Buying life insurance is one of the most important decisions of your life. You must be careful when buying the policy because a secure life insurance plan is an assurance of the financial safety of your family when you are not around. So, when discussing your life insurance policy with your insurance agent, be open and clear all your doubts. Do not hesitate and directly ask all the possible questions or concerns you might have regarding your insurance policy, the company, premiums, etc.
Here are the seven (7) most important questions you should ask your life insurance agent:
1. Is the insurance company credible?
The first question to ask your insurance agent is about the company you are buying the policy from. Ideally, the insurance company you select should be a trusted and reputed organisation. You can ask the insurance agent to share specific details about the company such as its directors, year of establishment, types of business, financial stability, geographical presence and more.
Be sure to check the claim settlement ratio (CSR) of the company. CSR indicates the number of claims settled by the insurer against the total number of claims received. The higher the CSR, the better is the credibility of the company.
If you are buying a guaranteed return insurance plan, check the rate of return offered by the company on your investment. Also, be sure to know the guaranteed additions made by the insurer in the guaranteed return pension plan. The objective is to choose a company that offers a high rate of return on the guaranteed plan along with greater additions.
2. What type of policy are you buying?
There are different types of insurance policies available in the market. Hence, you need to know the policy are you investing in. If you want a pure life cover, you can opt for a term plan. If you want a market-linked investment along with insurance cover, ULIP (Unit Linked Insurance Plan) is your find. If you do not wish to take any risk and want attractive yet secure returns on your investment along with a comprehensive insurance cover, you can buy a guaranteed return plan.
Guaranteed return plans in India offer assured returns on your investment along with a secure life insurance plan. You also get guaranteed additions to your plan from a particular year onwards. When selecting the type of policy, ask your insurance agent about which plan will best suit your lifestyle, financial needs, risk appetite and investment horizon.
You should also be open and ask them about how much cover would be sufficient for your and your family’s needs? How long should the policy tenure be? Answers to these questions will help you select the perfect insurance plan for your needs.
3. What are the benefits of the policy?
Depending on the type of insurance policy you buy, the insurance company will give you benefits. Some benefits are guaranteed while others might be variable. For example, a term insurance plan pays out a defined death benefit but nothing else. A ULIP plan pays a death benefit and maturity amount but the returns of the plan depend on the market condition. Alternatively, guaranteed return pension plans pay out a defined return on investment along with additions from a particular policy year onwards.
In all cases, make sure that your insurance policy specifically mentions the guaranteed benefits and the conditions that pertain to it. This helps you know the exact amount your family will receive in the case of your death during the policy term or the maturity amount you will receive when the insurance policy matures.
4. What are the different types of riders available with the policy?
The primary objective of buying an insurance policy is to safeguard your and your family’s financial future. For this purpose, your ordinary insurance policy might not be sufficient. However, you can enhance your insurance coverage by opting for additional riders.
Some of the riders that insurance companies provide you include critical illness rider, waiver of premiums, income benefit rider, accidental death benefit rider, accidental total and permanent disability rider, payor waiver benefit rider and more. By adding a rider to your insurance plan, you will be able to create a failproof safety net for the future.
5. What are the premiums of the policy?
One of the most critical questions you should ask about your insurance policy is the premium amount. The insurance company charges you a premium as per the type of policy and the sum assured. Hence, you should know your premium amount and if there are any additional charges.
You should also know the premium paying duration and the flexibility to pay premiums – annually, semi-annually, quarterly or monthly. The objective is to know if the premiums fit your budget.
6. What happens if you do not pay the premiums?
Life insurance[PG5] [Bh6] is a long-term commitment where you are required to pay your premiums to keep your policy active and avail of the benefits. Ask your agent regarding your premium due date and pay them on time. Do not forget to ask the agent about what happens if you fail to pay the premiums in time.
Enquire if there is a grace period? Till when will the policy remain active in case of delay in premiums? If there is a revival period? Moreover, ask if you can surrender the policy if you need to.
7. What is the claim process?
You do not want your family to struggle to get the claim amount when you are not around. You want them to get the insurance money without any hassle. So, be sure to ask your insurance agent about the claim settlement process and the time taken by the company to pay out the death claim. Moreover, ask about how they will receive the benefits and if they will get anything apart from the amount promised.
Your insurance policy is your financial security for the future. Be open about your needs and ask all the relevant questions from a certified insurance agent. You must make an informed choice and select a policy that is best for your and your family’s needs.
You can check out guaranteed return insurance plans from Edelweiss Tokio Life Insurance. The Edelweiss GCAP Plan is a safe investment option that gives you assured benefits and a comprehensive life cover along with a wide variety of riders to enhance your coverage. You get the advantage to choose your premium payment mode, sum assured, policy tenure and more. With this guaranteed return investment plan, you get competitive features, highly affordable premiums and a speedy claim settlement process.
Aastha Mestry - Portfolio Manager
An Author and a Full Time Portfolio Manager, Aastha has 6 years of experience working in the Insurance Industry with businesses globally. With a profound interest for travelling, Aastha also loves to blog in her free time.