Best insurance policies to safeguard against uncertainties of life

Preparing for life's uncertainties assumes greater importance than many other things. Instead of nurturing anxiety, we should assess how ready we are to overcome such uncertainties. In the post-Coronavirus scenario, most people are adopting a sound financial plan. Especially, awareness on life insurance policies has increased.

Hyderabad: One major question that comes up among elderly people is whether they are eligible for taking an insurance policy or not. It all depends on what kind of cover they are trying for. We should first assess our needs before taking the policy. Annuity policies may be enough for senior citizens. Getting term policies that are limited to protection, is somewhat difficult. If there are no health problems, policies can be taken by paying a higher premium. Even if one suffers from pre-existing diseases, premium loading will be bound by certain limitations. Only in special circumstances, an insurance company denies policies. So, despite old age, one should take insurance policies without fail.

We should be very cautious while choosing life plans. Lots of varieties are there in life insurance policies. Some are limited to just protection while others help in making long-term investments. Some plans provide pensions after retirement. Some other policies are based on the stock market. There are policies that give life-long protection. So, insurance plans cannot be compared to one investment programme or another all the time.

At the same time, one policy in a certain category cannot be compared to another policy in a different category. Usually, life insurance policies are long-term plans. They provide tax exemption on premiums paid by policyholders. They also give compensation if anything unexpected happens to the policyholder. Such benefits will not be there in investment-based plans.

The unit-linked investment plans (ULIPs) are useful to achieve two objectives--both life protection and long-term investment--in the new ULIP plans, premium payments are comparatively lower. If unforeseen expenses come up we can make partial withdrawals as well. What the policyholders should do when they face hurdles in the payment of claims? What to do when the insurance firm is unwilling to pay compensation? An insurance company's basic principle is to pay compensation as determined in the policy once anything happens to the policyholder.

A policy is an agreement of trust between the holder and the company. So, a person taking the policy should provide all the required details. Details about health, financial situation and habits should be shared clearly. Premium payments should be regular without any defaults. If all these details are properly given, there won't be any delay in giving compensation if anything happens. In today's digital era, payments of claims are faster and hassle-free.

Individuals and families have different financial needs, never the same. What is a good policy for one person may not be fetching for another. Considering this, policies should be selected based on your financial necessity and future objectives. In case of doubts, we can seek the advice of experts. Only a properly chosen policy will come to your rescue in times of uncertainties and tough times, says RM Vishakha, MD and CEO, IndiaFirst Life Insurance Company.