Investing in insurance is the best venture in your life. Always consider weighing your risks versus benefits of each policy and insurance company before signing the dotted line. By taking an insurance policy for yourself and your family, you are securing health and wealth of all in the future. Complexities arise when we do not meticulously look through the amount of cover, premium, time period, benefits, riders, terms and conditions. It would be advisable to analyze any insurance policy with a fine toothcomb before finalizing it.
Here are a few pointers to look out for
Getting the right cover without miscalculating: While selecting the amount of cover for an insurance policy, we often make mistakes. Sometimes, we tend to underestimate the amount of cover that we need for our family and ourselves. This is a common mistake with single investor who does not plan for the future. Such investors make a fallacy of not including events such as marriage that increases the number of dependents to income in the future. Single and family investors should also consider the eventuality of retirement.
Look through riders or conditions
Do not assume that all that is mentioned in the policy document should be agreed upon. Don’t be conservative when it comes to adding riders or benefits. There is a standard list of riders that are in any policy, it is always good to add the additional riders even though it means that it will add extra costs to the premium. A critical illness and accident cover is basic, additional riders can include family members too.
Ensure that you select co-payment
It is always ideal to add a co-payment option within your insurance policy. One should consider the co-payment option which means the insurance company will pay a part of your hospitalization bill. This should remain around 10-20% of the co-pay that significantly lowers the premium.
Do not ignore the fine print
Although you may not be a reader, the fine print should be read by you or your investment advisor. Most insurance plans allow one to look through the document for a certain period of time. Take advantage of this when it is offered. Shifting insurance providers: Most of us stick around with one insurance company and policy despite having failed to meet our long-term goals. One should look around for policies that will suit your future needs well.
Allowing the policy to lapse
It is imperative that you do not allow the payments of your premium to lapse beyond the due date. In case you do, ensure that you pay up within the grace period. This is just a precaution to avoid paying penalty charges and avoiding the waiting period.
Mention everything about your medical history
Misrepresenting or concealing a medical piece of information will be costly for you in the future. The insurer may consider it to be a fraud or refuse to consider issuing your policy. This will lead to non-acknowledgement of your claims. Taking the company’s background for granted: Always look at the history of the insurer before you commit yourself with any company. It is imperative that you read up on the company’s history before invest for a long period of time. Look through the customer feedback for the trust gained by the company. These are the factors that need to be vetted out:
Settlement ratio Time taken for settling a claim Solvency Ratio Comparing with other companies: In today’s world, the amount of information available around us should be able to give us enough information for making our decisions. There are sites that are dedicated towards giving us an online comparison of the numerous insurance policies. Use this information to make an informed decision.
Being convinced by a smooth insurance agent
Like any purchase or investment, do not fall under the false claims of the insurance agent. Most agents are salesmen who are out to secure maximum policy holders. Do not consider him/her as your insurance advisor. Cross check the claims made by the agent with the company’s policy and website. Compare it with other companies and then settle for the policy.