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A life insurance policy is an integral part of financial planning for anyone who wants to keep their loved ones safe. When you buy life insurance, you are essentially entering into a contract with the insurance company as per the agreed terms and conditions.
As per the contract between you and the insurance company, the insurer will pay the insured's family a specified amount on his/her death. The policyholder has to pay a premium to receive this financial cover. To make sure that your family is secured well, you need to understand your insurance contract properly.
An insurance document is a legal contract; any oversight or mistake could leave you and your family financially vulnerable in the time of need. Here’s a look at five key aspects that you should review in your life insurance contract.
1. Complete and Correct Information
When you buy an insurance plan, you have to fill out various personal details and details about your health and occupation. Any oversight, whether intentional or unintentional, can result in your claim getting rejected in future. When you fill the form, ensure you have entered all details correctly and have not left out filling any details.
Not giving correct information about pre-existing conditions (if any) can also result in the rejection of policy claims. Incorrect and incomplete forms are the most common cause of claim rejection. The insurance company provides coverage and calculates the premium based on your age, medical history, professional details etc. If these details are incorrect, then the insurance company will reject the claim.
There is a possibility that the insurance company may have mentioned the details inaccurately. When you go through the policy document, check the details thoroughly and, if they are inaccurate, inform the insurance provider as soon as possible.
2. Check the Policy Benefits
You buy life insurance plans with some financial goal in mind, such as protection, wealth creation or retirement. Review your policy document and check if the benefits mentioned are aligned with your long-term goals. You may have overlooked some aspects or misunderstood something, or there could have been a miscommunication at the time of buying the policy.
When you buy a ULIP policy, check for details like premium allocation charges, mortality charges, fund management and administration charges in the document. These charges reduce your actual investment; being aware of them helps you plan your investment better.
ULIP insurance plans are market-linked; they help you in wealth creation and offer life protection too. Review your document to ensure that the funds you have chosen are as per your risk appetite.
3. Policy Riders# Are Important
Riders help you tailor your life insurance plan as per your needs. Riders can help you get additional benefits by paying some extra premium. You should choose the riders carefully after understanding how they can benefit you and if you need them. When you buy a life insurance policy, find out about the additional riders available and choose the ones that can provide you with comprehensive cover.
The ULIP insurance plans offered by TATA AIA Life Insurance provide riders that can provide you with additional benefits when you buy a ULIP policy. You could choose a rider that allows a premium waiver in case of total and permanent disability of the policyholder. You could also opt for a rider that offers additional protection, which takes care of hospitalization costs. The health cover can complement the existing coverage provided by your ULIP insurance policy.
Review your life insurance contract to see if the riders mentioned in the policy are the ones you chose. Also, check if the rider that you had opted for is included in the policy document.
4. Do Not Forget the Exclusions
As you should know what your life insurance plan covers, you should also know what it does not cover. The exclusions section of the insurance contract is often ignored. Being aware of the exclusions of your policy can save you from some nasty surprises and also helps you plan better. Almost all life insurance policies do not pay death benefits if the policyholder dies by suicide within 12 months of purchasing the policy.
When you make a life insurance policy check, read the fine print. If the exclusions leave you vulnerable financially due to the nature of your job or lifestyle, then you should buy a plan that is suitable for you.
5. Premium Payment Tenure
You have to pay a premium when you buy a life insurance plan. Depending on the policy you choose, this payment could be one time or at regular monthly, quarterly or yearly intervals. Not paying your premium on time could result in losing your insurance cover.
You can check a life insurance policy online to find out about the premium payment details and frequency before you decide to buy it.
When going through the policy contract, you should check for the number of years you have to pay your premiums. Confusion about the premium term can also leave you and your family without adequate cover if you stop paying premiums earlier than what the insurance policy requires.
Always be regular and prompt in paying your insurance premiums. Tata AIA Life Insurance online payment allows you to pay premium online; you do not have to visit the branch or insurance company's office. Online payments ensure that you do not miss out on paying your premium and remain financially safe.
Choosing the right life insurance policy to keep your family secure is crucial. Make this decision after careful research. Assess your needs, and then pick a plan that suits you best. However, you cannot rest assured after picking and buying an insurance plan.
Going through your policy contract in detail will help you understand what your plan offers you and what it does not. Keeping the above factors in mind when reviewing your policy document will keep your family safe from any financial hardships.
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#Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch
Insurance cover is available under the product.
The products are underwritten by Tata AIA Life Insurance Company Ltd.
The plans are not a guaranteed issuance plan and it will be subject to Company’s underwriting and acceptance.
For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER
THE LINKED INSURANCE PRODUCT DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICY HOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF THE FIFTH YEAR.
Past performance is not indicative of future performance.
All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.
Please make your own independent decision after consulting your financial or other professional advisor.