There are so many different types of policies available in the market today that investors are often left wondering as to what purpose they all serve.
First and foremost, choosing an insurance policy must be based on your current and projected income, or simply put your current and projected ability to pay the insurance premiums, your medical state, your age, future financial plans, etc.
Second:
Cost-benefit ratioThe cost of the insurance cover depends upon many reasons, some mentioned above and other factors depending on what is covered in the cover or its riders. Thus, you have to keep a close eye on the cost of buying insurance and ensure that it justifies the benefits covered under the policy. Simply put, a right balance must be struck between the cost and benefits available.
CoverYou need to ensure that the insurance covers all your dependents and that it also covers the majority of health problems.
Thirdly, the promises made by different insurance companies are all fine. However, it depends on you whether you need a pure insurance cover or you need an insurance cover coupled with an investment opportunity. The four major kinds of insurances that most people opt from are:
Term insurance: Term life insurance or term assurance is life insurance which provides coverage for a limited period of time.
Endowment policy: An endowment policy is a life insurance contract designed to pay a lump sum after a specified term (on its maturity) or on death, whichever is earlier.
ULIPs: Unit-linked insurance plan (ULIP) provides for life insurance, where the policy value at any time varies according to the value of the underlying assets at the time.
Money-back policy: Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, money-back policies provide for periodic payments of partial survival benefits during the term of the policy.
First and foremost, choosing an insurance policy must be based on your current and projected income, or simply put your current and projected ability to pay the insurance premiums, your medical state, your age, future financial plans, etc.
Second:
Cost-benefit ratioThe cost of the insurance cover depends upon many reasons, some mentioned above and other factors depending on what is covered in the cover or its riders. Thus, you have to keep a close eye on the cost of buying insurance and ensure that it justifies the benefits covered under the policy. Simply put, a right balance must be struck between the cost and benefits available.
CoverYou need to ensure that the insurance covers all your dependents and that it also covers the majority of health problems.
Thirdly, the promises made by different insurance companies are all fine. However, it depends on you whether you need a pure insurance cover or you need an insurance cover coupled with an investment opportunity. The four major kinds of insurances that most people opt from are:
Term insurance: Term life insurance or term assurance is life insurance which provides coverage for a limited period of time.
Endowment policy: An endowment policy is a life insurance contract designed to pay a lump sum after a specified term (on its maturity) or on death, whichever is earlier.
ULIPs: Unit-linked insurance plan (ULIP) provides for life insurance, where the policy value at any time varies according to the value of the underlying assets at the time.
Money-back policy: Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, money-back policies provide for periodic payments of partial survival benefits during the term of the policy.
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