How to choose right life insurance plan

With a plethora of life insurance products available in the market, picking out the right insurance policy can be a challenging task. There are a few things that need to be kept in mind before buying a suitable life cover.

Here are a few ways that will help you in making an informed decision.


This is the first thing that the policyholders need to do before choosing a life insurance policy. Planning involves reviewing your current insurance needs. Doing so will help you to get the most suitable life cover to secure yourself and your loved ones.

Evaluate your financial condition

Before you seek a life insurance cover, you must consider your current and future financial situation. A life insurance plan looks like a perfect solution that provides you and your loved one's complete protection. But remember, to avail the benefits of such policies, you will also need to pay a certain premium, the cost of which depends upon the type of policy you have chosen. So, before choosing a life plan, take into consideration your present financial condition so that your current standard of living is not affected.

Consider the number of dependents

You will also need to contemplate on the factor of how many dependents you have and how much financial support they will need in case of your absence. In case something unfortunate happens, then how much money you would be required to manage your children's education, your parents' comfort, and your spouse's well-being.

Check for riders

A rider is an add-on cover to the primary policy, which you can avail by paying extra premium. It includes critical illness, waiver of premium, waiver of premium on critical illness, the extra payout on accidental death, cover against accidental disability and heart and cancer cover. So, one must opt for the best riders to enhance the benefits of the plan as well as to provide more financial security.

Term of the insurance

While comparing multiple life insurance plans, if you come across two different policies providing the same cover at different premium rates, check the duration that they cover and choose one that suits you best. For example, a term life policy which is costing you Rs 6000 annually for a cover of 25 lakhs and is valid for 50 years is better than a policy that is charging you Rs 4000 annually for the same amount of cover but is valid only for the next 20 years.

 Assess the future of your insurance cover

When you buy a life insurance policy, you should take the help of an insurance agent to understand the finer details of the policies like the inclusions and exclusions which your policy contains. Having a clear understanding will help you to make an informed decision and prevent your family from being shocked at the time of filing a claim.

 Know about the claim settlement history of the insurer

Before you choose any insurance company, it is paramount to do thorough background research about their claim settlement history. You can easily get this information online on the insurance company’s website or you can also check the Insurance Regulatory and Development Authority of India (IRDAI) website for related information.

The purpose of life insurance is to help your loved ones in their time of need. Therefore, you should always buy such a policy that fulfills their requirement and is not just offering a better price. You can use the above-mentioned factors as basic guidelines before choosing the right life insurance policy.