Buying an insurance policy is always a tricky job. In fact, insurance companies keep it that way so that they have enough ammo at their disposal to fool the unsuspecting buyers. Get in touch with a few insurance agents and you will have a first-hand idea of what is being said here.
However, you can keep it safe and simple by getting your homework done on this. That would be the most important thing for you to do to avoid falling into the trap of the agents. Of course, that is not to demean the agents as they work at the behest of the companies, but some tend to make it more complex for you to make things all the more confusing.
What is life insurance, why do you need it?
However, before we proceed on this, it probably will be a good idea to start with the basics. Like, what is life insurance policy in the first place. In answer, we can say life insurance is a contract that you enter with an insurance company wherein you pay a fixed monthly amount for a certain period of time.
In return, the company will pay out a fixed lumpsum amount to your family in the unfortunate event of your passing away. This way, you can ensure your near and dear ones are not left in the lurch or at the mercy of anyone else in the event of your death. That should explain why you need insurance and what is its importance.
How to apply for life insurance
You might have to fill out a lengthy form specifying all details of your health, starting with the age, any disease you might be suffering from, whether you have ever been operated upon, addictions, if any, and such. Some companies might spare you a visit to the doctor as an incentive for you to opt for them against the plethora of competitors out there. In short, the companies would like to have almost everything about your health.
After all of your information thus collected, is then fed to an automated system where an AI-based system tries to put a score against you. The score is in reality a numerical measure of how likely you are to die in the near term, or how long you can be expected to survive. Materialistic that might sound but that’s the way it is, that’s the way it has always been.
If done manually, this process is of immense complexity and could take even up to 90 days in some cases. With smart algorithms, the same can be accomplished within just minutes in some cases. This is also the stage where you will get to know the monthly amount you need to pay based on your risk factor.
This is also the stage where you need to do some online sleuthing job. That includes checking out various competing companies and see which of them offers you the best deal via-a-vis the monthly amount you need to pay, what you gain after the end of the insurance terms, and what regulations, if any, that you might be subjected to.
After you have zeroed in on the one company that you think suits you best and offers the best deal, go for it. The next step might require an agent visiting your place to complete the remaining formalities. Or it could be entirely an online process where you make the payment via your cards or other online means so that the insurance coverage starts to take effect. The companies send you the policy documentation online while some companies also send a hardcopy of the same if you opt for it.
So we hope this helps you understand the basic things that you need to consider when buying a life insurance policy.