How to choose the right life insurance policy?

NEW DELHI: The coronavirus pandemic has brought human vulnerabilities to the fore, heightening the need for life insurance and its benefits.

Apart from term, and life-term insurance, several other insurance policies offer financial security, depending upon the needs and financial situation of an individual.

Indraneel Chatterjee, co-founder, RenewBuy Insurance, said, “There are several types of Life insurance policy provided by the insurance companies to its customers. For instance, the policies are endowment policy, money back policy, Unit Linked Insurance Plan (Ulips), child insurance policy, group life insurance, retirement plans, etc.”

Today, a majority of customers prefer insurance to be a necessary safeguard against unforeseen circumstances.

„There has been a notable shift in customers’ perception of life insurance as a risk cover rather than an investment product. Financial anxiety was also evident during these unprecedented times,” said Parag Raja, managing director and chief executive officer, Bharti AXA Life.

„All this led to a significant spike in online insurance sales and much greater levels of personalisation in terms of customer experience and value proposition,” he added.

How to choose the right policy?

It is always beneficial to start young and plan investments according to your financial goals.

“It is very important to assess an individual’s need for insurance before choosing the policy. To do this, one should first set goals, needs and expectations depending on the requirements of the family and accordingly set aside money for the same. It is also important to compare the claim settlement ratio of different companies so that you choose the best one for you and your family. Re-assessing insurance needs from time to time is also important to safeguard family in case of emergency cases,” explained Chatterjee.

“It is beneficial to invest in both life and term insurance as the former provides investment returns along with life protection while the latter ensures you secure the financial future of your dependents with a nominal premium,” Raja added.

It always works best to take expert advice.