Insurance brings numerous practical benefits, serving not only as a financial safeguard against various risks but also as an effective channel for asset accumulation. However, when engaging in insurance, it’s crucial not to hastily sign a contract; careful consideration is essential to avoid selecting the wrong product. The following article provides a formula to help you acquire a suitable life insurance policy.
1. Clearly Understand Your Needs
Firstly, identify your needs when participating in life insurance, such as:
- Protecting the family’s financial stability in case of unforeseen events due to limited financial resources.
- Planning for children’s education, study abroad, or startup ventures.
- Building a reserve fund or investing for profitable returns.
Understanding your needs is vital as it forms the basis for determining the necessary benefits in a life insurance package.
2. List Essential Insurance Benefits
After identifying your needs, the next step is to determine the necessary insurance benefits and prioritize them. Common life insurance benefits include:
- Whole life coverage for death or permanent disability.
- Medical treatment and healthcare benefits.
- Hospitalization coverage.
- Critical illness coverage.
- Accident coverage.
- Educational benefits.
- Investment benefits.
You can choose insurance products with individual benefits like protection, education, investment, or combine multiple benefits in one insurance package.
3. Consider Financial Conditions
Each life insurance package comes with different premiums, depending on factors like benefits, coverage scope, etc. For instance, insurance products with broader coverage may have higher premiums compared to basic protection. However, selecting the highest premium is not always beneficial. What matters is choosing a premium level that suits your financial conditions. Opting for insurance with excessively high premiums can lead to payment difficulties, disrupting the payment schedule and affecting insurance benefits. Therefore, carefully consider your financial conditions, allocate 10-15% of your monthly income for insurance, and balance your expenses accordingly.
4. Evaluate Life Insurance Products
After determining your needs and financial conditions, classify and evaluate insurance products based on suitable benefits and reasonable premiums. If you find product selection challenging, consult with an advisor. They can recommend insurance packages aligning with your preferences.
Additionally, research thoroughly about benefits, exclusion clauses, insurance claim procedures, flexibility, etc. This ensures you avoid situations where compensation is denied in case of risks. Choose products from reputable insurance companies with strong financial standing, professional customer service, and efficient claims processes.
5. Select Premium Payment Period and Life Insurance Term
Choose the insurance term (5, 10, 15, 25 years, or lifelong) based on your needs and financial capabilities. A longer insurance term offers more advantages, providing extended protection, healthcare benefits, and a substantial accumulation for future plans or retirement.
Moreover, modern life insurance products offer flexibility in premium payment methods—either a lump-sum payment or periodic payments (monthly/quarterly/yearly). Depending on available financial resources, select a payment period that suits your financial situation. While a one-time payment requires a significant upfront budget, periodic payments allow financial flexibility over time.
6. Research the Insurance Contract
Once you’ve chosen a suitable life insurance package, participated in premium payments, and met the acceptance criteria, the insurance company will issue the contract. You have 14-21 days to review the insurance contract and decide whether to proceed with the agreement.
This formula aims to guide you in acquiring a suitable life insurance contract. Best of luck on your journey to success!
Cre: Jackilie/Confused.com
