Hi guys, welcome to Siya Vibes.
My name is Siya Today, we will discuss which type of life insurance policy should we take and why While, taking a life insurance policy, one should keep in mind total cover needed, insurance terms claim settlement ratio in terms of numbers and amount, and the riders Along with these, people often make other mistakes So, do not repeat those mistakes First thing, no other policy is needed you can take the term insurance policy only Because it is the real purpose of insurance But, people get confused, why not to take other So, I’ll explain you in brief the other policies and why should we take term insurance There are three types of life insurance policies the term plan, endowment policy and ULIP Let’s take Ram’s example. In term plan he has to pay a premium of 2-3 thousand per month for which, he can ensure a sum of up to 1 crore if he is healthy and non-alcoholic for term of 25-30 years If, during this term, something happens to Ram then his family will get that 1 crore cover but after the term is over, the policy will lapse In endowment policy, Ram has to pay 1 lakh annually for next 20 years that is, 20 lakhs, on which he will get 6-7% of interest, which will make near about 35 to 40 lakhs So, he is investing 1 lakh annually and still is not able to get a cover of 1 crore The third type of policy is ULIP Unit Linked Insurance Plan, which is like a combination of insurance and investment I would again say to choose term insurance rather than this ULIP is also invested like mutual funds in market and can have same returns But, there is a market risk. Secondly, there are many charges in ULIP Secondly, this is only for earning members In India, under-insurance and over-insurance are very common In India, most of the insurance policies are bought through agents or brokers If a person is not comfortable in documentation in that case, it is fine You can save a lot of money by online policy by saving the agent’s commission amount and the premium would be even lesser Do not fill your incorrect medical information I would suggest you to take tests and then fill in the information because companies try to find reasons to reject your claim and could do so You have to pay less premium at a younger age and the premium amount might increase with time You don’t know when the policy might be required so you can take an insurance policy as soon as you start earning Take care of paying the premium amount in time or else the policy might lapse You can use an auto debit system or the agent could remind you You should have the documents within 15 days from the insurance company because it is your free lock-in period, in which you decide if you want to go with that policy or not, after reviewing all the documents Some agents try that you don’t get the documents in time, but, you should ensure to have them in order to take an informed decision Initially, we had done a calculation for cover that should be done after every, 2-3 years because your expenses could increase or decrease your needs could change so you need to be flexible to change your cover amount First, you yourself should be doing this calculations Secondly, know how you can change your cover amount according to your needs Keep in mind this thing, because we do not plan finances only once. We continuously need to manage our finances and according to that we change our plannings for our finances The most important thing, do not forget to tell your family how to claim the policy