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Business News/ Money / One-minute guide to understanding life insurance policy

One-minute guide to understanding life insurance policy

One-minute guide to understanding life insurance policy


0-15 seconds

What am I?

You can see, touch, feel, smell or hear any product you buy—be it a television, a property or a bottle of perfume. However, you can do none of the above with financial products. I am the legal document that makes these tangible. I record your handshake with the insurer to entitle you to a compensation against a pre-specified fatal mishap. I also record the amount you agree to pay to the insurer and the compensation sum.

15-30 seconds

Why am I important?

I tell you what the insurer agrees to offer and under what circumstances. You need to know me properly before accepting me. I usually run into several pages. You may need to call your accountant and lawyer to fully understand me as I am confusing at times. Leave me unread at your own risk.

30-45 seconds

Little known thing about me

If you find me problematic after my arrival, you can reconsider keeping me. You can return me within 15 days of taking me at no cost.

45-60 seconds

Where should you keep me

Ideally, you should keep me in a locker with a copy at home. If I am damaged or destroyed, you will have to do a lot of running around to get my clone. Ensure your heirs know about my whereabouts.

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Updated: 21 Dec 2009, 09:13 PM IST
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