5 things to know before getting an insurance

March is considered as fiscal year end and there will be salary hikes for most of the employees. They will be considering Life Insurance as an option for investment as it provides you tax benefits. But there are lot more to consider before getting a Life Insurance Policy. These 5 basic points might help you to look at how to evaluate how much and what type of life insurance is needed. 

1. Does buying life insurance make sense for everyone? If you have no dependents and enough assets to cover your debts and the cost of dying, then insurance is unnecessary cost for you. If you have dependents and enough assets to provide for them, then also you do not need of any life insurance.
2. If you have dependents (especially if you are the primary provider) or significant debts that outweigh your assets, then you likely will need insurance to ensure that your dependents are looked after if something happens to you.
3. "As you grow old, it will be harder to qualify to get an insurance. So better you get an insurance when you are young." This is how insurance agents pursue you. In brief, Insurance company makes money by betting on how long you live. If you have taken an insurance policy and you die young, you will be a bad bet for them. The simple fact is that insurance companies want higher premiums to cover the odds on older people, but they won't refuse to give an insurance at any age. That said, get insurance if you need it and when you need it. Do not get insurance because you are scared of not qualifying later in life.
4. Choosing the face value (the amount your policy pays when you die) depends on how much debts you have. You should buy an insurance with face value which pays off all your debts. If you are the only provider for your dependents, then you need a policy payout that is large enough to replace your income plus a little extra to guard against inflation for a set period of time so that any of your dependent may take responsibility of other dependents in that period of time.
5. Obviously there are other people in your life who are important to you and you may wonder if you should insure them. As a rule, you should only insure people whose death would mean a financial loss to you.  

These are basic 5 points you should consider while getting an insurance policy for yourself. If you need life insurance, it is important to know how much and what kind you need. Although generally renewable term insurance is sufficient for most people, but you have to look at your own situation.