5 Checklist while Buying Life Insurance through an intermediary

Insurance intermediaries are individual or corporate agents who are licensed to conduct business on the insurance company’s part and act as a bridge between the client and insurer. While you plan to buy insurance through intermediaries who provide more personalized dealing, make sure you have a checklist to scrutinize the process compliance.

1. Stature of the insurer : While buying life insurance , you need to make sure that the insurance provider is well-reputed in the market and holds a reliable history of financial stability in the market turmoil and its related conditions.
2. Credentials of the intermediary : The next important thing to probe is the credential of the intermediary you are in collaboration with. Since insurance involves a lumpsum amount of money to deal with, there is a lot of vulnerability involved in terms of theft and fraud. Make sure the agent or intermediary is a genuine one by cross-checking their employee ID and other details with the company.
3. Most suitable plan : Once you are sure of the company and agent credentials, the next thing that needs to be done is to narrow down on a plan that fits you best. This is called risk profiling. Risk profiling involves understanding what all needs are desired to be met, what is the financial capacity of the client, and are there any special riders required (for example critical illness or family inclusion rider).
4. Term plan vs Comprehensive Plan vs ULIP : Insurance scheme can be availed in three different modes. A basic term plan which covers for the life of the insured and guarantees a lumpsum amount in case of a mishap. Or a comprehensive plan that comes with different inclusions and can be customized depending upon the client’s requirements. The third mode is the ulip (Unit Linked Insurance Plan), which invests in debt or equity schemes and generates returns accordingly.
5. Form filling : Never leave form filling to the agent, even if you have known the agent for some time. There may be some recent changes in your details or things that others may fill incorrectly. Disclose all the important and relevant information in the form and hand over all the updated documents to the intermediary for smooth approval.

Preparing a check list of questions before finalizing your insurance plan would help you get the best plan for yourself.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.