Introduction
A life insurance plan covers the causes of death, whether natural, accidental, or suicidal. Whenever you buy an insurance policy, you should know about the coverage it will provide yoUnlikeike other specialized insurance plans, life insurance policies provide extensive coverage for various financial obligations of the policyholder. However, multiple life insurance plans in the Indian market offer specific coverages. And it would help if you chose a life insurance plan based on your needs.
You are at the right place if you need clarification about how much insurance coverage you need. Read on, as here we will discuss the areas covered by a life insurance plan and factors you must consider to understand how much insurance coverage you require.
What is the insurance coverage?
Every comprehensive insurance policy comes with a coverage plan. Insurance coverage means financial protection to the policyholder and other beneficiaries during live adverse events when you need monetary help. But there are many inclusions and exclusions in insurance coverage. So, when you compare an insurance policy with another, you must consider all the coverage exclusions and inclusions stipulated in the policy.
What do life insurance plans cover?
If you wonder how much insurance coverage you need or which insurance policy can cover all your requirements, a life cover can be a great solution. Life insurance covers many expenses and can provide more extensive coverage than medical or personal insurance.
However, it is essential to know what life insurance can cover and find out the suitable coverage for your –
- Long-term care and medical expenses
Good health insurance plans cover the insured’s medical expenses against illness and accidents. However, it cannot cover the expense of a costly treatment or the expenses of a terminal illness. On the other hand, life insurance covers all your medical expenses with additional expenses for long-term care.
A life insurance cover primarily focuses on providing death benefits through financial support to the insured’s family after their death. Still, these insurance plans can also come with living benefits. And if you want Insurance Plans and choose life insurance with living benefits, it can cover your living medical expense and terminal illness care expense.
- Child or spouse/ dependent care
The best life insurance plans can work as a replacement for your regular income, and they can cover all the expenses of a dependent’s care. This means the insurance can cover the cost of a child’s daycare, nursery school fee, nanny fee, and other expenses after your death. Also, the death benefit of life insurance can cover all the expenses of the dependent, whether your insurance beneficiary is a child, spouse, or an old parent. Thus, it covers all expenses of your dependent’s care if you pass away.
- Payment for co-signed debt
Paying out your debts is quite stressful, especially when you lose the financial support of your loved ones. Co-signed debts can create substantial financial stress on the family or loved ones. A life insurance’s death benefit can also help to pay out the co-signed debts after your death.
- Education cost
If you buy insurance plans online, you can find health insurance that offers various benefits and coverage, including the cost of your child’s education. So, if you’re the sole earner of your family and worried about how your kid’s education will be managed if you pass away early, life insurance can help you cover this expense.
Life insurance can help your child pay her education bills and tuition fees even after death. Therefore, when you plan to purchase an insurance plan, you can consider this factor when you compare car insurance plans.
- End-of-life expense
Life insurance also covers end-of-life expenses, including the cost of a funeral, casket, and reception, and other related costs. A health cover plan primarily focuses on the expenses after your death; end-of-life expense is crucial. However, final expense insurance also offers end-of-life expenses.
And when you compare insurance plans, you can get your ideal insurance coverage.
- Living a legacy behind
If you want insurance coverage that will provide financial support to your loved ones even after your death, then life insurance can help you. A good life insurance plan can help you leave a legacy for your loved ones, dependents, trust, or organization.
However, you must choose a suitable insurance amount to offer enough financial aid after your death. Also, remember opting for a higher sum can increase your insurance premiums.
What a life insurance not cover?
Usually, a life insurance plan does not impose a limit on a policyholder about the use of the death benefit payout. But there are some cases where an insurer may not pay the death benefit. Read all the exclusions when you compare an insurance policy with another.
- If the policyholder dies within the contestability period or two years of policy purchase.
- Many insurance policies also do not cover death by suicide within the contestability period. But there are also other provisions related to suicidal deaths.
- The beneficiary will not receive the death benefit payout in
- In cases of lapsed or expired life insurance popout.
- There can also be other exclusions. These exclusions vary from one insurer to another. Usually, risky professions and activities are excluded from the death benefit.
Factors to consider in understanding how much coverage you need
You must compare policies online to know which is perfect for you. But there are several factors that one must consider in understanding how much insurance coverage you need.
● Understand your liability-
A person has outstanding loans and debts. And these liabilities can become burdensome for your family if you die. You must adequately evaluate your liabilities when choosing an insurance plan.
● Consider your dependant’s monthly expenses-
People buy life insurance to extend financial help to their families and dependents after death. And you must choose a life insurance plan that can provide monthly expenses to your dependant/dependants.
● Consider life events-
With the best life insurance policy, you can plan for future events like your child’s higher studies or marriage. Thus, when you opt for insurance comparisons in India, you must remember life events to cover them with your plan.
● Consider future renovations-
Your home may need renovation, and it would be difficult for your dependents if you were away from them to provide financial help. Consider this aspect while choosing a life insurance plan. The best plan can help you plan future home renovations with ease.
Know which type of life insurance you need
If you compare car insurance plans with life insurance or health insurance with life cover, you will understand that life insurance can constantly offer more benefits and coverage than others. Though you must remember that not all life insurances are the same, their difference also reflects in their coverage. Here we will list different types of life insurance and their coverage-
- Term life insurance
As the name suggests, life insurance only covers a specific term. Most Term Life Insurance Policy comes with 30 years of the term, and once the term ends, the policy also ends.
- Whole life insurance
Unlike term life insurance, whole life insurance can cover the insured’s entire life. Also, the death benefit and premium costs are fixed in this insurance. However, the policy remains active for the entire life of the insurer and as long the insurer pays the premiums.
- Universal life insurance
Universal life insurance is similar to whole life insurance and offers coverage for the entire life as long the insured pays the premiums. But the universal policy claim value is not fixed as whole insurance and depends on the market value.
- Others
Besides term, whole, and universal life insurance coverage, there are several other life insurance plans available, like the money-back plan,
endowment plan, or retirement plan, etc., and just like the above three types, these plans also have their unique coverage. Thus, you must compare insurance policies with one another via any online insurance policy comparison site before you purchase a plan.
Conclusion
A few policies allow for coverage expansion. When you choose certain life events, like marriage or the birth of a child, the cover enhancement function allows the sum guaranteed to increase by a specific amount.
Nevertheless, keep in mind that this might also increase the premium. Evaluating rates and plans in light of your needs makes more sense. To choose the sort of insurance and the level of protection that will best suit your income and your family’s financial needs, seek expert assistance.
Deciding the coverage you need from an insurance plan is essential to maximize your investment. You know your required coverage help to compare insurance policy and find the most suitable insurance plan. If you are looking for assistance in comparing or purchasing insurance plans, you can visit Okbima. Okbima, India’s leading insurance comparison site, helps you compare and purchase the best insurance plans.
