All of us understand how important having a life insurance
plan is and appreciate its role in securing the financial future of our loved
ones from the various uncertainties of life. However, when it comes to taking
the final step and purchasing a term insurance plan online, we do face some
difficulty. We often end up a bit confused on aspects such as the amount of
life insurance we should buy, what are the various requirements that should be
looked at, which company to buy from, etc. Here are a few quick tips that
should be of help when you are buying an online term plan.
Determining the
coverage you need
There are multiple elements that influence the amount of
life insurance coverage that you would need. Right from the life-stage that you
are in to the responsibilities that you have to shoulder to the liabilities
that you carry, everything matters.
Life-stage and family
members:
We buy life insurance not for ourselves but for our loved
ones so that they have a secure financial future in our absence. Therefore, we
need to consider who all are there in the family that we would like to secure.
The financial responsibilities of a married person would vary from that of
someone who is single. A person having kids would have more financial
responsibility and so would a person whose parents live with him or her.
The income factor:
Whether the family has a sole earning member or there are
other members and sources to contribute to the collective income also has a
bearing on the amount of life insurance one should purchase.
Liabilities:
Individuals often have a range of liabilities which could be
in the form of outstanding loans home loan, car loan, etc.) to higher education
of children, their marriage plans, etc. The higher this amount the greater the
coverage that would be needed.
Determining your
needs and requirements
Having assessed the coverage requirements is one part of the
story. The other crucial part is looking at the different needs and
requirements that you have and finding ways to address those.
Capability of family
members to handle finances:
Term plans often give a lump sum amount of money on the
unfortunate demise of the life insured. However, it's quite possible that the
family members who receive such a lump sum might not be adept at handling
finances and may face difficulty in managing huge funds. Hence, one should look
at alternatives that negate or reduce such a risk.
Steady income support:
Another factor that one should consider while buying an
online term insurance is to try and provide the cushion of a regular income to
take care of their everyday needs. In addition to a lump sum amount, try and
provide for a fixed monthly income for your family.
Maintaining lifestyle:
Rising costs are now an everyday affair. Hence, providing a
shield against inflation becomes imperative. So, while you are evaluating your
options, do try and make sure that your loved ones' needs and aspirations are
taken care of despite increasing costs and expenses.
Choosing the right
Insurer
With multiple companies offering online life insurance
plans, deciding upon which one to opt for can be difficult. Here are a few
things that you should look for when you are zeroing in on an insurer
Claims Settlement
Ratio
Life insurance is, in the ultimate analysis, a business of
paying claims and providing support to the customer's family when they need it
the most. To be true to this their promise to policyholders, life insurers must
have an effective claims settlement process, making it simple, quick and
hassle-free. This is especially important because claimants, who are dealing
with an unplanned incidence such as loss of some loved one, need reassurance
and support, not the pressures of complicated follow-ups.
Strong Financial
Track-Record
It is always a good decision to opt for a firm with a strong
financial track-record. A company with solid financial track record gives you a
sense of stability and security. After all, when choosing a company to secure
your financial future you want to make sure its future is secure as well. You
want it to be rock solid!
Service Standards
Customer service is critical in a business that depends so
much on trust and credibility. Providing service excellence to its customers
should be a key priority for any organization. The life insurer must strive to
be customer centric and establish well laid out processes for customer service.
The life insurer must try and provide a positive experience to the customers at
every touch point and have constant focus on nurturing long-term relationships
with customers.
Market Reputation
The reputation of the Life Insurance Company is an important
factor to consider while taking a decision on which life insurer to go for. The
company that you finally choose must have a good standing in the market and
people should mention it in a positive light. Much of this reputation is
created through products, distribution and customer service and one must research
about these before making a decision. These days, one can also check online
forums and social networks to get an idea of a life insurer's reputation. If a
brand has built its equity over time through positive customer experiences at
all touch points, there will be people who will be saying positive things about
that brand.
Corporate Governance
Corporate governance refers to the structures and processes
for the direction and control of companies. Corporate governance concerns the
relationships among the management, Board of Directors, controlling
shareholders, minority shareholders and other stakeholders. Good corporate
governance helps companies operate more efficiently, improve access to capital,
mitigate risk and safeguard against mismanagement. It makes companies more accountable
and transparent to investors and gives them the tools to respond to legitimate
stakeholder concerns such as sustainable, environmental and social development.
