5 Questions You Must Seek Answers for Before Buying Life Insurance Policies

"In case you cannot be there to catch them, ensure that you leave a safety net, at least."- Anonymous. Financial planning is one of the most imperative and basic responsibility for every breadwinner. Remember, sudden death of the breadwinner can bring about financial turbulence in the otherwise financially stable family. Therefore, it is important for breadwinners to ensure that their financial plans do not run into rough weathers, even when they are not around.

Read more
Get ₹1 Cr. Life Cover at just ₹449/month*
No medical checkup required
Save more with upto 10% discount
Covers COVID-19
Tax Benefit
Upto Rs. 46800
Life Cover Till Age
99 Years
8 Lakh+
Happy Customers
*Tax benefit is subject to changes in tax laws. *Standard T&C Apply
** Discount is offered by the insurance company as approved by IRDAI for the product under File & Use guidelines
Get ₹1 Cr. Life Cover at just ₹449/month*
No medical checkup required
Save more with upto 10% discount
Covers COVID-19
+91
View plans
Please wait. We Are Processing..
Get Updates on WhatsApp
By clicking on "View plans" you agree to our Privacy Policy and Terms of use
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

This is where life insurance comes to their rescue. Life insurance plans ensure an iron-clad financial protection for the family, in the absence of the breadwinner of the family.

But there are a thousand life insurance products available in the market that can easily dumbfound even the most experienced of investors. We are sure you will agree when we say that a lot of questions cross ones’ mind pick the best life insurance products to ensure financial security for their loved ones.  In this article, we will focus on 5 such confusing questions and provide you with their best possible answers.

So let’s get started! Shall we?

Q1: I have prepared a financial plan that concentrates on building of a huge corpus through savings. Is there any need of financial protection after this?

A1: It is great that you have designed a financial plan focused on creating a huge corpus. However, is neither savings nor protection and you will need both to ensure a financially secure life for your loved ones. Your first step should be buying sufficient financial protection. This will make sure that your financial plan stays in effect even when you aren’t around. It is a long-term financial goal to build a corpus. And a protection plan will make sure that pre-determined financial goal is achieved, irrespective of the fact that you aren’t around.

Q2: What returns will I get at the end of my policy tenure?

A2: It really depends upon the life insurance product you are investing in. For example, term insurance plan purely cater to your financial security and are designed in a way that your dependents are provided with a lump-sum amount in case of your demise, during the policy tenure. The premiums for term plans are pretty affordable. On the contrary, endowment plans provide both death and maturity benefits. However, the premiums for endowment plans are little higher as against term insurance plans.

Q3: What is the cost of term insurance? How it differs from endowment plans that offer returns at maturity?

A3: The cost of term insurance plan usually depends upon the plan that you are buying. Usually, you can buy a term insurance cover of Rs. 1 crore with a premium amount ranging between Rs. 6000 and Rs. 8,000, annually. On the other hands, the cost of endowment plans is a little higher. Usually, you can buy Rs.1 Crore endowment cover for an annual premium of Rs. 1,00,000 for policy term of 30 years. Here it is important to remember in endowment policies , you get the sum assured upon maturity, whereas in term plans no maturity benefit is paid out.

Q4: How much insurance do I need?

A4: Well, it's a tricky question, but an important one that you must carefully consider when buying life insurance. Remember, the primary objective of life insurance is to ensure financial stability for your family, when you are not around. The amount of coverage should be enough to settle all dues and generate an income to help your family live a decent life. Here’s the formula to calculate life insurance cover:

{% of monthly income (you wish to cover) – monthly savings X 12 X number of years (your dependents will need financial assistance)}

Let’s understand this with an example. Let’s assume:

  • Your monthly income = Rs. 60000
  • % cover for monthly salary = 80%.
  • Monthly savings = Rs.18000
  • Estimated years of financial support for dependents = 15 years

[80% of monthly income (60000) = Rs.48000]

[48000-18000X12X15= 5400000]

So you will need Rs.5400000 as your life insurance cover.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Q5: Will there be any changes for the need of my life cover?

A5: Ideally, it is advised that you keep a sharp vigil on your life cover and you must revisit when you monitor amplification in expenses, income and responsibilities. As a rule of thumb, every individual who has attained an age 40 needs an insurance cover equivalent to 20-30 times the yearly income and any person who has attained an age of 50 will need a cover about 5-10 times the yearly income.

Over to You!

Remember, life insurance is an absolute must for every household. And we are sure armed with the answer for these 5 confusing and somewhat dumbfounding questions; you can make your decision-making process simpler and pick the best life insurance for you and your loved ones.

Types of Term Plans

Life insurance articles

Recent Articles
Popular Articles
Post Office Gram Suraksha Scheme Calculator

27 Jun 2022

A Post Office Gram Suraksha Scheme calculator is a useful online...
Read more
What happens if you stop paying life insurance premiums?

03 Jun 2022

Buying the best life insurance plan is a wise and learned...
Read more
Postal life Insurance Tax Benefits

26 May 2022

Postal Life Insurance is the oldest life insurer in the country...
Read more
How to Download PLI Statement Online?

24 May 2022

PLI or Postal Life Insurance was an initiative originally...
Read more
Is Life Insurance an Investment?

24 May 2022

The thumb rule to building wealth is to invest your money in...
Read more
How to Check LIC Policy Status, Details, Statement via Online/SMS/Call
Last year, Mr. Rajiv Verma bought a Child LIC policy to provide financial security for his kid's future. However...
Read more
How to Cancel SBI Life Insurance Policy?
As per the Insurance Regulatory and Development Authority, you can cancel a life insurance policy taken within 15...
Read more
SBI Life Insurance 50,000 per year Plan for 5 Years
Life insurance is not only about the financial protection of the family but also about working for life’s...
Read more
PLI Santosh Maturity Calculator
Maturity calculators have proven to be one of the simple tools for digital-savvy insurance buyers. Postal Life...
Read more
Surrender Value in Insurance
Have you bought a life insurance policy which is not as per your requirement? Are you planning to terminate the...
Read more
top
View Plans
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL