Life Insurance - Which Policy To Buy?
With the number of life insurance products in India increasing at a fast rate
, no doubt the industry is mushrooming. Life insurance requirements differ as per personal situation and way of living. If you have dependents, you will probably want to buy a large insurance policy to receive bigger coverage. Since your income plays an important role in supporting your family and managing your financial commitments like mortgage payments, education of children and other recurring bills, a life insurance policy ensures that your family is not hard pressed by such financial responsibilities in case of an event of your sudden demise.How much to buy?
The amount of insurance that you want to buy depends on various factors like your income, nature of spending, bills to be paid, coverage required, dependents and their lifestyle, debts and your overall lifestyle. Generally, it is a smart choice if you buy a life insurance policy that offers a coverage amount that is 5 to 10 times of your annual salary.
Which policy to buy?
Along with term and whole life insurance policies, there are many kinds of life insurance products available in the Indian insurance industry. Private players come up with their customized life insurance policies to suit different needs of the Indians. To suit the various kinds of policies, different covers are available. Finding the right kind of life insurance policy with the right coverage amount to suit your life needs, require a great deal of understanding and commitment.
Whole life insurance- under this policy, the premium stays the same till the policy period ends. The premiums stay effective until the death of the policy holder.
Term life insurance- under this policy, the policy period is decided for specific number of years ranging from 10 years to 35 years. This gives the policy holder enough flexibility to buy life insurance as per personal life requirements.
Variable life insurance- under this policy, a cash reserve is built that can be invested in any insurance products that are offered by the company. This life policy is suitable for risk oriented individuals.
Universal life insurance- under this policy, the premium amount can be varied by utilizing a part of accrued earnings to cover a small part of the cost of premiums. The death benefit amount can also be varied.
As you are a breadwinner in the family, there will be higher responsibilities on your shoulders. When you have a life insurance policy on your name, it financially supports your family, if you expire in an uncertain event.
While you buy a life insurance policy, the first thing that you would want to know is about premiums. Your ability to pay the premiums depends on your income. Even the insurance companies check your income before approving any life insurance policy.
Evaluating different life insurance plans on the basis of the salary is a priority for both, the insurance policy buyer and the insurance companies. Once you find out all different kinds of life insurance plans and do a background check on them, you decide to buy the one that suits your life needs.
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