Why is it crucial to evaluate your liabilities while choosing Life Cover? (2024)

Buying life insurance is an important investment decision you will make in your lifetime. It is one of the most essential steps taken to secure the financial wellbeing of your family if you want them to live comfortably even after you are not around.

In any case, settling with the cheapest insurance is not the best solution. You can save a few dimes right now. But when your family actually needs financial support, this low-cost insurance will not provide the cover you had anticipated.

Buying a new insurance policy can be tricky if you don’t know where to look. It is essential to understand your requirements and then select a plan that aligns with those requirements. Many insurance companies offer various kinds of life insurance plans. The best way to choose the right policy is by evaluating your needs and understanding their benefits to tweaking your policy to suit your lifestyle.

As humans, we always tend to gravitate towards the cheapest product out there. While it is ok to save money when choosing an insurance plan, it is advisable not to rely solely on the price to make a decision. Use the power of online tools such as insurance premium calculator to evaluate the cost-to-benefit ratio carefully and then make an informed decision.

Consider the following aspects while planning to choose a life cover:

Evaluate your needs first

The most important consideration at the time of buying a life insurance policy is to evaluate your liabilities.

Are you the only earning individual in your family? How many dependents do you have? Are there several sources of income that can help your loved ones meet expenses arising out of your untimely demise?

These questions may seem tough at the face of it, but it is essential to answer these questions to understand the kind of insurance you should buy. You can use the insurance premium calculator online to see what policy features are available to you at a certain premium.

Assess your liabilities

When you are looking for an insurance plan, you must carefully assess all your liabilities to ensure that your cover is adequate to cover all financial obligations. This is an important consideration when calculating the policy premium.

People often overlook their liabilities to keep the cost of premium low. However, imagine paying all your life for a life insurance cover that fails to do its job when your family needs it the most. An inadequate cover defeats the purpose of the protection offered by life insurance.

Tax deduction is yet another aspect you should know about while buying life insurance.

Compare plans online

Almost all the insurers these days equip potential buyers with helpful tools, such as checking TDS Refund status and premium calculators that allow them to make a sound policy investment decision.

One of these vital tools is an insurance calculator that helps you compare policies as per premiums, features, and other such factors. Use the insurance premium calculator to understand how much premium you can afford and what features are being offered to you at that price. Such tools are very useful in assessing your liabilities and choosing a premium that you can comfortably pay throughout the policy term to keep it active.

Choose an affordable policy

Once you have thoroughly evaluated your life insurance requirements, you must check how much the premium will be payable. Make sure you enter the details accurately, such as your age, gender, and lifestyle habits.

All these details have a direct bearing on the cost of your insurance based on which your premium is decided. Don’t be tempted to enter false information to get a lower premium. Any discrepancy in your data will prevent your family from receiving the death benefit if and when the time comes.

Once you have calculated the premium using the insurance premium calculator, you must choose the frequency of premium payments from options ranging from monthly to yearly.

Determine the features of your policy

Take your time to understand the policy features and benefits. Most insurers give their customers a free look-in period that allows them to study the policy’s fine print before they commit to it in the long term.

You must not only see what is included but also read up about the exclusions to know exactly what you are paying for. It is crucial to find out about these things beforehand rather than leaving these questions unanswered, only to get a rude shock later when the insurance becomes due.

Use the insurance premium calculator in conjunction with all these factors to calculate the accurate premium that you can maintain throughout the policy term. Be sure to thoroughly review all your insurance requirements and lifestyle habits when comparing policies online. Once you have assessed the needs, it is crucial to take it into account when you are choosing an insurance product.