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Home > Investing > The Ultimate Guide to Choosing a Life Insurance Policy

The Ultimate Guide to Choosing a Life Insurance Policy

Published by Gbaf News

Posted on May 28, 2020

6 min read

Last updated: January 21, 2026

Illustration of diverse life insurance policies for financial security - Global Banking & Finance Review — An informative image showcasing various life insurance policies, emphasizing their importance for financial security and family protection. This visual complements the article on selecting the best life insurance policy.

A life insurance policy is one of the most crucial purchases you can make in your adult life. An inclusive insurance policy offers multiple benefits acts as a support system and leaves you and your family stress-free from unforeseen future events. The ideal policy plan should have you covered from all fronts and keep you and your family safe in the face of a critical medical emergency, and/or unexpected and unfortunate death.

Such an insurance policy is crucial for all our lives no matter where we live or what we do. Hence, several companies now offer life insurance with different premium rates and varying levels of coverage. Consequently, it has now become a source of confusion for the masses to decide which one serves them the best because not all policies fit everyone’s income and lifestyles perfectly. This article will help you avoid making any policy-related mistakes and getting trapped into paying for one that is inconsistent with your interests.

Details You Might Miss while Investing in a Life Insurance Policy

Every life insurance policy should ideally take a number of factors like your age, lifestyle, income, inherent diseases, etc into consideration. For example, Health IQ rewards those who live a healthy and active lifestyle by relaxing the amount they invest in their premiums.

For the uninitiated, most insurance companies score you based on your current health. But Health IQ is the only company that combines your current health, health literacy and active lifestyle to better predict your long-term health, getting you rates up to 41% lower than the industry average. These make for some of the most important and pivotal factors that decide which insurance policy you should invest in.

Following are some mistakes to avoid before/while buying an insurance policy:

Starting Too Late

Young people often mistake life insurance to be an investment that is to be made when they are older. However, one needs to take into consideration that a good insurance policy will serve as an income replacement tool for your loved ones in case of your unfortunate and sudden demise. To put it simply, the earlier you get an insurance plan, the lesser premium you pay for higher coverage. So, what is the ideal time to get an insurance policy? As soon as you start having a stable income.

Prioritising Premiums Over Coverage

It is natural that you’d want to spend as less of a percentage of your income on your insurance policy as possible. Since it covers critical illnesses and death benefits, both high financial losses, you might want to consider a plan that provides you with anapt assured sum as well as affordable premiums. Understand the difference between the benefits of the cheapest plan and the best affordable plan to reap its benefits as best as possible.

Health IQ’s insurance plan for diabetics, disabled people, and senior citizens are tailored to reward their healthy lifestyles with lower rates. Even if you are stuck with a plan that doesn’t reward you for the investment you put into your healthy lifestyle, you can always shift your policy to Health IQ. However, always remember to read and research on all term plans before you make such a shift from one policy to another.

Identify the Ideal Insurance Company

While getting an adequate insurance cover, be mindful of financial liabilities like a dependent sibling, a spouse, ailing parents with low pension rates, etc., and decide accordingly. The ideal insurer will help you guide you through a need-based analysis before you commit to a policy. This ensures that it is you who is benefiting from the insurance and not your insurance company or the agent. To the same end, Health IQ takes health literacy and active lifestyle research into consideration to reward all your hard work with the extra savings you deserve.

Honesty Will Get You the Best Policy

A lot of people tend to hide important information while purchasing a policy in order to save on the premium. As mentioned earlier, a life insurance policy is like a hand of support for your loved ones in your absence. If you hide a health condition at the time of buying the policy and your death is traced back to it, the insurance company has the right to refuse the claim. This is surely not in the best interest of your family. Hence, it is crucial to provide accurate information to get the maximum of your term plan and to avoid being denied your cover from your insurer for future needs.

Signing Out Too Soon

One of the most prevalent mistakes people make is to sign out of paying premiums until the maturity of an insurance plan or the contract term. As we mentioned earlier, the ideal insurance should be a needs-based one. Hence, if your needs are still relevant, then so is your insurance policy. Oftentimes, people tend to cut short and opt out of the contract to pay for short-term investments. Exiting your insurance policy in the initial years will naturally come with higher costs. If the reason for your discontinuity is a financial crunch, check if your insurer provides a loan facility on the policy. This is the best time to take advantage of the same.

It is worth noting that your life insurance policy is based on your financial goals, and needs periodical reassessment. Remember that the benefits of any insurance plan are structured to reach the cost-benefit when the policy runs its full course. Therefore, once bought, aim to continue till the maturity of the plan to optimise the benefits of the plan.

Conclusion

To sum up, a life insurance plan can be an asset when you research well and set out with an intention to stick it out through the term. So, make sure you buy an insurance policy as soon as you find yourself earning a stable income. When looking for an insurance company, it is indispensable that you be transparent with your agent and understand the terms and conditions well. As for the premiums, lesser rates may be lucrative for the short-term but they hardly lead to long-term benefits.

People who are invested in leading a healthy lifestyle deserve greater rewards and bigger savings. If you are an athlete, a cyclist, a yogi or a well-managed diabetic, Health IQ is the undisputed life insurance company to opt for. Health IQ is an insurance company rewarding those with healthy lifestyles like runners, cyclists, weightlifters, yogis, and well-managed diabetics. After all, isn’t the best way to improve the health of the world to celebrate those that have taken responsibility for their health to inspire more people to do so?