How Does Life Insurance Work ?

4 months ago 179

While purchasing any type of life insurance, it's important for you to understand how it works and how your nominee can receive the benefits of your policy. Better understanding will help you on deciding on frequency of payment, payout plan and sum assured.

1. Buying life insurance

When buying a life insurance, it's important to consider the following factors:

Life coverage you need
Type of life insurance that will meet your financial needs
Premiums that you will pay. For example term insurance calculator can help you with calculating the premiums to buy term insurance
Add-on riders that will help you get a comprehensive financial cover
Differences between various life insurance quotes for each possible policy

2. Payment of Premium

The premiums of a life insurance is dependent on a few factors, such as type of life insurance you purchase, term of the policy, premium paying term, your age, your gender, the insurance company selling the policy, and your overall health, wellness, and family history.

To calculate premiums for term insurance plan you can use term insurance calculator
To calculate premiums for ULIP you can use ULIP calculator
To calculate premiums for savings plan you can use savings calculator
To calculate premiums for investment plans you can use investment calculator

3. Claims

As far as the claim is concerned, if the insured passes away during the policy's tenure, a death benefit is paid to the insured's designated nominee in an amount predetermined by the insurer. Making a claim for this is a fairly easy process. A claim can be submitted online, through text message, email, phone at the insurer's call centre, or in person at a branch office. In order to expedite the claim processing, it is best to notify the insurer as soon as the required paperwork is prepared. Do research on the insurer's claim settlement ratio prior to buying a life insurance policy. This indicates the possibility that your claim will be resolved.