Buying insurance is crucial for you and your family’s well-being. However, you must exercise caution and properly acquaint yourself with the terms of the insurance policy that you wish to buy. Here are four important points that you must keep in mind before you buy an insurance policy:
It’s never about returns
Most people don’t opt for a term plan because if the policyholder does not die in the policy period, then no cover is provided to the family. However, we are missing the big picture here; term plans aren’t about returns, they are about securing your family’s future financially.
Death over Taxes
Buying insurance does indeed give you tax benefits but that isn’t the main advantage. The primary objective of insurance is protection. If you’re the sole breadwinner of your family, then the death benefit that your family would receive in the unfortunate occurrence of your death would help them keep their head above the water for some time. It will help them deal with the finances while they come to terms with your absence. Tax rebates are incentives to include insurance in your portfolio as a part of long-term financial planning.
The right cover
Life insurance is very important if your family depends on you financially. You must think and plan for the future in advance so that in your absence, your family is not affected. It is important to understand how much life cover your family would need. Hence, choosing adequate life cover is imperative. You must keep three things in mind before you decide on your life cover: covering existing debts, covering future expenses like educating your children, and substituting your future income.
Although a financial advisor is of great help when it comes to buying insurance, they are not absolutely necessary. With the country moving towards a digitalized system, insurance can also be bought online. Purchasing insurance online is as safe as it is offline. While buying insurance online, you are provided with around the clock support in case you have any questions or if you run into any snags. Moreover, buying insurance online is usually cheaper than buying it through a financial advisor.