Things to know before buying an insurance plan

How do you protect yourself from the rain? now you must be thinking it's simple just use an umbrella. But what if I ask you how you will protect yourself from sudden health emergencies and uncertainties well, health insurance and life insurance is the answer. Insurance is just like an umbrella that protects you and your family from possible eventuality. If you invest in the financial markets you must be familiar with the term risk management that's what insurance does. Insurance reduces the risk of financial losses and crises in emergencies. Getting life insurance and health insurance is important but choosing the right insurance is also very significant. That's why in this article we have summed up things you need to know before buying an insurance plan.

What is life insurance and things to know before buying life insurance?
Our family is who we love and care about the most and that's why it's important to plan for their financial security in your absence. Life Insurance is a contract between a customer and an insurance company. An insured person has to pay a premium to the insurance company and the insurance company promises to pay a certain amount for the death of an insured person to his/her family. If your family members are dependent
on you financially then it is the most important thing for you to buy a good insurance policy for your family's future.
Below are some things you have to know before buying life insurance.

1. Age
   Get life insurance as early as possible. If you start at an older age you will have to spend more on premium amounts. At a young age, people tend to think that they don't need life insurance but this can be a very big mistake.
2. Total coverage
   It is important to figure out how much money you have to leave behind for your loved ones. Total coverage of your insurance should be 15 - 20 times your annual income.
3. Don't mix insurance with investment
   Insurance is not an investment so always choose a basic term insurance plan as it has affordable premium and good coverage. Instead of spending on insurance schemes like U-lip or endowment plans, invest this balance amount in mutual funds and earn good long term returns.
4. Claim settlement ratio.
   This ratio represents how many claims are settled by the company. This is an important factor on which you can choose a good insurance company.
5. Amount settlement ratio.
   This ratio represents if a company is settling a high amount of claims or not. There is a possibility that the company is only settling a smaller amount of claims. This ratio is a good indicator to choose a good insurance plan.
6. Rider / add on
   If you want additional benefits on your basic term insurance plan then you can opt for a rider. Rider or add on provides benefit in case of permanent disability or accidental death. The premium amount increases if you opt for any such ad one but it's still an affordable option than u-lip or endowment plans.
   What is health insurance and things you need to know before buying health insurance?
   We are in the middle of the pandemic, inflation rates of medical expenses are at an all-time high. The time itself is indicating the need and importance of health insurance. Health insurance is insurance that covers medical expenses which includes hospitalization, medicines etc. A sudden health emergency can wash away all your life savings and that's why it is important to have health insurance. Good health insurance safeguards your family, protects your savings, gives tax benefits and most importantly protects the health of you and your family. But getting a good health insurance plan can be quite a task.
   So below are the few things you have to think about before getting health insurance.
   Things to know before buying health insurance.
7. Family insurance
   Don't buy a family insurance plan if you have senior citizens or someone with a serious disease in the family as it will lead to an expensive premium amount. Make sure to buy an individual plan for senior
   citizens.
8. No claim discount plans
   Before buying health insurance make sure it has a no-claim discount benefit. No claim discount benefit offers a discount on premium if you do not claim your insurance in a year.
9. Avoid buying copayment health insurance
   Copayment health insurance only pays a certain percent of the total claim. For example, If you have copayment health insurance you will have to pay 20% of your total bill and the insurance company will only pay 80% of the total bill. So strictly avoid buying copayment insurance.
10. Pre and post-hospitalization expenses
    Health insurance covers all the hospitalization expenses but many health insurances don't cover pre and post-hospitalization expenses. Make sure to choose a plan which covers all these extra expenditures as well.
11. Restoration benefit on family insurance
    If you buy a family health insurance plan then make sure to ask for the restoration benefit. Restoration benefit restores the claim limit after being used for one member. It ensures the safety of the entire family.
12. Daycare treatment
    Health insurances mostly cover only hospitalization charges but what if the treatment lasts just for a day. That's where the daycare treatment facility works. A daycare treatment facility lets you claim the hospital charges even if it's just for a day.
13. Tax benefits
    There are multiple tax benefits available on health insurance premium amounts. Health insurance premium up to 1.5 lakh is deductible from income tax. So health insurance provides safety along with extra benefits.
    Multiple companies and agents sell health insurance and life insurance which makes it difficult to choose the right one. There are multiple aspects an individual has to consider before buying health and life insurance. Many companies offer attractive deals but they never really help in emergencies. That's why it is important to read all the terms and conditions carefully. Make sure to check the hospital list where your health insurance will be valid. Make sure to follow all the premium due dates to avoid interest expenses. That was all you needed to know about health and life insurance and things to know before buying them. Now analyse the perfect insurance for you and your family to secure your health and life.