Understanding Direct Insurance: Why’s, How’s, and When’s of it
Purchasing insurance is no longer complicated as you do not require to plan a meeting with an insurance agent. You can purchase direct insurance directly from the insurer. And you no longer need to go through a financial agent or advisor.
Direct insurance is never complicated as it contains all the basics. You can understand all the terms on your own. But since you will purchase direct insurance without the help of a financial advisor, we will help. In this article, we will be discussing some of the basics of direct insurance that you need to be familiar with. Let’s begin.
Direct Insurance – What is it?
Direct insurances are nothing but whole life insurance policies and term life insurance policies. And you can purchase them directly from the insurer without obtaining financial advice from an agent.
Features of Direct Insurance
Direct insurance was launched a few years back and is different from regular life insurance policies. Some of the features of direct insurance are:
- You are not required to go through any agents for purchasing this insurance. So you don’t need to pay commissions to the agents. Thus the premiums also have a lower price.
- They are less customizable and can’t adjust to most of the parameters.
- These policies are more superficial and straightforward.
- Whole life insurance coverage is capped at $200000 per insurer per person insured.
- Term insurance coverage is capped at $400000 per insurer per person insured.
Things to Consider Before Purchasing Direct Insurance
Before you head on to purchase direct insurance, make sure you keep certain things in check. They are:
Know Your Budget
Direct insurance premiums can have a cheaper death payout. So with a well-planned budget, you will stand the chance of covering the bare minimum.
Know the Complexities
In direct insurance, whole life insurance can be more complex than term life insurance. So it would be best if you looked into those aspects where you are being protected. You also need to check the wealth accumulation and payout terms.
Know the Riders
The riders vary from policy to policy. So you need to check thoroughly for the riders before you purchase policies for covering specific events.
Direct Insurance – How to Choose?
You need to look out for specific features and aspects before buying direct insurance. By looking at them thoroughly, you can choose our desired policy.
Complete Disability Benefit
Almost all companies offer this benefit. However, sometimes you need to implement this as an add on for the optional rider.
All insurance plans provide the death benefit.
Critical Illness Benefit
If you ever get diagnosed with a critical illness, some policies will pay out. In most cases, you need to buy this as an optional rider.
Term life insurance doesn’t cover your whole life. So you need to check whether you can renew it when the term is over.
You are not required to save your valuable time by meeting an agent for purchasing direct insurance. But that will make things a tad complex as you need to check out things on your own. So before you finalise purchasing the policy, make sure you thoroughly check the brochures.
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