Life Insurance

Things You Need to Know Before Buying an Insurance Policy

The choice to purchase a life insurance policy to protect one’s financial dreams and aspirations is a wise decision. It is also important to purchase insurance according to financial needs. Buying an insurance policy is not easy as one cannot understand all insurance products available in the market. As a buyer of life insurance, you have the right to understand the financial aspects for which a solution is proposed to you.

IRDA has made it compulsory for insurance companies to provide an illustration at the time of the sale. Please ask your agent to explain the illustration and understand the various benefits available under the plan you are purchasing. You are entitled to see and understand the sales literature approved by IRDA containing UIN (Unique Identification Number). You are requested to insist on sales literature and read the same while purchasing a life insurance policy.

Life Insurance contract is a contract of utmost good faith, wherein it is your duty to inform the insurer of any medical or financial facts. Please read the proposal form after it has been completed and confirm that all answers are correct and that there is no false information in the proposal form. This is important as the claims will be payable only when utmost good faith is exercised while purchasing life insurance and there is no fraudulent intent in answering questions in the proposal form.

Once you receive the policy document, you need to read the same and ensure that the policy document matches the cover sold to you. The following terms in the policy will help your understand your policy document better.

In case you find that the general terms and conditions of the policy document does not match with the cover sold to you, you have the option of returning the policy document to your life insurance company stating the reason within 15 days from the date of receipt of the policy document. On receipt of your letter stating the reason for cancellation along with your policy document, the company shall arrange for return of the premium paid by you after deducting charges as provided in IRDA regulations for protection of policyholder’s interest.

Free Look in Period

It is critical that you check all the information provided by you is correct in your policy document. This includes your name, age, address, date of birth, etc. If you find any error, you need to inform your agent or customer service department of the insurance company immediately.

Personal Details

A nominee is the person designated by the policyholder to receive the proceeds of an insurance policy, upon the death of the insured i.e. policyholder during the term of the policy. You can change the nominee during the policy term, and if you decide to do so, please inform the insurance company’s customer service department. There is a process for change of nomination and you will be guided by the company to make a valid change of nomination.

Nominee

During the policy term, if there’s change in your address, telephone number or email address, you should inform your life insurer so that it’s updated to make sure you do not face any hurdles during the claim. Documentary evidence of the new address may be required for compliance with AML guidelines.

Change in address/ contact details

If you have invested in unit-linked life insurance policy (ULIP), you can track the performance of your funds. Every insurance company publishes unit prices on daily basis on their websites and periodically in business dailies. If you have invested in a traditional/ conventional life insurance policy, you can check if the policy comes ‘with profit’. If yes, you can ask your agent to educate you on the yearly bonus declaration.

Fund Performance/ Bonus

Grace period refers to the time period provided by life insurance companies to pay your premiums if you fail to pay your premium on a specified premium due date. Grace period may range from 15 to 30 days from the due date. Please refer to the policy document for the days of grace allowed under the plan purchased by you.

Grace period

Your policy would mature at the end of the policy term you have chosen and on your chosen retirement (vesting) date. You can redeem your fund value along with sum assured, and other benefits as defined in your policy document. In case of unfortunate demise of the policyholder, the family members of the policyholder should contact the life insurer with the original policy document, claimant's photo identity and address proof, copy of death certificate by local authority. The sum assured and other benefits are paid to the nominee mentioned in the policy document. It is important to keep the policy document safe.

Maturity and Claims

The life insurance cover that you bought is very valuable for you and your family. If the cover is lost by non fulfilment of the policy conditions, then you may not be able to purchase a new cover at the same rates or you may not be eligible for insurance because of your health conditions. It is important to understand the terms and conditions of the cover and maintain the life cover to safeguard yourself and your family.

Source : http://blog.hdfclife.com/things-you-need-to-know-before-buying-life-insurance-policy-532300

To know more visit: https://www.bajajallianz.com/Corp/life-insurance/life-insurance-calculator.jsp

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