Looking to buy life insurance policy cover, there are a few critical variables that might help you narrow down the best choice.
Here is a list of factors you should look for while searching for a life insurance policy.
Claim Settlement Ratio
The percentage of claims granted out of the total filed in the year. A higher ratio is better as it means claims settle faster and easier.
Solvency Ratio
It is the financial strength of the insurer and indicates whether the insurer will be able to settle your claim as to and when it arises. Again, a higher ratio is better. But should look at it in combination with the claim settlement ratio.
Maximum Tenure Available
The number of years you can take the plan. It is best to opt for a plan with a higher number of years or at least one which lasts till you reach retirement.
Additional Covers Available
Life is not the only risk, when it comes to the financial security of your family, disability, accident, critical illnesses, etc. can also have a crippling effect on your finances unless you are prepared. The availability of these covers as add-ons to your life policy will make it easier to manage. Including all the risks with one single annual premium.
Life-Stage Increments to Insurance
With age, your family responsibilities increase. A plan which allows you to increase your life cover as your responsibilities increase will be a clear choice if you expect the same.
Premium Cost
Though cost is an important factor, should look at this at the last, once you ascertain all the other benefits are also available. Most of the time, the number of benefits available determines cost, thus, the slightly higher price for everything you need may not be a constraint.
A Case of Selecting a Life Insurance Policy
Sameer, 35 years of age, is married to Shweta and together they look after their two kids. While Sameer is the primary breadwinner of the family Shweta makes sure that every penny he earns is put to good use. With the increase in responsibilities, he had been contemplating increasing his Life Insurance cover to ensure that his family remains financially independent even if he is not there to earn it.
He has been considering multiple options available and has narrowed it down to the three brands, offering similar benefits. Going further he looks at the factors mentioned above, and this is what he has found:
* Annual premium for a sum assured of Rs. 1 Crore for 35 yr. old male.
On the all-factor comparison Brand 2 comes out to be an all-out winner for the following three reasons:
- Best Claim Settlement Ratio
- Better Solvency Ratio Despite Good Claim Settlement
- Most Number of Critical Illnesses covered
Although Brand 2 charged the premium product higher than the two other brands, the benefits far outweigh the additional cost. After accounting for the unwanted feature of Life-stage increment, which does not require by Sameer.
About The Author
Varun
MBA Finance
Varun has established itself as a knowledgeable and reliable expert in the field with 8 years of experience. Specializing in group-term life insurance, they have dedicated their career to helping businesses and individuals navigate the complexities of insurance products and services. Currently writing for SecureNow, he produces insightful blogs and articles that demystify group-term life insurance, offering practical advice, industry updates, and strategic insights. Their deep understanding of the insurance landscape and talent for clear and engaging communication make their content invaluable for both seasoned professionals and newcomers alike.
