How To Choose Best Life Insurance Policy In India
Close

Buy a Life Insurance Plan in a few clicks

Close

Now you can buy life insurance plan online.

  • Icon for Kotak Preferred e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan provides a high level of protection to your loved ones in your absence.

  • Kotak E-Invest Plan

    Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs.

  • Icon for Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the security of your income continuing thru your life and in your absence throughout your spouse's lifetime!

  • Icon for Kotak Preferred e-Term Plan

    Kotak Health Shield

    Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability.

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Back

How to Choose a Life Insurance Policy

Term Insurance Quote
  • 10th Oct 2019
  • 2,157

How to Choose a Life Insurance Policy

You are no stranger to calls from agents selling different types of life insurance plans. There is no denying the importance of life coverage; however, it is quite common for several people to feel misled when they invest in a life insurance plan.

To ensure that you do not fall into this situation, it is recommended that you understand a few basics. Start with determining your requirement, understanding the type of plan needed, and then decide on the most appropriate policy to suit your needs.

The purpose of life insurance

The most important purpose of a life insurance policy is to provide financial security to your family in your absence. The insurance need depends on your life stage. Therefore, if you do not have dependents or your income does not contribute significantly to the total earnings of your family, you may not need life coverage.

However, if you are the sole earning member and have outstanding debt obligations, it is important to procure adequate coverage. This ensures that your loved ones are not left in financial difficulties in case of any untoward incident.

How much coverage is needed?

There is no standard formula to calculate the amount of life insurance coverage. Some of the factors that you need to consider to determine the sum assured include your total earnings, number of dependents, outstanding loans, and current lifestyle.

A general assumption is that you must avail of at least five to 10 times your annual income as life insurance coverage. However, it is recommended you consult an experienced financial advisor to determine the coverage you need to ensure the financial stability of your family in case of an untoward incident.

Types of life policies

There are several types of life insurance policies such as whole life, money back plans, term plan, and Unit-linked insurance plans (ULIPs). Each of these policies has unique features and pros and cons. Traditional plans like whole life and money back policies have higher premiums, as these provide maturity, as well as, death benefits. Term plans are pure risk covers and provide higher coverage at an affordable premium. ULIPs combine insurance and investment to provide life cover along with returns.

It is recommended that you consider your personal requirements to decide on how to choose a life insurance policy.

Life insurance costs

Every life insurance plan has certain costs such as mortality fees and administrative charges. Additionally, insurance companies may pay commissions to their agents, which further increase the costs.

Mortality fees are levied by the insurers to provide life cover during the policy duration and a portion of the total premium is used towards these. Additionally, insurance plans like ULIPs combine insurance coverage and investment returns. Such policies have investment fees in addition to the mortality fees and administrative charges.

The premium on your insurance policy depends on several other factors. These include the sum assured, your age, existing medical conditions if any, and many more. Additionally, if you include riders like critical illness or accidental death benefits, the premium further increases.

One way to reduce the cost of your life insurance plan is to buy online. The commissions and administrative costs decrease when you buy an online policy. These cost savings are passed to you through lower premiums.

To choose the best insurance policy, it is recommended you take time to understand all about life insurance and different inclusions and exclusions, and all terms and conditions. Using the Internet for doing a detailed analysis and comparison will be beneficial.

Calculate Your Term Insurance Premium

- A Consumer Education Initiative series by Kotak Life

Also read

    • 26th Nov 2021
    • 702

    Why Do Life Insurance Agents Avoid Selling Term Plans?

    While term plans are considered the best and most important form of insurance plans by experts, it also offers low commissions to insurance agents. Re...

    Read more
  • 5 Things to Consider Before You Buy Life Insurance

    Buying online life insurance? Here are top 5 things that you should consider before you buy a life insurance. Read more at Kotak Life Insurance

    Read more
    • 20th Oct 2021
    • 547

    Top 5 Common Life Insurance Myths and Facts

    Read this article to bust the most common myths about life insurance. Life insurance is advisable for every single person as it has many benefits with...

    Read more