What are the Three Important Aspects to Consider When Buying a Life Insurance Policy in India?


We think of purchasing a product from the top companies thinking of the reliability, brand name, and quality they offer. But when it comes to services, it is difficult to guarantee that the same companies that excel in products would also perform well in services.

The simple reason for this is that products and services are different in many aspects. For example, if we take insurance, its value would only be realized at the time of a claim. The service provided by an insurance company could be understood only at the time of claim. 

There are nearly 30 life insurance companies in India and not all of them are at the top position. There are quite a few differences between the A listers and the ones that do not make the cut.  

Here’s a list of the top three things that you should consider when buying a life insurance policy – 

3 Things to Look Out for When Buying Life Insurance


One of the most important parameters is whether the insurance company is offering all the required add-ons or not. Some insurance companies may not offer add-ons if you are above 50 years or if your sum assured is less than their limits. So, one should also compare the number of add-ons offered, and the premium charged for those add-ons.

Add-ons are available with all the insurance companies but the wordings might be different. It is important to read the terms and conditions of the add-ons before opting them. For example, there are two add-ons for critical illness cover; one that comes with separate sum Insured and the other that gives a part of the base sum Insured in case of diagnosis with critical illness. The latter would not give any extra sum Insured but would rather give from the existing sum Insured and is known as accelerated critical illness cover. 

After Sales Service:

Insurance is a service that comes in handy at the time of a loss or damage. Hence, after-sales service is of utmost importance in the insurance purchase process. After-sales service starts from the next minute of your policy purchase. It includes endorsement support, sharing policy documents, claim support etc.

If you feel that the after sales service is not up to your expectations, you can cancel the policy and claim refund as per the rules. We might have seen many times, sales person would not respond in a similar way after the purchase is done as the customer has to live with the product.

But in the case of insurance, it would be different as you can cancel the policy at any point in time and get a refund for it. So, the top 10 life insurance companies would provide exemplary service to their customers so that they prevent cancellations. 


The other important thing to consider while making comparisons of different life insurance companies is the type of intermediary you want to go with. Since life insurance plans are long-term, you should have confidence in the intermediary and insurance company that they would survive the policy period. Also the knowledge of intermediaries varies based on the type of intermediary opted.

Intermediaries can be individual agents, banks, insurance broking companies etc. You can even purchase a life insurance policy in online mode of the company or any other insurance aggregator if you believe they would serve you better. On the other hand, intermediaries such as insurance brokers may help you with multiple quotes from multiple insurance companies. It would give you many options to select from and increase your chance of taking a good policy.


  1. What are add-ons in a life insurance policy, and why are they important?

    Add-ons, also known as riders or endorsements, are additional coverages that can be attached to a basic life insurance policy to enhance its scope of coverage. They provide extra benefits beyond the core policy coverage. Add-ons are crucial as they offer protection against specific risks or events that may not be covered by the basic policy alone, such as critical illness, accidental death, or disability.

  2. How can I assess the after-sales service of a life insurance company?

    After-sales service is vital in the insurance purchase process, especially since the value of insurance is realized at the time of a claim. To evaluate the after-sales service of a life insurance company, consider factors such as the responsiveness of customer support, ease of policy document sharing, efficiency in processing endorsements, and the overall claim settlement process. A company that excels in after-sales service ensures prompt assistance and support to policyholders during critical moments.

  3. What should I look for in an intermediary when buying a life insurance policy?

    Choosing the right intermediary is crucial when purchasing a life insurance policy, as they play a significant role in guiding you through the process and providing ongoing support. Consider factors such as the intermediary’s reliability, expertise, and accessibility. Whether opting for individual agents, banks, insurance broking companies, or online platforms, ensure that the intermediary has the necessary knowledge and resources to assist you effectively throughout the policy period.

  4. Why do some insurance companies have restrictions on add-ons for certain age groups or sum assured levels?

    Insurance companies may impose restrictions on add-ons based on factors such as age and sum assured to manage their risk exposure and maintain profitability. Certain add-ons may be more applicable or beneficial for specific age groups or coverage amounts, while others may pose higher risks for the insurer. By setting limitations, insurance companies aim to align add-on offerings with their underwriting guidelines and ensure sustainability in providing comprehensive coverage to policyholders.

  5. How do I ensure that I choose the right add-ons for my life insurance policy?

    Selecting the appropriate add-ons for your life insurance policy requires careful consideration of your individual needs, preferences, and financial circumstances. Begin by assessing potential risks and vulnerabilities that may not be adequately covered by the base policy. Compare the add-on options offered by different insurance companies, paying attention to coverage limits, premiums, and terms and conditions. Additionally, seek guidance from trusted intermediaries or insurance professionals to tailor add-on selections to your specific requirements and goals.

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Susheel Agarwal