Life Insurance is a contract signed between the policyholder, i.e., an individual, and a life insurance company, i.e., the insurance provider. The policyholder pays a certain amount of premium at fixed intervals of time. The insurance company pays the beneficiaries the amount insured on the insured event, such as death or a benefit defined at the maturity of the plan.
It can be used in meeting the mentioned financial goals:
- Financial cover against life
- Post-retirement income for NRIs
- Pension or regular income post-retirement
- Children Education
- Purchasing a house
- Children Marriage
It is important to select the best insurance policy depending on the requirements, affordability, and convenience. Calculate the amount of loan coverage that is required and the type of plan that best suits you.
- For how much period of life coverage is required?
- What are the priorities you require to save?
Benefits of Buying Life Insurance
Let us know how a life insurance policy benefits the policyholders:
- It is a very helpful tool for your loved ones, helping to fulfil all your family desires even when you are not present.
- Investment-linked plans such as ULIP allow you to grow your finances and fulfil your dreams, like buying a new house, investing in real estate, planning a world tour, etc. They offer quite significant returns on the premium paid. Also, the amount to be invested in ULIP can be calculated using the Investment Calculator.
- The child insurance plan ensures a secure financial future for your child even when you are not present.
- If life insurance is bought with add-ons such as critical illness riders, you can also use the amount received under the rider to pay for the respective medical expenses.
- Retirement investment plans will allow you to secure your post-retirement time, allowing you to pursue your hobbies and interests after that.
- You can also avail yourself of tax benefits on the premium paid towards life insurance and proceeds thereof under the provisions of the Income Tax Act, 1961.
Process to buy Life Insurance Online
After knowing What is Life Insurance and analysing its pros and cons, let us now have a look through the process of buying life insurance online:
Step 1: The official webpage of the insurance provider should be opened to find out the premium amount. Next, click “Calculate Premium.”
Step 2: The personal details should then be entered, such as, name, contact number, gender, date of birth, smoking or non-smoking status, annual income, etc. Next, click on the tab “Calculate Now’.
Step 3: Input the amount of insurance along with its tenure and then click “Proceed”.
Step 4: Select the additional riders you want to be included, and then click “Proceed” again.
Step 5: Complete the insurance policy form with the information required and click the tab “Proceed”.
Step 6: Select the desired mode of payment and click the tab “Pay” to complete the transaction.
Life Insurance Buying Guide
Life insurance should be taken as a blessing that ensures the financial well-being of one’s family. However, choosing the right insurance policy can sometimes be complicated; hence, here is a concise buying guide that will assist you with the process.
Step 1: Purpose Identification
Identify the main objective of purchasing life insurance, which can either be to secure the future of your family members in your absence in the event of sudden demise or to ensure the financial security of your loved ones or your child’s education.
Step 2: Goal Definition
Next, choose the type of insurance plan you wish to buy from the list of available plans, such as term insurance, retirement plan, endowment plan, child plan, or savings plan.
Step 3: Coverage Calculation
Also, future life events like marriage, children’s education, retirement planning, and inflation should be kept well in mind. Experts recommend insurance coverage of at least 10 times your annual income.
Step 4: Consider the Policy Tenure
Consider all the opportunity costs of buying life insurance for an extended period of time while reducing the premium. Ensure that the policy tenure aligns with your needs.
Step 5: Explore Additional Riders
One can enhance the insurance plan by opting for add-ons like critical illness, accidental death benefits, and premium waivers. It can be availed of by incurring an additional cost, which will affect the overall premium.
Step 6: Ensure Accurate Form Submission
Complete the form accurately and then submit it along with the documents. If any incorrect information is provided, the application and claims will be denied.
Step 7: Evaluation of Life Insurance Cover
Evaluate how much coverage is required with an insurance provider based on income, dependents, liabilities, and expenses. They will help you choose the appropriate one amongst those available in the market.
Step 8: Comparison of Insurance Plans
By comparing all the insurance plans available, one can choose the most suitable plan for one’s financial requirements.
Reasons to buy Life Insurance Online
Buying a life insurance plan online is an efficient, cost-effective and fast process. Over the years, life insurance companies have assessed the client’s requirements and have completed the online process. Let us discuss its features and benefits:
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Direct Buying
Customers should buy life insurance through distributors if they prefer online mode. However, for offline purchases, the commission amount that would have been paid to distributors for online purchases an be saved, hence making it cost-effective.
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Informed Deal
When buying an insurance plan, one should always first compare the available plans in terms of benefits offered, features, coverage, renewal, etc. After analysing all the pros and cons of the deal, one can choose the apt plan that would meet all their requirements.
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Access to Online Reviews
Get access to the reviews posted online by various customers about their experiences with the insurance company. Also, don’t forget to know about the insurance plan and the insurance company that you are choosing before finalising the decision.
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Automated Services
The online platform is not restricted to sales; it is also a fast and competent servicing channel where a policyholder can avail of online services. These services include downloading the policy document or brochure, getting insurance plan quotes online, renewing the policy online, paying the annual premium, tracking investments, and making claims online.
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Customer Support
You can get 24*7 customer care assistance while buying an insurance policy online, where you can resolve your queries, complaints, or suggestions.
Conclusion
Provided the benefits and coverage it gives, life insurance can be a value addition to the investment portfolio. So, once understood, consider buying a policy suitable for goal accomplishment and financial safety. Also, with the different plans available, one can also save taxes due to the amount of premium and payouts received, which might have tax-saving benefits under the provisions of the Income Tax Act, 1961.