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A Brand New Day
(Pallav Bagaria John Rungsung) (If you have any queries or would like more information then please feel free to email us at  :  Jan/07/2018 07:27:PM
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(A weekly financial column covering financial basics)

3 Mistakes to avoid while buying Life Insurance 
Buying a life insurance policy is a suitable way to face the uncertainties of life. A life insurance protects your family members so that they do not have to grapple with a financial crisis in the event of death of an earning member. However, sometimes out of ignorance, the benefits desired out of the insurance policy are not available to us due to certain mistakes made while buying the insurance policy. Such mistakes may result in higher costs to you or even extinguishment of overall policy benefits. 
Mohammad Ali once said, “I''ve made my share of mistakes along the way, but if I have changed even one life for the better, I haven''t lived in vain.” 
Here are 3 mistakes you must avoid while buying life insurance policies:
1. Ignoring need evaluation
Even while the rule of thumb calls for an insurance cover of 10 times the annual income, insurance requirements are still specific to each individual and one size doesn’t fit all. It depends on the age, health, family status and requirements, existing savings and loans of the individual. A cover that would work for you in your 20s may not be suitable as you grow older. 
Just to illustrate, if you are single, you might not need a higher insurance cover. Similarly, if you have a family with non-working spouse and children, you might need sufficient cover for their financial stability. Further, in case you have sufficient accumulated savings and lesser loan, you might consider a lower insurance cover. 
So, finalize the sum to be assured after proper evaluation and do not pick a figure randomly. In case you end up settling for a lower sum assured, the whole purpose of getting insured will be defeated due to the risk of financial troubles still persisting.
2. Waiting too long to get Insured
“I am a young energetic person, I don’t need insurance right now.”, “I don’t have any health issues, why do I get myself insured?”. We often make such assumptions to avoid buying insurance policies. But, don’t forget that premiums for your insurance cover will be lower if you are younger. So, start early to benefit from lower premiums and coverage for unforeseen risks. One can consider buying protection plans, which are the cheapest among the insurance products basket and provide large covers with minimal costs. 
3. Making Incorrect Disclosures
“I smoke, but how will the insurer know that I do. Let me have a lower premium by saying I don’t smoke.” Said an ignorant insured who stands a chance to lose his risk cover.
Another quite common mistake noticed is with regards to making incorrect disclosures in the policy purchase form, specifically in respect of health conditions and existing diseases. The disclosures may be incorrect due to ignorance or to avail better premium rates. But one should be diligent enough in filling the details while buying the policy, so that no vital information is left out. This is important to avoid possibility of disclaim of liability in case of incorrect disclosures. So, it is better to pay some additional premium, than to forego the entire premium and still not get the benefits as desired. 
These are little things to be careful about which certainly go a long way in taking care of your financial insecurities. It’s always better to be safe than sorry..  

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