With the entry of the private players in the insurance sector, Insurance consultants no longer just sell policies but provide complete finance solutions to people. So, before you buy your policy, be sure you have a complete solution.

Normally, when an Insurance consultant from the private player meets someone regarding insurance, he probes for relevant information pertaining to finances and other personal details. After this, he suggests a solution to the prospect keeping in mind not only his short-term needs and long-term goals but also his financial standing.

Many a times, it so happens that the prospective customer is able to afford a policy of a very fat amount but abstains from going for a larger policy because he is not very confident that he would be in a position to afford the premium for the next 20, 25 or 30 years. There is, however, a solution to this problem.

What the prospective customer should do is to split the policy into several parts.

Splitting the policy in to parts will serve more than one purpose.

• If the policyholder needs finance for some purpose, he can pledge a part policy as collateral security for a loan rather than one single policy of higher amount.
   

• In case of a financial crisis, the policyholder can get some of the policies paid-up (subject to conditions) or surrendered while the others can be kept in force to provide monetary protection against death.
   

• Each policy can be so designed that the premium is paid at regular intervals during the year as against one lump sum.
   

• Each individual policy can be designed to mature at different time periods. For example, if a policy is split in to 3 different policies, one can be taken for 20 years, the other one for 25 years while the third one for 30 years.
   

• Last, but not the least, the policyholder can nominate or assign different policy to different people.

One advantage of this awareness would be that, the policyholder will be more confident when he applies for a policy. He can protect himself with the insurance company for a longer duration and also for a larger sum.

So, when you decide to take that life insurance policy, be sure to consider this option.

If you are in Mumbai and are interested in knowing more about how life insurance can be used as a financial planning tool, please register here.

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