HomeLocal newsTop 9 Tips for Choosing and Buying the Right Life Insurance Policy

Top 9 Tips for Choosing and Buying the Right Life Insurance Policy

Life is akin to a box of biscuits and chocolates. However, buying and choosing a life insurance policy is more like ordering a cappuccino at Starbucks. Numerous options make it difficult to know what to choose and buy.

As a matter of fact, the confusion over what type and how much life insurance to get is among the main reasons most people give for not getting one.

But according to experts at Gibraltar BSN, Covid-19 became a wake-up call, especially for most Malaysians, with nearly two in five people reporting that they are likely to purchase coverage thanks to the global pandemic.

If you are thinking of choosing and purchasing life insurance, but you have no idea where to start, the following are tips that can help:

1.      Know Why You Require the Insurance

Like most people, you will need this insurance at some point in your life. However, don’t get a policy because you heard somewhere that it’s good. This insurance is made to offer your family financial security should you, your parent, or your spouse dies.

Life insurance may help pay off your mortgage, fund your retirement, deal with estate planning, and clear college fees. If your family completely depends on what you earn for support, you need to consider getting the right life insurance policy.

Plus, the younger an individual is, the less costly the policy will be, even when they don’t have immediate needs for buying a ‘starter’ life insurance for the future.

2.      Assess Your Financial Situation

One of the first steps when choosing life insurance is to look at your financial status. Having an idea of what your financial status looks like will help a lot in determining the type of insurance policy you should get.

In order to do this, you will have to think of your financial status as well as what you have in place to support your beneficiaries. This may include your retirement fund, emergency fund, and life insurance coverage you could be having at work.

You need to as well consider your financial responsibilities and how you sustain them. For instance, you could be your family’s breadwinners and be paying for your kids’ education and household expenses.

3.      Consider Your Health

Many life insurance policies will need either physical exams or to answer a few medical questions so as to determine your health and state. It goes without saying the healthier you are, the less costly your insurance is going to be.

Smoking is a negative and great aspect when pricing life insurance cover Malaysia. If nicotine is one of the items you listed, the cost will be higher.

Plus, remember, life insurance firms correlate your health with age. So the younger an individual is, the healthier they are expected to be.

4.      Determine the Coverage Amount You Need

How much a policy you require might be hard, but it is an important question you need to answer. The industry’s benchmark is around ten times your income. Though this may vary based on your personal situation.

Consider also other outstanding debts, like your mortgage. You may want to include the amount to your life insurance coverage too.

5.      Name the Beneficiary

Your beneficiary for life insurance is an entity or individual who can get the proceeds of your policy. When picking a beneficiary, don’t name your estate or a minor.

If the life insurance is to benefit your company, you might want to have a plan put in place for how your proceeds needs to be used. You can explore your options for naming a beneficiary by talking with an independent agent.

6.      Look at the Claim Settlement Ratio of Insurers

Basically, the ratio describes the percentage of claims that have been paid successfully by insurers compared to the number of claims received. This helps reveal the capacity and intent of insurance providers to fulfill their promise of giving financial help.

From a policyholder’s point of view, it will be important to check the claim settlement ratio of insurance. This will give you an idea of how to choose and buy life insurance by checking the claim settlement ratio of the provider.

7.      Assess the Products Provided

Whole and term life insurance are two major types of insurance insurers provide. Most insurers carry both kinds of insurance, while some can just focus on either term or whole life insurance.

Many individuals opt for term life insurance. This is because it is not just straightforward. It also comes at a relatively low cost. But whole life insurance can as well be something you need to consider.

8.      Enlighten Yourself

Several life insurance policies can be suitable for you based on your stage of life. Enlighten yourself on what is available out there.

For example, minors may get a Youth Life Protector policy that ensures their right to buy additional insurance.

Some individuals also get life insurance coverage through their employers. However, this kind of insurance ends when you are not employed any more. And it often doesn’t apply when you retire.

9.      Enlist the Services of an Expert

Good life insurance agents are people from who you may get impartial and honest advice. So they are not just someone who does whatever they can to make sales.

But not every agent is created the same. When choosing an agent to buy life insurance cover Malaysia from, ensure you look at the expert’s reputation and background.

Inquire if the agent has worked with other life insurance agents like you before. Determine also what type of experience they had in dealing with the same situations.

Life insurance coverage is vital for your family when you die. However, there is more to choosing life insurance coverage than just the cost. You need to ask your agent to recommend you a policy, which can protect your loved ones well.

The Bottom Line!

Choosing and buying life insurance for your family’s needs are important steps you shouldn’t take lightly. As you’ve seen, a few aspects must be considered when choosing a policy. This may include the coverage amount you need, your financial situation, and your health, to name a few.

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