24/02/2021
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7 things to consider before purchasing life insurance in Bangladesh
Life can be unpredictable. With life’s unpredictability comes stress and the fear of the unknown. “What will happen to our loved ones when we will not be here”, is a question that haunts most of us. But life’s unpredictability should not fill our vision of the future with uncertainties and fear. Rather with proper forward looking financial planning we can live our lives to the fullest regardless of what the future holds.
In that regard, life insurance can be our key to a tension-free, chaos-proof & certain life for us and our loved ones. Having a life insurance not only safeguards us but also ensures a certain future for our family and loved ones in the event of your untimely demise.
But, in Bangladesh such a wonderful financial tool is often filled with confusion & misconceptions because of lack of reliable and comprehensive knowledge resources on the topic.
That is why In this write-up, we will discuss 7 important things you should know about if you are considering purchasing life insurance. You can consider this as your go-to guide for all things life insurance in Bangladesh
1. What is a life Insurance?
At its simplest, life insurance is an agreement between a policyholder (you) and the insurance company, in which the insurance company promises to pay a sum of money to the beneficiaries (your family members/loved ones) in exchange for premiums if the insured person passes away, or upon maturity of the policy. We can categorize life insurance into two key types:
- Term life insurance: Term life insurance provides financial coverage for a specified period which usually comes in 10/15/20 or 30 years period. A lump-sum amount of benefits is paid out if the policyholder passes away while the policy is in force, or at the end of the term. Term life is the cheapest form of life insurance.
- Whole-life insurance: Whole-life insurance is a type of permanent insurance policy that guarantees a return to the beneficiaries at the demise of the policyholder. Whole-life insurance provides coverage for the whole life of the insured person. As long as the premiums are paid on time, the beneficiaries will certainly receive financial benefits upon death of the insured person.
Compare the Best Life Insurance Deals of Bangladesh Here & Decide for Yourself (will open popup for Life Insurance inputs)
2. Calculate your premium and coverage:
To select the right life insurance policy, the first and most important question to ask yourself is how much coverage you may need. The higher the coverage, the higher your premium amount is going to be. Select a premium you can afford. The factors that influence your premiums include but not limited to;
- Age
- Gender
- Health condition
- Medical history of your family
- Term duration
- Coverage amount
- Lifestyle
3. Compare insurance plans:
Before selecting an insurance company, explore your options and shop around for the best deal. There are plenty of insurance companies and what they offer significantly varies. Comparing prices not only allows you to understand better what you are buying but also helps you find the right fit at a cheaper rate.
At Nirapodbima.com we have almost all the major insurance deals listed so that you can compare and decide for yourself. Compare premiums, compare policies and choose the best offer that serves your objective, without the influence of misleading insurance agents.
Compare the Best Life Insurance Deals of Bangladesh Here & Decide for Yourself
4. Review the terms and conditions carefully:
Reading the terms and conditions of a life insurance policy can be overwhelming. However, to avoid any complications or problems, take your time, review and understand the terms and conditions you are agreeing to. If you have any confusion, clarify with your insurance company before signing the contract.
5. Pay your premiums on time:
If you don’t pay your premiums on time, your policy will lapse and you will no longer be covered. But, don’t panic already. If you accidentally miss a payment deadline, you can still take advantage of the grace period and reinstate your policy. To avoid complications, we recommend you to use EFT (Electronic Fund Transfer) to schedule your payments.
6. Claiming process:
While buying a life insurance policy, go through the claiming process carefully. By law, the insurance company is bound to settle the claim within a certain period. Do your research and check the Claim Settlement Ratio of the insurance company. It will give you a rational idea about the settlement history of the insurance company against the number of claim settlement requests it received. Be informed about the legal actions you can take in case they do not settle your claim on time.
7. Don’t hide any information:
It is a common mistake to hide information while applying for life insurance. Since the insurance price depends on the information you provide, it may be tempting not to disclose information about some pre-existing illnesses or conditions you have. Refrain yourself from doing so. Insurance companies often hire third-parties to verify the information you provide. Hiding vital facts or suppressing them can lead to your claim getting rejected. So, always tell the truth while disclosing your information.
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