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Remember these points when buying life insurance

October 11, 2019 09:00 IST

Remember, you are purchasing the policy for your financial security – avoid falling for offers, which seems too good to be true, suggests Vibha Padalkar, MD & CEO, HDFC Life.

Photograph: Reuters

In the past 19 years, the life insurance business has gone through a sea change.

Gone are the days when the head of the household would purchase a policy through the local insurance agent who would mostly be a relative or a friend.

There has been a visible increase in interest towards the product category, which can be attributed to increasing preference for financial savings.

This, in turn, has increased the share of life insurance within financial assets.

The government has launched various initiatives, which have further given an impetus to financial savings -- implementation of JAM (Jan Dhan, Aadhaar and Mobile) trinity, the launch of affordable PMJJBY (Pradhan Mantri Jeevan Jyoti Bima Yojana) and PMSBY (Pradhan Mantri Suraksha Bima Yojana) social insurance schemes, the Atal Pension Yojana promoting pension and set up of small finance banks and payment banks to increase financial inclusion.

 

Recent years have also seen a change in the way the product is bought as well as sold.

The digital platform has made it easy to purchase life insurance -- the product can now be purchased within minutes by even the non-savvy internet user.

However, while the process of buying life insurance has become quick and straightforward and the number of options has increased manifold, at times the myriad products offered by multiple life insurers make you feel spoilt for choice (or in most cases, leave you completely confused).

Also, there will be friends and family who could offer advice based on experience or plain hearsay, adding to the confusion.

At such times, it is useful to remember that your decision-making process should be based on facts and your thought-through objective more than anything else because when it comes to life insurance, one size does not fit all.

The following points should be kept in mind while purchasing life insurance.

Vibha Padalkar
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