Life insurance is generally a long-term commitment. Hence, before buying any life insurance product, be sure to read the policy carefully and get answers to any questions you may have. Ask yourself:

1. How much insurance do I need? During my absence, what would my spouse and dependents need in order to live comfortably? Do I have adequate asset to cover their needs now and in future?

2. In addition to the protection, what am I trying to gain through my life insurance. Am I accumulating funds for the education costs for the children or do I need some additional supplemental income for my retirement or emergencies?

3. How much can I afford to pay for the policy?

4. Is the insurance company I am considering financially secure? Does it have a good claims payment history? Good customer service and competitive pricing?

5. What is the philosophy of fund management and approach to sales of the company?

Finding a good value in life insurance
After you have decided on life insurance, find which policy is likely to give the best value for your money. A simple comparison of the premiums for various policies is not enough. There are other things to consider. For example:

• Do premiums or benefits vary from year to year?
• How much do the benefits build up in the policy?
• What part of the premiums or benefits is not guaranteed?
• What is the effect of interest on money paid and received at different times on policy?

Remember that no single company offers the lowest cost at all ages for all kinds and amounts of insurance. You should also consider other factors:

How quickly does the cash value grow? Some policies have low cash values in the early years that build quickly later on. Other policies have a more level cash value build-up. A year-by-year display of values and benefits can be very helpful. (The insurance company will give you a policy summary or an illustration that will show benefits and premiums for selected years.)

How to conserve costs?

1. Don't buy insurance if you don't need it. For example if you have no dependents then do not buy a policy. At the same time there is no need to buy more insurance than required.

2. Shop for a competitive policy while you are in good health.

3. Look for a guaranteed renewal policy if you are looking for a term insurance. That way you won't have to shop for a new policy with higher premium as your age increases each year, nor will you have to pay extra if your health deteriorates.

4. Buy additional riders only if you really need them. These are additional forms of coverage.

5. Participate in your employer's sponsored group life insurance programme even if you have to pay for it.

6. Shop around and compare prices, company quality, service and quality of advice.

Even if you already have a life insurance policy, keep in mind that life changes and so does your need for protection. Review your life insurance need every few years. Any of these changes listed below should prompt you to sit down with your financial advisor and make sure your policies are still appropriate.

• You are recently married
• A child has been added recently to your family
• You have recently purchased a new home
• You are planning for your child's education/ higher studies
• You and your spouse are concerned about your retirement income.
• You and your spouse have been promoted recently
• You and your spouse have received an inheritance

Replacing a policy?
You can trade or replace your policy, but it's not something to be considered lightly, regardless of whether you are thinking of switching policies within the same company or changing companies. This is becaus the new policy will incur new start up costs and giving up the earlier policy may involve surrender charges. If you want to increase your total life insurance, it is probably better to keep your old policy and simply add a new one.

Moreover, your existing policy premiums will generally be lower than those for the new policy because you would have bought the earlier one when you were younger, and you also won't lose any existing cash value. Be sure to ask you're your financial advisor or insurance company about the best alternative for your specific situation.

Life insurance illustrations
You may be thinking of buying a policy where cash values, death benefits, dividends or premiums may vary, based on events or situations the company does not guarantee (such as interest rates). If so, you may get an illustration from the agent or company that helps explain how the policy works.

The illustration will show how the benefits that are not guaranteed will change as interest rates and other factors change. The illustration will show you what the company guarantees. It will also show you what could happen in the future. Remember, nobody knows exactly what will happen in the future. You should be ready to adjust your financial plans if the cash value doesn't increase as quickly as shown in the illustration.

Important things to consider
1.Review your own insurance needs and circumstances. Choose the kind of policy that offers benefits that most closely fit your needs. Ask your financial advisor or company to help you.

2.Be sure that you can handle premium payments. Can you afford the initial premium? If the premium increases later and you still need insurance, can you still afford it?

3.Don't sign an insurance application until you review it carefully, to be sure all the answers are complete and accurate.

4.Don't buy life insurance unless you intend to stick with your plan. It may be very costly if you quit during the early years of the policy.

5.Don't drop one policy and buy another without a thorough study of the new policy and the one you have now. Replacing your insurance may actually prove costly.

6.Read your policy carefully. Ask your advisor or company about anything that does not appear clear to you.

7.Review your life insurance program with your agent or company every few years to keep up with changes in your needs.

*The author is marketing director, MetLife India Insurance.