How to Select the Best Life Insurance Plan

2024-08-02

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There’s an old saying that ‘men build houses and women build homes.’ Women are the primary building block of a family unit, in other words, the builder of society. That’s why they hold immense value for the survival and growth of a family. But, often in their tight schedule of taking care of the family, they miss the opportunity to secure this value.

Women who are employed and add direct financial value to the family should be better off in this equation. But the studies point to a different picture, their participation in life insurance space, which is the basic financial need, is far lower than men.

Why Women Need Life Insurance?

While the reasons are many, the most prominent one is the lack of seriousness of their life cover needs. Just to give a small example, the presence of a mother in the family is as important for the children’s growth as a father.

However, when it comes to the financial value a working mother’s contribution is twofold:

Income adding to the family
Efforts in home management

So, the total human life value (HLV) for a working mom would be:

HLV from Income + HLV from Home Management

A small example could be as given below:

Mother’s Human Life Value from Income

Now, Rs. 50 lakhs is the life insurance need for women who are not earning money from outside employment. If they are, they become even more valuable to the family.

For example, if you are earning Rs. 50,000 a month your human life value would be between Rs. 60 – 90 lakhs without account for your contribution to the family.

Thus, your contribution to your family without earning money from employment is significant. If you are earning money, your presence not only contributes to the life of your family but also the lifestyle and future financial goals.

Mother’s Human Life Value for Home Management

In the mother’s absence many of the household work will need to be replaced, especially childcare. But most of these replacement services will cost money:

As per this example, the mother’s human life value (life insurance need) comes out to be about Rs. 50 lakhs. If we account for you and your wife’s income and contribution in efforts, your total human life value will easily exceed Rs. 1 crore.

Buying the Best Life Insurance Policy in India

Now that you know your life insurance need (human life value) and how important it is for you; you should look for the best term insurance plan for yourself. You can look for the following factors to find the best life insurance plan for yourself and your family:

Online Presence - You want to be able to buy a life insurance plan without having to run around or indulge in a lot of paperwork. The online life insurance plan will make it possible for you to securely submit your documents directly to the insurer. There are additional benefits of online life insurance plans:

Complete your application from anywhere in your own time
Collect all the information without any pressure
Discuss with family and improve your research
Fill the personal information in complete privacy

You should understand that online presence is not a mere website for insurance products. It means the complete purchase process is online, except the medical tests. So, you can plan, estimate cost, choose your benefits and complete your application completely online.

Customer Support Options - When we are talking about the presence of the entire purchase process online, it should also include the support. The insurer should also provide the product details including brochures, benefit illustrations and terms and conditions of the policy online.

In other words, you are looking for complete transparency from the insurer. Still, you will come across information which is difficult to understand and for that customer service should help you. Here’s what you should look for in the customer service section:

Available contact mediums – Call, chat, e-mail
Availability through the day – 24x7 or specific time
Knowledge and empathy of the service agent – did he/she understood your question and whether you are satisfied with their answer

Claim Settlement Ratio - When it’s about life insurance, how can you forget claim settlement experience? Know that the claim settlement is the real moment of truth for your life insurance plan. However, you are not likely to be a part of it, when it happens.

So, the only thing you can do is to make sure you engage with an insurer with clear claim settlement guidelines and processes. The best online life insurance plans have claim guarantee conditions now.

This means if your policy meets these simple conditions, the claim on your policy will be processed within a very short period; i.e. 1 – 5 working days.

The claim settlement ratio on the other hands gives you the real picture of the insurer’s overall performance with claims. Anything above 98% is a good claim settlement record.

Premium Payment Options - Premium payment options are going to be important for you, given the uncertainty that lies with career and family choices. Life insurance contracts are long-term contracts, usually extending more than a couple of decades.

In the standard format, you’d need to pay premiums throughout the policy term. This doesn’t sound logical, especially if you see that in near future you may take a break from your career to raise children and focus on family first.

What you need is a limited premium payment term, for example, paying the premium for a 30 years life insurance plan within just 5 – 10 years. This way your life cover doesn’t lapse if you decide to give earning a break and focus on family.

Added Benefits

Added benefits improve the protection quality of your life insurance plan. Best life insurance plans offer added covers to provide financial assistance in the case of the following:

Death or disability due to an accident
Diagnosis of a life-threatening critical illness such as cancer, heart attack etc.
Waiver of all remaining premiums on the life cover in case of any such claim

We hope this list will help you find the best life insurance policy for yourself and protect your family further. While you are at it, iSelect Smart360 Term Plan is a great option to consider for its flexible benefits and customized plan options that align with all your needs. Remember that while you are doing a lot for your family’s growth, insurance solidifies your presence for them forever.

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We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.