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  • Stuck with a life insurance policy? Here are your options

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    Purchasing a life insurance policy is not a small decision. In fact, it is one of the most important decisions you can take during your lifetime, and also one which has the power to have a significant impact on the lives of your loved ones. Life insurance is essentially a long-term contract between an insurer and the insured which involves the insurer providing life insurance protection to the insured for a specific period. The cost of getting life insurance cover is known as premium which is to be paid by the insured based on a pre-decided mode or frequency.

    Major Reasons Why People Buy The Wrong Insurance Policy

    When it comes to purchasing alife insurance policy, plenty of information already exists on the topic, which most insurance buyers do take into account before buying a policy. However, there are also many others who end up buying a policy that is unfit for them and their needs. The best example of this is the tax season when people make a beeline for buying insurance policies to save on tax, without giving much thought to their needs. Due to this, they often end up buying a policy which they may be of little, to no use to them.

    Another major reason why people end up buying the wrong insurance policy is due to mis-selling by insurance agents. Often people take help from an insurance agent who assists them in selecting the right policy. These agents are usually associated with a particular insurer, and end up pushing policies which would get them the most commission. In doing this, they tend to sell the wrong type of policy to a buyer, who is least likely to get any benefit out of the policy.

    In addition to this, people also tend to buy life insurance based on a friend’s or family member’s recommendation, someone who may have benefited from the policy. However, one must always remember, that because no two individuals are the same, their needs and requirements will not be the same either. And this is the reason why, the same policy might be highly suited for one individual, while for another, it may be completely useless.

    Now, the topic in question is, if you have purchased the wrong life insurance, what options do you have to get out of the situation? There are actually, not one, but five options that you can choose from, depending on the type of insurance policy that you have taken. Read on to find out.

    Amp up the coverage of your plan

    If your insurance plan is unfit because it provides insufficient coverage, you always have the option to increase plan coverage. This can be done easily, by purchasing a second plan which will help make up for the gap in coverage and provide you with the amount of sum assured that is adequate for your needs. When buying additional life insurance coverage, it is important to keep in mind that different types life insurance plans charge different premiums. Considering this, it is often most recommended that if you are looking to get additional coverage on an existing life insurance policy, it is ideal to go for a term insurance plan, which offers a high amount of cover at an affordable cost.

    Another option which you can consider to increase your plan’s coverage it to take add-on covers. Add-on covers or riders are designed to provide added cover for risks which may not be covered under the policy such as critical illness, accidental death, etc.

    Halt your premium payments

    If you have a term insurance plan, you would be well aware that these plans do not offer any survival benefit. They also don’t do not accumulate cash value. Therefore, if you have a term insurance plan which is not suited to your needs, you have 2 options. First, you can discontinue premium payment on the plan which will cause your plan to lapse automatically after a certain period. The other option is applicable only if your plan is still in its free-look period. In this case, you can place a request to return the plan, following which, you will receive a refund of the premiums which you have already paid towards the plan, after the deduction of certain charges. If your plan is not in the free-look period any more, you can also discontinue the plan by not paying the renewal premium.

    Surrender the policy

    Besides a term plan, most other types of life insurance plan offer policyholders the option to surrender their policy. Policy surrendering basically means that if the policyholder terminates their policy before it reaches maturity, the insurer will pay the former the cash value which the policy has acquired during the period it was active. This cash value is known as policy surrender value. So, for instance if you have an endowment policy or a ULIP (unit-linked insurance plan), both of which have surrender value, then you can exit the policy by surrendering it to the insurer.

    Once you have surrendered the policy, the insurance cover shall cease and the insurer will provide you the surrender value which your policy has accumulated over the years until surrender. Also remember that insurers have certain terms and conditions for policy surrender. A policy will typically have to have been active for a certain number of years, with all due premiums paid in full for the term, before it can be surrendered.

    Make the most of the policy’s free look period

    If you have purchased a policy which you soon realize (after having bought it) that it is not suited to fulfil your needs, you can return it and get your money back. Keeping the interests of life insurance policyholders in mind, IRDAI (Insurance Regulatory and Development Authority of India) has made it mandatory for insurers to provide a 15 day free look period on all policies. The concept of free look period is applicable to life insurance and health insurance policies. The free look period begins from the day that the policyholder receives the policy document. To cancel or return a policy during the free look period, the policyholder must put in the request to return the policy in writing, to the insurer. Following the receipt of the request, the insurer will then proceed to refund you the value of premium which you have paid towards the policy after making certain deductions such as proportionate risk premium for the cover period, stamp duty charges, medical examination charges, etc.

    Convert to a paid-up policy

    If you have an endowment insurance policy or a ULIP, and wish to exit the plan, you can do so by converting your policy into a paid-up policy. Utilizing this option will depend on whether or not your insurer has given you this option on your policy. What is a paid-up policy? A policy acquired the paid-up status if the premiums have been paid for the minimum number of years and discontinued thereafter. In this case, the policy will continue till it reaches maturity, but the benefits payable under the policy will be reduced in proportion to the premiums that have been paid. If you have an endowment plan, you must make annual premium payments for a minimum number of 3 years (5 years for ULIPs) to be eligible to convert your policy into a paid-up one.

