions and exclusions that may apply.
* The insurance policy could be traditional in nature, such as an endowment plan, or money-back, which suits those looking for protection as well as savings in conservative assets.
* Another option could be unit-linked insurance plans (Ulips). These offer greater transparency in terms of costs and fund options, and have higher return potential.
* Term insurance plans are however your best bet as they provide high coverage at low cost.
* Insurance is about protection and savings — it is not an investment product designed to deliver extraordinary returns.