best options available that will give you the income you want. Understand the implications clearly and once you are sure which plan works best – in terms of ease of payment (premium) and benefits provided – go ahead.
How do I know it’s the right policy for me?
Once you have an estimate of how much insurance/savings you will need, it's time to think about the type of policy that best fits your needs. Usually there is no one policy that can meet all your life insurance needs.
You can choose a policy depending upon the risk profile and how much time you have to attain the financial goal you are planning for – If you have a mammoth capacity for taking investment risks and your financial horizon is over 10 years, you may choose ULIPs with an equity bias. These policies are subject to market risks and they allocate your premium amounts in equity and debt depending on the type of funds you choose ranging from equity, debt and balanced fund depending upon you risk profile.
For the risk averse, traditional plans make the most sense. For instance, if you are a parent of a growing child, a single plan may not serve the purpose of providing for your dependents. You will need a plan for their future needs as well and something specific for the child's education needs. A combination of products works the best. Likewise, you may initially have a policy with no additional cover for disability due to illness or accidents, but later in life you may feel the need for such a cover.
Should I throw in a cover that includes various untoward incidents that may happen?
Policies with such a cover, say for disability or critical illness, are often viewed as ‘expensive’. Some see it as money spent on policy features they hope or think they will never use. Yet without adequate insurance, you run the risk of financial disaster should anything untoward happen to you. The key is to buy the right type of insurance with the right amount of cover at the right time. Don’t