    Stuck with a life insurance policy? Here are your options Reviews

  • Page 1 of 50 1 2 3 4 5
    • Aviva Life Insurance
      "Good Service"
      0.5 4.0/5 "Great!"
      I've a life insurance policy with the Aviva Life. I am paying 8000 per year via Online. The sum assured is 1 Crore and considering the policy features and plan benefits it has been a very good experience with the life insurance policy.
      Was this review helpful? 0
      , gurgaon
      Reviewed on Jul 14, 2018
    • Aegon Life Life Insurance
      "Average Service"
      0.5 3.0/5 "Satisfactory"
      I've a term life insurance policy with the Aegon Life. I am paying a premium of 5000 per year, The sum assured is 50 lacs. I am making payments online. Claim settlement ratio was above 90% so it was a confident decision in choosing as my life insurance provider.
      Was this review helpful? 0
      , pune
      Reviewed on Jul 14, 2018
    • LIC Life Insurance
      "This is great policy for Employer-Employee"
      0.5 5.0/5 "Blown Away!"
      We (CleverMind Solutions Pvt Ltd) took this policy for our employees, they are very happy and we are also happy because we are providing life insurance cover of Rs 10 lakhs to every employee. What a unique product it is with affordable premium .
      Was this review helpful? 0
      , bangalore
      Reviewed on Jul 13, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I've a life insurance policy with the LIC. I am paying a premium of 31000 per year. I am paying the premium via the agent and sometimes via cheque, tenure of the policy is 20 years. It has been a smooth experience so far with the policy and their services.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jul 13, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I've two life insurance policies with the LIC, for one policy I am paying a premium of 24000 per year. I never faced any issues with the policy and their services. I pay the premium sometimes via the agent and sometimes via Cheque. So far it has been a very good experience.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jul 13, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I've started an educational policy with the LIC for my children for which I am paying a premium of 400 per month. The policy is specifically focused on the educational requirements. So far it has been a good experience,
      Was this review helpful? 0
      , chennai
      Reviewed on Jul 13, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I've 5 life insurance policies with the LIC, four of them is the Money Back policy for which I am paying a premium of 700 Per month, the premium gets auto debited from the salary account. I never had any issues with their services so far. Considering the low premium I am paying the policy is a good one.
      Was this review helpful? 0
      , chennai
      Reviewed on Jul 13, 2018
    • LIC Life Insurance
      "Good Policy"
      0.5 4.0/5 "Great!"
      I have my life insured with LIC from last 25 years and it is a long term policy. I am satisfied with the returns and benefits of this policy. I pay my premium once in a year by cheque and i am convenient with the payment options. The maturity period for this policy is 25 years.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jul 13, 2018
    • LIC Life Insurance
      "Good Policy"
      0.5 4.0/5 "Great!"
      My life insurance policy is with LIC from more than 10 years and it is a term insurance. I pay a premium of Rs 9000 on yearly basis and i am convenient with the payment options. I am satisfied with the terms and conditions like the policy coverage and plan benefits of the policy.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jul 13, 2018
    • Kotak Life Life Insurance
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I've a life insurance policy with the Kotak and I am paying a premium of 13000 per year. It has been a hassle free experience so far. Considering the policy features I haven't faced any issues with their services so far.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jul 12, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 4.0/5 "Great!"
      I've a life insurance policy with the LIC. I am paying a premium of 700 rupees per month. There are no commendable benefits with the policy. The premium gets auto debited from account. So far there hasn't been any issues with their services.
      Was this review helpful? 0
      , chennai
      Reviewed on Jul 12, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 4.0/5 "Great!"
      I've three life insurance policies with the LIC. I am paying a premium of 500 rupees per month. The premium gets auto debited from my account via ECS. I haven't faced any issues with their services.
      Was this review helpful? 1
      , chennai
      Reviewed on Jul 12, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I've a life insurance policy with the LIC. I am applying a premium 20000 per year. After 4 years I'll get some money back. The premium gets auto debited from the account via ECS. I never faced any issues with the policy and their services.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jul 12, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I've a life insurance policy with the LIC. I am paying a premium of 1600 per month, the tenure of this policy 30 years. I am making payments via an agent which is pretty much convenient. So far there hasn't been any issues with their services.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Jul 12, 2018
    • LIC Life Insurance
      "Good Policy"
      0.5 4.0/5 "Great!"
      I have my life insured with LIC from last 7 years and it is a long term policy. I am happy with the returns and benefits of this policy. I pay my premium once in 6 months through net banking and i am convenient with the payment options. The maturity period for this policy is 20 years.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jul 12, 2018
    • LIC Life Insurance
      "Good Policy"
      0.5 4.0/5 "Great!"
      I have a life insurance policy with LIC from last 16 years and it is a long term policy. I am satisfied with the returns and benefits of this policy. I pay my premium once in 3 months by cash or cheque and i am convenient with the payment options. The maturity period for this insurance is 20 years.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Jul 12, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I've a life insurance policy with the LIC. I am applying a premium of 20000 Per year, I make payment at the branches, the branch staff are also welcoming and supportive. Overall it has been a hassle free experience with the policy and their services.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jul 11, 2018
    • LIC Life Insurance
      "Above average service"
      0.5 4.0/5 "Great!"
      I've two money back polices with the LIC. I am paying a premium of 25000 per year. I will get money back after 4 years. The tenure 16 years. I can even discontinue the policy after 4 years. Considering the policy coverage and plan benefits it is a very good policy to hold.
      Was this review helpful? 0
      , gurgaon
      Reviewed on Jul 11, 2018
    • LIC Life Insurance
      "Good Service"
      0.5 3.0/5 "Satisfactory"
      I've a Jeevan Anand Policy with the LIC, I am paying a premium of 30000 half yearly, The tenure of the policy is 30 years . I am paying branch payments. The branch service is good. So far there hasn't been any issues with the policy and their services so far.
      Was this review helpful? 0
      , gurgaon
      Reviewed on Jul 11, 2018
    • LIC Life Insurance
      "Not satisfied"
      0.5 1.0/5 "Really Bad"
      I hold a life insurance policy with LIC from more than 2 years and it is a long term policy. The name of the policy is Jeevan Anand and i pay a premium of Rs 28000 on yearly basis through net banking, The premium amount is quite high and i am not finding much benefits in this policy.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jul 11, 2018
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