Do your homework and make an informed choice

Always buy insurance from companies that have a healthy claim disbursal record and a proven consumer-focused approach.

Most life insurance plans are long term commitments and might have a significant impact on your short term and long term finances. Therefore it is important to choose a policy with care and ensure that it is chosen for the right reasons.

Life insurance is not just a tax saving tool or a money making mechanism, it is about protecting yourself and your family from unforeseen financial circumstances arising from the death or disability of a loved one. (Also see: Why should you avail life insurance)

Here are a few insights that will help you when investing in a life insurance policy:

• Research before you buy
  Start by analyzing your current finances. Once you identify the gaps, research to zero-in on the type of policy, cover and insurance company that suits your requirements. Compare the features, benefits and clauses of the plans. You can search online for the ratings and reviews of the product and the company you are planning to engage with. You can also consult your financial planner for the same.
• Buy insurance from the right place
  Always buy insurance from companies that have a healthy claim disbursal record and a proven consumer-focused approach. If you are buying your policy online, take your time to make an informed decision. If you are buying from an advisor, ensure that you get all the relevant details about your plan.
• Read the policy document
  On receiving the policy document, read it thoroughly. Understand the clauses, terms and conditions, the inclusions and exclusions. If you have any questions, get them clarified from your advisor or the insurance company. Keep the policy document safe.
• Ask Questions
  Throughout the process, ask as many questions as you like. It is your hard earned money, and you have all the rights to know where it is being invested and what you can get back.
• Buy insurance you can afford
  Your insurance premium needs to be an amount that is well within your budget. At times, you might not be able to get the required cover with an endowment or a ULIP alone. You can always start with the premium you can afford and gradually build more cover as your investable income increases.
• Be aware of your rights
  There are certain rights your life insurance policy grants you, like a free-look period and renewability. You can check the official IRDAI website on Consumer Education www.policyholder.gov.in to know more about these rights and make sure that you exercise them.