Life Insurance - Life Insurance Quotes and Buying Guide
One of the most important parts of financial planning is a well-planned life insurance plan. It is often advised for youngsters to get themselves a life insurance policy as soon as they start earning. It is indeed important for everyone to insure themselves and their families against eventualities and ensure a secure future. Before diving into life insurance quotes, let us begin by understanding life insurance as an instrument.
What is life insurance?
A life insurance policy is a contract between a policyholder (insured) and an insurer. Under this contract, the insurer is bound to pay the insured a pre-decided and mutually agreed upon amount when the insured passes away. The condition for the insured is that they have to pay all premiums without fail. Premiums are regular payments that the insured makes to the insurer to keep the policy in force.
Usually, the death benefit is paid to the nominee or legal heir of the insured. Some insurance plans also provide a survival benefit, in case the insured outlives the policy term. Life insurance plans come with various features and benefits these days, providing ample choice to the policyholders.
The process of selecting a suitable life insurance plan usually involves going through quotes from multiple insurers.
What are life insurance quotes?
Life insurance quotes give you a comprehensive idea of what you are signing up for. These include premium you would have to pay for a certain sum assured. The premium helps you compare and pick the right policy for yourself. However, most importantly, they tell you how much your policy is going to cost you.
Where to get offline life insurance quotes?
Although the online medium is becoming very popular, some people still prefer to buy policies offline. If you wish to follow the offline route, you can approach a trusted insurance agent or a life insurance consultant associated with different insurers and ask them to help you generate a quote as per your requirement. You have the advantage of discussing the quote with them and making the right choice for yourself.
Especially if you are a first time policyholder, an in-person conversation can help you understand better how to go about your application process. Note that one agent or life insurance consultant can work only for one life insurance provider.
Where to get online life insurance quotes?
There are scores of aggregator sites online where you can find quotes from multiple insurers and compare them easily. The process of obtaining quotes and comparing them is quick and easy. All you need to do is enter some basic details such as your name, age, annual income, smoking habits, etc., and you will get a list of plans that suit your needs. You can compare these quotes and decide what works best for you. You also have the choice to visit multiple sites and get quotes to have a better idea. For a quick look, you can also visit your selected insurer’s website and use the life insurance premium calculator to know the premium estimate.
What are the factors that decide the price of your life insurance plan?
Here are the key factors that determine the price of your life insurance cover, and will help you compare plans.
• The sum assured
As a rule of thumb, your life insurance cover can be up to 25 times of your annual income. This can give you a rough estimate. For a comprehensive idea, you need to also consider the number of family members, your life goals, current income, the amount of time for which your family will need financial support and the minimum financial protection required for them.
The tenure of your plan should depend upon two things - how long would your family need support in your absence, and how long can you continue to pay premiums. It is advised to stay insured for all your earning years to ensure maximum financial security. A life insurance premium calculator can help you determine your tenure better.
• Age and gender
Age is a very important factor. It is always advised to buy life insurance early on as premiums increase with age. You can receive the same coverage at a lower cost than someone who buys it at a later age. Some insurers also offer discounts to women. Use the life insurance premium calculator from the insurer of your choice to determine the rates for your age.
• Medical history
Having a health condition can increase your premium rates. If you smoke or drink regularly, your chances of a cheaper premium are also less as these habits come with severe health risks.
If you have a regular 9-to-5 desk job, it will not affect your premium a lot. However, if you are involved in a profession that involves health risks and hazards, or if you are, say, an adventure sports enthusiast, your premium amount might go up.
Once you take note of all contributing factors and evaluate quotes, you can make a truly informed decision about which life insurance policy you should buy. It is a detailed and crucial process, so make sure you take your time with it and select only what is best for you and your family.
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