Life Insurance Policy

Why you should never judge a Life Insurance Policy by its low premiums?

If you are looking to buy a life insurance policy, chances are that you would want to buy the cheapest one. After all, buying life insurance does not help you when you are alive. So why spend so much on it?

Introduction

one should never approach purchase of life insurance with that mindset. Real purpose of a life insurance is neither an investment nor tax-saving. It is simply a financial instrument that takes care of the financial needs of your dependents when you are not there. So if you buy an inadequate coverage just because of low premiums, remember that it will be your family that will suffer in your absence. They will not have sufficient income for regular expenses. And God forbid, if you have a loan, then lenders will come after your family for repayment. That can be a scary scenario.

Financial Instrument

Having said this, there are 2 more factors apart from premiums, which you should consider while buying life insurance policies.

First is to look at the Claim Settlement Record of the insurance companies. Always ensure that you purchase insurance from a company that has a high claim-settlement ratio, at least above 95%. This will ensure that chances of your family getting the claims are high.

Next important factor to consider is the Claim Pending Ratio. This is important because it gives an idea of the time taken by the insurer to settle legitimate claims. A high claim pending ratio usually points towards company's inefficiency in processing claims and more importantly, potential for causing trouble to your family, which might have to run after company officials to get the claims acknowledged.

Claim Settlement

When you buy Life Insurance Policy , you not only want that your family gets sufficient money but also, that they get it quickly and without any hassles. So make sure that you don’t just look at the insurance premiums when you decide to buy your insurance policies.

Conclusion

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