Nothing can fill in the vacuum that the loss of a loved one creates. But life insurance is one way to ensure that your family gets the necessary financial support in the hours of need. Although it is a promising option to live a liberated and ensured life, buying a policy is highly confusing. With overwhelming options available in the market it becomes difficult to make the decision. When you decide to take a life insurance policy, also make a resolve not to rush through the process. Make sure you get multiple quotes and compare all the options carefully. You can use online tools and portals like the iSelect for comparison to ensure you do not miss out on any aspect. Here is a description of different types of life insurance plans you can find and how to choose the best one.
- Types of life insurance plans
Life insurance is a broad term that covers several types of plans.
- Life cover
It is also known as the term life cover or death cover. The plan pays the entire amount after your demise. Typically you nominate a beneficiary who will get the amount after your death. Such plans keep you covered until you reach a certain age or stop paying the premiums.
- Income protection
This plan is designed to help you when you are unable to work. If you are faced with some serious illness or injury and are not able to work, an income protection plan will pay you to run your monthly expenses.
- Trauma cover
A trauma cover helps in case of critical illness. If you suffer from a serious medical condition and are not able to work, trauma cover provides you stability with your finances. The illnesses cover as trauma and the amount to be paid will be mentioned in the product disclosure statement.
- Total and permanent disability cover
In the case of total or permanent disability, this plan will provide your financial aid to pay your medical and rehab bills and to cover the cost of future living. Remember different insurers would define total and permanent disability differently.
- Finding the best life insurance plan for you
To make sure that you get the maximum benefit from your insurance plan, you need to ensure that you choose the right plan. Here are some tips to make your selection easy.
- Research
You can read about different plans online, compare the expenses and benefits, or consult an advisor. You can also discuss with your family and peers if they have some knowledge in the field to make an informed choice.
- A thorough study of shortlisted plans
Instead of relying on the information discussed with your provider or customer care executive, thoroughly study the product disclosure statement. It contains all the information you need.
- Know the lock-in period
Oftentimes you that the policy is not up to the mark after buying it. Some insurance providers offer you a lock-in period which allows you to return policy and buy another one. The period is short like 15 days or so.