4 Questions to Ask before Taking a Life Insurance Cover

The right knowledge helps you get the right protection.

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• Ask yourself – what is the intended purpose of the insurance plan you are taking?

• How much are you willing to spend to achieve your goal? A budget is necessary here.

• Your goal and budget should be sustainable over the long term /full duration of the policy.

What is my financial goal?

How long can I stay invested?

• Decide on your time frame while evaluating your premium.

• Ensure that the time frame is appropriate to the investment goal. Then you can stick to it without sacrificing other needs.

• Examples – 10 years for a child’s college fund, and 25-30 years for your retirement.

What's my risk appetite?

• Age: A young person can take more risks since they have few dependents.

• Asset Ownership: If you have more assets, you can afford to take more risk.

• Investment Experience: Prior knowledge of the markets helps you know your risk appetite.

The basic principle of investment is: higher the risk, higher the return. Consider the 3 factors given below carefully when deciding on how much risk you can shoulder.

What is my understanding of the product?

• Does the plan cover the intended financial goals in the unfortunate event of your death?

• What is the premium payment mode and frequency?

• What are the bonus track record, and benefits and charges of the policy?

Before you take any insurance product, you must have accurate and clear answers to the following three questions.

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The right knowledge helps you get the right protection.

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