The Life Insurance Corporation of India is considered a symbol of trust and security in the country. Millions of people rely on LIC policies to secure their future and ensure financial security for their families. However, many first-time life insurance buyers, due to haste or lack of knowledge, choose a policy that later proves unsuitable for their needs. Therefore, it is crucial to fully understand some important points before investing in any LIC plan.
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Assess your needs and choose the right plan
The choice of any policy should be based on your financial priorities and life goals. If you only need life cover, term insurance is the best option as it provides greater protection at a lower premium. However, if you want the benefits of both investment and insurance, endowment plans, money-back policies, or ULIPs can meet your goals. Different plans are available for children’s education, retirement planning, or loan protection, so investing in a policy without identifying your needs would not be a financially wise decision.
Choose the premium and term wisely
The premium for each policy should be based on your budget and income. Avoid premiums that will be difficult to pay for a long period, as you may face losses if the policy lapses. Furthermore, the policy term should be in line with your age and financial goals. For example, if you are 30 years old and choosing a plan with retirement in mind, a policy with a longer term may provide better returns in the future.
Don’t forget to read the terms and conditions
LIC paperwork is a legal document, and it is your responsibility to read it carefully. Sometimes, people sign the terms without reading them at the behest of an agent, which can lead to confusion and trouble later on. You should clearly understand the coverage amount, premium date, maturity benefit, grace period, policy lapse status, and surrender value. If you have any doubts, seek clarification from the agent or the LIC office.
Strengthen your policy with riders
Additional protection can be added to LIC policies in the form of riders. These include options like accidental death benefit, critical illness rider, and premium waiver rider. These provide significant protection for a small additional amount. Choosing the right rider depends on both your needs and risk level. The right rider not only enhances the policy’s benefits but also ensures financial security in uncertain situations.
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Don’t withhold information and choose a trustworthy agent
Hiding any information related to your health, income, or previous policies when purchasing a policy can lead to claim rejection. It is your responsibility to provide accurate details. Furthermore, a knowledgeable and experienced agent can simplify policy selection. They can recommend the right options for your needs and explain all terms and conditions in simple language.
