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How to Choose the Best Life Insurance Policy?

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We are all aware of the importance of a life insurance policy.
However with the numerous life insurance companies and policies, how do you select the right one suited to your needs? One of the first things you would have to determine is the amount for which the life insurance policy is to be taken.
This is determined by factors such as your age, income, number of dependents, and the like.
One way to calculate the insurance amount is to multiply your total annual income by six-this is the face value for which the insurance is to be taken.
Another consideration, of course, would be the amount you feel comfortable in setting aside for paying premiums.
Next is the task of choosing the right type of insurance policy.
The different types of policies include * Whole-Life - here, the policy usually runs as long as the policy holder is alive * Term Life - this is for a set duration only * Universal - this policy allows the policy holder to shift money between the insurance and savings components * Endowment - such a policy covers the risk for a specified period, at the end of which the Sum Assured is paid back to the policy holder along with the entire bonus *Children's policies - these are policies by which parents or guardians can provide for life-insurance of their children from birth *Money-back policies - these provide for periodic payment throughout the term of the policy The names by which these policies are referred to would again differ from company to company.
The choice of the policy would depend upon your needs.
Here, a point to considered is that it is always better to treat a life insurance policy as an insurance policy only and not as an investment, too.
Many of the policies available nowadays showcase them as investments with good returns.
However, unless you are an expert in investment and financial matters, it is better to avoid treating these policies as investments.
It is better to have a separate life insurance policy and separate investments.
While selecting the insurance company, you should compare the ratings of different companies on the internet and select one having higher ratings.
Such companies usually provide better service and process claims faster.
Having chosen a good policy, the next step is to get quotes from different insurance companies.
It is better to get quotes from at least five different companies.
Quotes can be got either online, or over the telephone from the agents or advisors of companies.
Some of them may offer to come to your office or residence to provide you with detailed information.
All doubts regarding the amount of premiums, the duration of the policy, the coverage, and other details should be clarified from the agent.
Now you should get the different quotes and policies evaluated by an independent insurance advisor or investment consultant for a fee.
The services of an independent insurance advisor or investment consultant who deals with a number of companies can be obtained for a reasonable charge for a neutral evaluation of the different policies available.
Having thus decided on a suitable policy, all that remains to be done is to contact the concerned advisor for finalizing the transaction.
At least two dependents should be added as beneficiaries, and a copy each of the policy should be given to them.
By taking the above steps, you can select a policy which is ideally suited to you, among the many available.
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