How to Analyze Your Options Before Buying an Insurance Policy – Forbes Advisor INDIA

In this world full of uncertainties, you must be sure to protect your loved ones. For the feeling that even in the worst case scenario, your family will be financially secure. Plus, you can effectively secure their future when you make a wise and informed policy buying decision.

With a myriad of insurance companies and hundreds of policies available, deciding on the right plan and the amount of coverage you need can seem a bit confusing. If you’re in a dilemma about which policy is right for you, the following tips will help.

Evaluation is key

Make a careful assessment of your needs. It is essential to understand the type of policy you want. If your primary goal is to protect your family’s financial security, you should consider purchasing a comprehensive insurance plan at a fair price.

Consider investing in a unit-linked insurance plan (ULIP) if you want to save money for your child’s education or to buy your dream home. You can also open a pension account, which will provide you with a steady stream of income once you retire.

Review of your coverage

It is essential to assess your insurance coverage at different stages of your life. As a basic principle of financial planning, one should purchase life insurance to cover all of one’s financial liabilities. Coverage should be large enough to pay off all outstanding loans, pay major expenses and also generate enough income to meet families’ living expenses without compromising their standard of living.

If you have a home loan, be sure to purchase term insurance for the same amount. They say a wise man saves for a rainy day. But a wiser man saves to ensure that his savings reach their intended recipients as he intended if he were still alive. A term insurance policy can cover all of your EMI payments and other financial obligations, even while you’re away.

Compare your plans

It is essential to explore all of your options before deciding which insurance to purchase. Today’s life insurance market offers a wide range of solutions at multiple price points, allowing you to customize coverage to meet your unique needs. While it’s important to buy an insurance plan that meets your requirements, it’s also important that it fits your budget.

Compare several plans to identify which one offers the most coverage for the amount of premium you pay. Before considering plan pricing, evaluate the benefits of the plan. Look at your pay term based on your projected income for the coming years. It’s a good idea to start with a low-cost insurance policy to make sure you’re fully covered at an affordable premium. Over time, you can review your plan and adjust your coverage as your income, family size and needs change.

Carefully review the complaints procedure

One of the main purposes of buying insurance is to receive immediate financial assistance in the event of an accident. In an emergency, the last thing you want to do is go through a complicated procedure to recover your losses. It is therefore crucial that you choose a policy that offers a quick and easy claims process.

Before purchasing a policy, review all documents, such as the policy brochure or prospectus. It is essential to understand what the policy covers and what it does not cover. Make sure you understand the terms and conditions of a claim settlement.

Understanding the Terms and Conditions

It is essential to understand all the terms and conditions in order to optimize the money you spend on your insurance and to avoid any legal problems when filing a claim. You should carefully review the terms and conditions and determine if they are favorable and meet your requirements.

Find out important information such as the blocking period and the circumstances under which the request will be rejected.

Is the collective coverage sufficient?

Some people do not buy insurance because they are covered by their employer’s group plan, which benefits their immediate family members. While group term insurance coverage is a valuable benefit, it’s usually not enough.

Depending on your job, your coverage is for a limited amount and may not meet all of your prerequisites. Thus, subscribing to an individual plan will be the most effective alternative to eliminate any risk.

Things your agent won’t tell you

Taking out a life insurance policy is a long-term commitment. Be sure of what you are doing. Don’t blindly trust your insurance agent because there are many things they won’t tell you.

For example, your theft claim will be rejected if the house has been unoccupied for more than 30 days in a row or if your housekeeper was involved in the burglary. Or that your policy will not fully cover you if the first 5% of the sum insured or INR 10,000 of each claim is not paid by the company. It is therefore important to ask questions, do your research and take advantage of information on the Internet.


Buying an insurance policy is not as difficult as it seems. Following the tips outlined above can help you tremendously in choosing the best plan for you. However, these are just a few suggestions for getting the most out of your money once you achieve financial stability.

Remember to keep your long-term goals and the level of risk you’re willing to take in mind when evaluating any of these options. By keeping these two simple fundamentals in mind, you are sure to discover your path to financial success and happiness.