Life Insurance is one of the most essential financial instruments. The number of people opting for Life Insurance has gone up substantially in recent times thanks to rising awareness levels. There are however still a large majority of people either without Life Insurance or unhappy with their Life Insurance plan. Not buying the right Life Insurance plan as per their needs or opting for a higher cover policy without needing it or opting for a wrong policy are common reasons for such disappointments. Therefore, if you are looking to buy a Life Insurance policy, avoid the common mistakes to ensure you seek the right policy as per your needs. We take a look at the common mistakes.
One of the common mistakes which people make while buying an insurance policy is treating the Life Insurance as a protective as well as an investment vehicle. All the traditional plans like money-back and endowment have insurance as an element but they are not purely investment products because of the charges involved. Ideally, investment-linked insurance plans should not be the first life cover you buy. You can consider buying a Term Plan, which provides high coverage at low premium costs, thus saving you money that can be diverted to attractive investment options such as Mutual Funds.
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